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April 11, 2005

New Municipal Reports Debunk Network Failures

Remember how the anti-municipal sock puppets and ideologues keep citing the same failures? They're not failures. In fact, they're generally successes. You hear Tacoma, Wash.; Ashland, Ore.; Braintree, Mass.; Marietta, Georgia; and others bandied about as failures that have drained taxpayer inputs and failed to live up to their financial projects. As I discovered when starting down the research path on this two months ago, those networks are successes: the numbers that "prove" their failure are typically cherrypicked from early construction stages or even take numbers that were planning figures and weren't used during the approval stages by voters, city councils, or boards of directors.

The people at Free Press have released a comprehensive report, "Telco Lies and the Truth about Municipal Broadband Networks," (PDF) that includes the first-hand research that the authors of the reports that declare these networks failures never did. The Beacon Hill Institute report last spring, for instance, cites a number of cases using newspaper article, defunct Web sites, and early projects and apparently never actually spoke to the network operators about details. (I take the report apart in a post a few weeks ago.)

All academics will tell you that primary sources are how you do it. If you talk to a primary source and they have publicly available documentation to back up what they say, then you can confirm or reject the contentions of that primary source. You can bring in other primary sources who have opposing views and facts. But if you rely on second or third hand reports, you will invariably produce conclusions that are poorly founded.

The Free Press counters the misinformation that's been provided in two ways: first, by showing the fruit of the poisoned tree, a several-year-old report that gets cited today as if the information is contemporary (and it was bad back then, too); and, second, by using primary sources to show how each of these networks is producing the kinds of financial results that should encourage this sort of local development.

A second report, "Connecting People: The Truth about Municipal Broadband," (PDF) handles the arguments about whether municipal networks improperly take the role of private enterprise in a new and unique way and suck the revenue and development that comes from private infrastructure into a municipal maw. This report also tries to address misinformation about the way in which these networks operator, historical antecedents about municipal utilities, and whether municipalities are incompetent to run operations.

I took the anti-municipal folks to task for their lack of disclosure about membership, funding sources, and indirect lobbying efforts. I was able to pin Verizon at the back of most of those efforts through direct funding of institutes that wrote reports or indirect operation of groups that then themselves backed reports and public opinion articles.

I just took the same approach to looking at the funding, staff, and board members of Free Press. The funding is miniscule compared to the think-tanks involved in the anti-municipal effort: a few hundred thousand dollars a year drives Free Press's work. I was unable to find any smoking guns on the board members or staff: they're mostly academics and journalists with an interest in fighting government and corporate propaganda that distorts the public understanding. But they don't seem to have an ideological bent.

A big chunk of their funding comes from the Media Education Foundation, about half of their annual revenue. That group's mission is distribution of educational videotapes to educational, social, and religious organizations. They're both located in Northampton, Mass. It's pretty easy to find an ideological bias when you look at their board of advisers, which includes Noam Chomsky and the founder and board chairman of the Free Press. Update: Free Press explained that they are a spinoff non-profit from MEF so operated under their auspices during that period. The 2003 non-profit IRS disclosure form shows funding that was part of that separation process as grants flowed through MEF to Free Press until it was a separate organization.

The reports are also co-sponsored by the Consumer Federation of America, Consumers Union (which publishes Consumer Reports), and the Media Access Project. MAP is about diversity in media and ownership, and works on issues like low-power radio and opening up cable infrastructure to multiple competitive providers. The two consumer groups fight for consumer rights.

I don't find any funding of the Free Press from vested interests: municipalities, private vendors of networking equipment, competitive carriers with incumbents involved in this debate, nor individuals involved in government or contracting related to it. The Media Access Project is opposed to many of the business and legal tactics employed by incumbents to reduce competitor's ability to thrive in the marketplace.


I'd like to know how you'd characterize the Ashland Fiber Network as a success ... I'm an editor at the Mail Tribune newspaper in Medford, 12 miles to the north, and it is universally recognized as a boondoggle, even by its supporters. They're talking about raising rates now.
If you know something everyone around here doesn't know, by all means please let us in on it.

A word about MAP's funding. MAP is a not for profit public interest law firm. We have been active in open spectrum and community wireless for about two years now, in addition to our media work. We get most of our funding from a handful of foundations (Open Society Institute, Joyce, and MacArthur are our biggest funders in 2005). We get a very modest amount as "legal fees" (heavily discounted) from our public interest clients that can afford to make some kind of contribution. In the last year, particularly after we won the media ownership case in the Third Cir. and got a nice shout-out on, we have recieved a trickle of private contributions. (We can always use more, and you can donate through Paypal from our web page. Plug, plug)

Harold Feld
Senior VP, MAP

Scott Smith has a good point. Marietta Georgia spent close to 40 million building a fiber network, that sold to AFS for 12 million less than two years later. Where is the sucess in losing 30 million dollars? I don't know where this non-cherry picked info came from, but I'm finding this on their own websites.

[Editor's note: Please read the Free Press report. Marietta sold its network because the mayor campaigned on selling it. The company that bought it retained its staff. The $12M and $40M figures aren't accurate. But read the report for more details and then you can make up your own mind. --gf]