I know, I know, I said I wasn't going to engage these folks again: But it's hard not to. Joseph Bast, head of the Heartland Institute, is now a martyr because people send him unpleasant email. In his latest foray into shaping public opinion, Mr. Bast was given an op-ed column to write about the failure of municipal networks in the Fort-Worth Star-Telegram. As usual, Mr. Bast uses outdated information (despite his statement that some numbers are new), poor analysis, selectivity (many cities he used to cite are missing because their "failures" were disproven, notably Tacoma, Wash.), and the bogeyman of taxpayer risk.

I never see a statement about taxpayer risk when millions of dollar are provided to companies that move to town, have roads built for them, hire local workers, and then leave when tax giveaways expire, and it's no longer expedient for them to remain, nor contractually required. All money given to corporations through subsidy and tax incentives is positive in the view of ideologues (sponsored by those companies or not); all money spent by cities on economic development and basic services is wasted.

Here's the letter I wrote to the editor of the Star-Telegram. Note that I am not stating that Ron Rizzuto is providing inaccurate information nor is a paid lobbyist. Rather, as with all organizations and individuals engaging in public debate, it is as important to listen to what they say as who they work for. Prof. Rizzuto doesn't hide his affiliation with the cable industry, but those that cite him would prefer to mention the University of Denver or the Daniels School (named for a cable industry pioneer), not his work with The Cable Labs, a well-respected cable-industry funded institution for research, among other tasks.

(Study up on this issue from both sides: read reports at The Heartland Institute, Pacific Research Institute, and The New Millennium Research Council; as well as Muniwireless.com and Free Press [Telco Lies, principally], as well as this older page of refutation of muni failures at Fiber For Our Future.)

Dear Editor,

Joseph Bast's opinion column stating municipal broadband networks suffers from several factual flaws and omissions, none of which relate to his technical but all to his political abilities (Star-Telegram, Sun., Feb. 2006).

At least one of the reports Mr. Bast refers to that his organization produced was released with The New Millennium Research Council, a wholly owned subsidiary of Issue Dynamics, a Washington, DC, press relations firm. Neither NMRC nor Issue Dynamics hides this fact. Issue Dynamics represents a variety of organizations, including Verizon, AT&T (formerly SBC), and other telephone and cable companies that provide existing broadband services.

The NMRC board members and other organizations that contributed to that report had direct ties with either Issue Dynamics or Verizon when the report was issued. Mr. Bast's Heartland Institute does not disclose its corporate funders.

The networks that Mr. Bast refers to in his column are all fiber optic networks, which require great effort and expense to build and operate because of digging up streets and installing conduits. The enormous and expensive overbuilding of fiber optic networks was one of the leading causes of bankruptcy and instability--along certain alleged accounting actions--of major telecommunications operators at the time of the dotcom crash.

The municipal broadband networks built, in progress, or bid out in nearly 200 U.S. cities at this writing are largely or entirely comprised of wireless networks using standard Wi-Fi for user/citizen access. These networks are often being built in cities and towns that have little or no broadband service and no commitment from incumbents to build such; or, true broadband speeds are available in limited, higher-income parts of town.

The expert Mr. Bast cites, Prof. Ronald Rizzuto, even states in the co-sponsored Heartland/NMRC report, "the breakeven point for Wi-Fi systems is significantly lower than that of wireline networks because of the substantially lower capital and operating costs." Mr. Rizzuto is dubious about other associated factors, but that is the first of his conclusions. (Mr. Rizzuto is a professor at the University of Denver's business school, but also a senior fellow at cable industry funded The Cable Center. He lists former telephone company US West and cable operator TCI among previous consulting clients on his university profile.)

After citing a small number of cities' fiber optic business model flaws, Mr. Bast concludes, "These case studies are important because advocates of municipal broadband systems say they won't cost taxpayers anything."

Unfortunately, Mr. Bast uses the same logic of obfuscation here: not only are the case studies he cites involving systems other than those under consideration by most cities, including Philadelphia's large effort, virtually all current municipal broadband plans require the winner bidder to bear all risk and pay all costs of capitalization and operation.

It is, in fact, much more like a cable franchise agreement in which rights to city facilities are traded for a commitment to provide a service; some cities will even charge municipal-scale providers franchise fees for operation. Others will subject them to local telecommunications taxes.

Mr. Bast and others affiliated with him have fought a multi-year effort ostensibly on behalf of taxpayers and incidentally on behalf of incumbent broadband providers typically by using outdated financial information and citing city networks as failures by employing accounting techniques that are not in accordance with generally accepted public and private measures of return on investment. The Heartland Institute and its associates consistently look only at a limited number of municipal operations, ever changing as their facts are refuted, and never find an iota of success--there is, apparently, no exception that proves their rule.

There are many difficulties political, financial, and technical with building city-wide wireless networks, but few of the real problems have been discussed with academic rigor in open forums by either pro or anti forces. Mr. Bast lacks the interest in writing reports in which both alleged successes, such a Tacoma, Washington, and alleged failures, such as Cedar Falls, Iowa, are presented with independently assessed and audited financial results and returns.