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« Beat the TechBeat on Muni Wireless | Main | CUWiN Goes Public with Open-Source Mesh System »

February 1, 2005

Sock Puppets of Industry

A continuation from the previous post about a Feb. 3 announcement of a report on why municipal networks are a terrible, anti-competitive idea: In the previous post, below, I dissected BusinessWeek's blog entry on a new report that will be released on Feb. 3 from the New Millennium Research Council. In this post, I include the announcement's text after the jump below, and provide some background on each of the people who will be part of the press event.

I've done this annotation not because I wholeheartedly oppose their point of view, but rather because a light needs to be shone on the connections between organizations that call themselves independent but have ties among each other and to the industries about which they are stating they have an objective opinion about. This is about transparency, and a pro-municipal telecom group that was similarly opaque would receive the same treatment. (Oddly, there only appear to be pro-individuals and municipalities, not groups that I've heard from or about.)

David P. McClure, president and CEO of the US Internet Industry Association. This association filed an amicus brief on behalf of Verizon in an RIAA suit in which Verizon was trying to be compelled to release user information. Verizon also holds a board seat in the organization. It appears generally pro-consumer in terms of privacy and disclosure--because it's against shifting the burden of enforcement to ISPs--and anti-regulation for taxing and oversight.

The USIIA does not list its membership. Its founding members don't include many Internet service providers. US Robotics employees were key among founding members, and the group's chairman is Dennis Hayes, the legendary modem developer. The USIIA is listed as a client of Issue Dynamics, which is the parent company of New Millennium Research Council. (See below.)

Steven Titch, senior fellow for IT and Telecom Policy at The Heartland Institute. The Heartland Institute describes itself as a genuinely independent source of research and commentary. Sascha Meinrath noted that the institute refuses to disclose its funding sources and doesn't list affiliations of Board of Directors on their website. However, it is a 501(c)(3) corporation. On its Form 990 filed with the IRS for 2003 (filed under an extension before August 2004), the organization checked "No" on Schedule III, Part A, line I that reads, "During the year, has the organization attempted to influence national, state, or local legislation, including any attempt to influence public opinion on a legislative matter or referendum." If they had checked yes, they are required to fill out Part VI-A and VI-B detailing expenses in cash and by other means. In 2003, they received $1.5 million in contributions from unnamed sources out of $1.8 million in revenue.

The Heartland Institute states on their Web site why they don't reveal donors: After much deliberation and with some regret, we now keep confidential the identities of all our donors. If you do not approve of this policy, your argument is not with us but with those who would abuse a sincere effort at transparency. The Center for Media & Democracy has an entry about them as well noting their smoker's rights and anti-Kyoto stances. The board includes a Philip Morris exec. [Media Transparency's list of foundation contributors.] The last donor list on their site was Oct. 17, 2002, according to the Internet Archive; it's archived here.

Braden Cox, technology counsel, Competitive Enterprise Institute. The institute focuses primarily on anti-regulation issues with particular emphasis on removing environmental regulations. Cox has written articles that appear on the Heartland Institute Web site. (A firm he worked for previous, Veriprise Wireless was acquired by Mbrane which filed for bankruptcy a few months later in Aug. 2001; it's hard to find out much about that business or its partners.)

For the CEI tax year ending 9/2003, they did claim on their Form 990 to be lobbying for legislative change in the amount of less than $13,000. Their site has no information on their funding. [Media Transparency's list of foundation contributors -- quite similar in recent years to the Heartland Institute]

Barry Aarons, Research Fellow, Institute for Policy Innovation. The Center for Media and Democracy says that IPI hides its sponsors. He spent 20 years at US West. Aarons was also connected with the Progress and Freedom Foundation, which openly lists its supporters, which include a wide range of computer, media, and telecom firms. A breath of fresh air, at last, but not connected with this effort. [Media Transparency's list of foundation contributors; again, many similar names]

Paul Bachman, Research Assistant, The Beacon Hill Institute. The Institute is part of Suffolk University. Focuses on competitiveness, which is a code word for deregulation.

The New Millennium Research Council is listed as the organization releasing the report. Their board comprises people who seem genuinely focused on universal access issues. Update: There's much more about NRMC, a division of a lobbying firm called Issue Dynamics, in this new post.

Review their list of scholars and experts who have spoken at their events or released reports under their auspices and you find a very interesting mixed bag of interests, all quite openly presented. Two Verizon employees participated in NMRC events--one a director, another a senior vice president. Both Braden Cox and David P. McClure have contributed to NMRC reports.

Anthony Townsend, formerly of NYC Wireless and emenity (once called Cloud Networks), is quoted in the advance press about the report. He is listed on the NMRC's expert and scholars page. The advance material on the report quoted Townsend as saying that Philadelphia's $10 million estimate is far too low, although he's quoted from an article in Reason, apparently not from a direct interview by the report's author. (The article, like other coverage of broadband Wi-Fi networks, assumes that the equipment being deployed will work like home wireless access points in terms of signal strength, range, and omnidirectional coverage.)


Leading Authors of Report to Discuss Key Findings About Likely Woes; Philadelphia & New York Steps Highlight Significance and Urgency.

WASHINGTON, D.C.//News Advisory//As cities such as Chicago, Philadelphia, Las Vegas, New York, and San Francisco toy with the notion of using public funds to provide Wi-Fi wireless broadband access to their citizens and businesses, the New Millennium Research Council (NMRC) will release a major new report raising serious concerns about the short- and long-term viability of such municipal wi-fi schemes. Key authors of the NMRC report will participate in a phone-based news conference at 1:30 p.m. on February 3, 2005 to discuss their major conclusions.

News event speakers will be:

* U.S. Internet Industry Association President and CEO David P. McClure;

* The Heartland Institute Senior Fellow for IT and Telecom Policy Steven Titch;

* Competitive Enterprise Institute Technology Counsel Braden Cox;

* Institute for Policy Innovation Research Fellow Barry Aarons; and

* The Beacon Hill Institute Research Assistant Paul Bachman.

The experts will highlight such concerns as: the failure of city-run Internet/telecommunication access initiatives in the recent past; unrealistic assumptions about likely front-end costs and the risk of future overruns that could significantly burden taxpayers; the lack of evidence that these networks will create economic development and jobs; and unfair competition and potential disruption to commercial broadband firms that will be undercut by city-subsidized services.

TO PARTICIPATE: A live, two-way phone-based news conference (including full
Q&A) will be held on February 3, 2004 at [number removed]. Ask for the "municipal wi-fi report" telenews event.

CAN'T PARTICIPATE?: A streaming audio replay of the phone-based news conference and related documents will be available on the Web at

CONTACT: [details removed]

The New Millennium Research Council (NMRC) is composed of a network of policy experts who develop workable, real-world solutions to the issues and challenges confronting policymakers. Its work has focused primarily in the fields of telecommunications and technology. For more information, please visit:


This inaccurate and insulting essay is a precise demonstration of why The Heartland Institute and other think tanks do not reveal the identity of their donors.

Here is the full statement on our Web site explaining our policy, and no, there is no "Philip Morris exec." on our Board of Directors.

The Heartland Institute received funding from more than 1,500 individuals, foundations, and corporations in 2003. Heartland does not solicit or accept grants from government agencies, does not conduct contract research, and does not rely on direct mail to raise money. No one donor contributes more than 10 percent of its annual budget. Contributions to The Heartland Institute are tax deductible under Section 501(c)3 of the Internal Revenue Code.

People contribute to The Heartland Institute because they support the positions our authors take and our effectiveness in communicating with elected officials and other key audiences. For two decades, Heartland authors have consistently called for ways to empower people by limiting the size and cost of government. We do not take positions in order to appease or avoid losing support from individual donors. We have, in fact, a long record of standing behind our research even when it means losing the support of major donors.

For many years, we provided a complete list of Heartland’s corporate and foundation donors on this Web site and challenged other think tanks and advocacy groups to do the same. To our knowledge, not a single group followed our lead. However, critics who couldn’t or wouldn’t engage in fair debate over our ideas found the donor list a convenient place to find the names of unpopular companies or foundations, which they used in ad hominem attacks against us. Even reporters from time to time seemed to think reporting the identities of one or two donors--out of a list of hundreds--was a fair way of representing our funding or our motivation in taking the positions expressed in our publications.

After much deliberation and with some regret, we now keep confidential the identities of all our donors. If you do not approve of this policy, your argument is not with us but with those who would abuse a sincere effort at transparency. We urge anyone who sees the need for objective research and commentary on public policy issues to join us as a Member or donor.

Mr. Bast, thanks for engaging in this forum.

Roy Marden is listed in the biography section of your site as a director of Heartland and the manager of industry affairs at Phillip Morris Companies Inc. In your latest Form 990 filing with the IRS, Mr. Marden is listed as a member of the board of directors. Is Mr. Marden a low-ranking employee and not an executive?

Many 501(c)(3) institutions on the right, center, and left -- or entirely non-partisan -- choose to list their most significant donors in order to be clear about their independent status. Given the connection between Heartland and a number of other institutions that are connected with the companies that you are maintaining independence from, transparency would seem to be a boom, rather than a tool of harassment by those that oppose you.

I did the work on this posting to make it clear how several institutions are actually working together to present what looks like a multi-faceted and independent view of municipal wireless that is not. There is no shame is not being objective. There is no shame in our society in pursuing profit. But transparency begets dialog.

I found their presentation to be so overtly one-sided, and their failure to support many of their generalizations so patent, that their teleconference wasn't helpful. I feel that they misinformed me when I asked the panel if any had a "pecuniary" interest in any of the telcom companies that oppose municipal broadband. The fundamental contradiction in their argument is that they see no problem with government granting tax credits to companies to install broadband in underserved areas, but they see all kinds of problems with government dealing directly with users to provide broadband in underserved areas. In other words, they have no problem with "corporate welfare" or subsidies that go to corporations, and all kinds of problems with government largesse given directly to individuals and small companies. HG

Dear Heartland apologist Joseph Bast -- you claim that Heartland has a "long record of publishing reports" against their pecuniary interests... please acquaint us with this history, and our demands to know your current sponsors will lessen. That is the kind of claim that is easy to support.

It is amusing that you call attacks about donors having a stake in the reports you publish as "ad hominem" -- no, it is not that fallacy. Questions of financial interest are demonstrably/provably/historically and in all other ways related to determining the independence of your report. If you are ashamed of your donors, or just really do believe in keeping the confidential, then you have to abandon claims of independence, etc... just let the report speak for itself. Simple and easy. Claiming independence while keeping secrecy is of course a contradition.

Cheers and better luck next time!

This inaccurate and insulting essay is a precise demonstration of why The Heartland Institute and other think tanks do not reveal the identity of their donors.

Let's start from the top. Please point out specific inaccuracies. Too often I hear people claim something is inaccurate or wrong but do nothing to put out the correct information.

> For two decades, Heartland authors have consistently
> called for ways to empower people by limiting the size
> and cost of government.

Nice spin. Very nice. It sounds like like that Heartland isn't about saving the taxpayers money. Wow. That's great. Who could oppose that?

The only problem is when you think about something as simple as wi-fi in a community. Why would an organization interested in 'limiting the size and cost of government' focus on something as simple and petty as Wi-Fi in a community? I mean, it isn't even worth a report to oppose something that tiny.

ANSWER: 'Limiting the size and cost of government' is a codeword. It is a codeword for 'reducing government competition to our big corporate sponsors'.

Now it makes sense. You've got a 'independent' Institute (as if) pushing that a public wi-fi project is bad. They're not selling the real reasons they think it is bad, that it competes with large businesses, but rather, trying to come up with other reasons that are more palatable to the public for it being a bad idea.

They need to drop their silly stance of being independent. These days, anyone knows that any group calling themselves independent and producing reports and and asking for public policy changes are pretty much nothing but puppets for other groups. Show us some respect.

"For many years, we provided a complete list of Heartland’s corporate and foundation donors on this Web site and challenged other think tanks and advocacy groups to do the same."*/

I think all of these think tanks and "Associations" should be guilt until proven innocent. We are now inundated in this country by paid PR that dresses itself as news, by astroturf organizations that pretend outrage, and by purchased politicians who then go on to become 6 and 7 figure "consultants" for industries they are were formerly entrusted to regulate.

What is the end result of what you people are doing? What will happen when there are no more public services and everything is pay as you go, and every last drop of taxpayer money goes to some form of corporate welfare? Obviously, some of the people can be fooled all of the time, but the rest of us are about fed up.

Now there might be an argument towards local governments not being part of providing free wifi. But I think it would make more sense to concentrate on providing premium services--for those who want more than the minimum. I think there is a real public interest in providing internet services to communities without access (especially in areas that have a single source for news). The communications over power lines is a bad idea and perhaps a cynic might think its a way to say that the poor have access when in real terms it will be useless and its another way to kill off ham radio operators. More control of uncontrolled people. And nobody spoke out about using public taxes to subsidize that exercise in the absurd.

You just look like all the other phony PR groups and paid pundits that want their turn at the public trough. I hope you earn big bucks and can fool yourselves into thinking your good Americans. Oh, wait, you probably already do.

See (a project of the Center for Media and Democracy that was formerly known as for more information on New Millennium Research Council, Heartland Institute, and other campaigners of junk science.

Nice job.... but this is only the tip of the iceberg for the Issue Dynamics, New Millenium and others: Meet Sam Simon and the hundreds of connected groups that are behind the curtain to harm the public interest.

This has been going on for a decade, and has impacted everything from the bell companies' entrance into long distance, local competition and broadband deployments -- or lack of fiber deployments.

Methinks thou dost protest too much, Joseph Bast. Why should anyone believe your description of your finances if you refuse to disclose the evidence? And why should anyone trust what your organization has to say if we don't know who is paying you to say it? That's a basic requirement for establishing credibility.

This is an interesting defense: "critics... found the donor list a convenient place to find the names of unpopular companies or foundations, which they used in ad hominem attacks against us..."

So in other words, companies and foundations with little public credibility can anonymously further their agenda through your organization. In legal circles, that's what's known as "laundering."

Yo, Bastbaby. While a Phillip Morris exec may not sit on your board of directors (and I haven't seen you answer Glenn's questions about Mr. Marden) do you have a comment about Marden working with Armstrong Williams and prepping them for softball / tobacco friendly interviews? Oh yeah, there is an email here to provide further insight :) I mean, how EMBARASSING is it to be associated with someone like Williams, I would need to take a bath after being in the same room as him.

Walks like duck, talks like a duck - yeah, there's a good bet that your looking at a jerk-off.

To Joseph Bast: where I come from, logic says that keeping your donor list confidential is NOT transparent. Until you begin to speak and NOT spin, you'll continue to be derided by those whom you may wish to have support you.