Keep the Sock Puppets Out of Your Stimulus

I wrote here two weeks ago about why a multi-billion dollar investment in broadband must be part of the massive economic stimulus package now being crafted in Congress.

I touted the detailed plan put forward by colleague S. Derek Turner, which proposes $44 billion in broadband stimulus spending, and I listed some of the key elements -- such as future-proof speeds, universal service, and no blank checks -- that must be part of any legislation.

But I forgot to include an important warning: Beware of sock puppets.

Sock puppets, for those unfamiliar with the creatures commonly found inside the Beltway, are mouthpieces who rent out their academic or political credentials to argue pro-industry positions. These pay-to-sway professionals issue white papers, file comments with key agencies, and present themselves to the press as independent analysts. But their views have a funny way of shifting depending on who's writing the checks. (To be clear, at Free Press we take no industry money.)

A profile in puppetry?

Sock puppets sometimes show up in unexpected places -- even right here on the Huffington Post. You may recall Mike McCurry -- the former Clinton press secretary turned marionette -- trying to convince the blogosphere that Net Neutrality was a bad idea. (Here's a post from McCurry and a wrap-up from National Journal.)

And now comes one "Robert Atkinson, Ph.D.," of the Information Technology and Innovation Foundation (ITIF). In a recent HuffPost piece, he attacks Free Press for trying to advance our nefarious "agenda of getting open networks and even more broadband competition."

Well, he's got us there -- guilty as charged -- and while we're at it, let me confess that we want faster speeds and lower prices, too.

If Atkinson, Ph.D., doesn't like openness and competition, what does he want? Apparently he prefers spending your tax dollars on a massive giveaway to the biggest phone and cable companies -- with zero accountability.

Today, his group published its own $30 billion plan, which he touts as more "pragmatic" and "shovel-ready" than the alternatives. On the surface, his proposal seems somewhat similar to the Free Press plan, using tax credits and incentives to bolster broadband supply, especially in rural and other underserved areas.

But a closer examination shows Atkinson, Ph.D., suspiciously avoiding any proposals that might actually bring some needed competition into the broadband market. He has criticized our proposed $10 billion "Bonds for Broadband" program, claiming there are few companies that would take advantage of it and it would take too long to spur investment. But an independent study released yesterday by the Fiber to the Home Council estimated that such a program would result in substantial investments in 2009, creating nearly 200,000 new jobs this year alone.

The Free Press proposal would require that tax credits and other incentives only be awarded for new investments beyond what was already planned by the phone and cable giants. Companies would have to pre-apply with the Treasury Department to claim the credits on their tax returns. The point is to ensure that -- without slowing down those shovels -- that taxpayers are only funding networks that wouldn't have been built otherwise.

ITIF claims that their tax credits are structured to "actually spur additional investment." But their plan has no accountability. ITIF states "credits should apply only to capital expenditures that exceed 85 percent of 2008 capital expenditures for companies." The thinking here is that because of the recession, investment will be below 2008 levels. Fine -- but in practice this gives the public zero guarantee the money is being used for new investment, much less investment in the world-class, super-fast broadband we need.

In fact, the ITIF plan -- which doesn't distinguish between dollars spent on high-speed Internet deployment and other capital expenditures -- would permit companies like AT&T, Verizon and Comcast to spend less on broadband and use the tax credits to fund other projects, like anti-consumer snooping technologies that allow ISPs to interfere with your Web browsing.

When you drill down, you see that while the Free Press proposal is designed to prevent giveaways to incumbents and spur competition, ITIF's would allow incumbents to reduce planned investment in fast broadband and replace it with tax-payer funded investments in just about anything these carriers want.

Or as one commenter on Atkinson's post neatly summarized: "In other words ... why don't we just give the money to ATT and Comcast and expect nothing but a kick in the ... insert your most tender parts here ... in return?"

It's hard to tell from ITIF's Web site or the group's financial disclosures exactly who's funding this operation. Whether Atkinson, Ph.D., is already on the industry payroll -- or just auditioning for the gig -- the beneficiaries of his efforts will undoubtedly be the biggest phone and cable companies.

They're all too happy to avoid the public spotlight and hide behind independent-sounding analysis, even as their army of lobbyists descends on Capitol Hill to cash in on the fast-moving stimulus bill.

I suppose it's possible I've misjudged Atkinson, Ph.D.'s motivations, and that he honestly believes giving billions to these companies -- with no strings attached -- is the best way to go.

But if the sock fits ...

Comments

[Henryk A. Kowalczyk - Huffpost Blogger]

These 14 percent of American adult population does not need any internet access at all
http://news.yahoo.com/s/livescience/20090110/sc_livescience/14percentofusadultscantread

By the rule of tomb, for every illiterate person, there would be about two barely literate, what amounts to about 28%. 14 plus 28 is 42, what brings us closer to my anecdotal data that about 50% of people were not interested in high speed internet, even if offered at no charge. Even, if the 65% is more accurate, we can safely conclude that the remaining 35% is not literate enough to use the internet, or benefit from doing so.

So, Mr. Aaron please tell us again "why a multi-billion dollar investment in broadband must be part of the massive economic stimulus package now being crafted in Congress."

[candre23]

Didn't we already give the telecoms something like $13B in tax breaks back in the 90s to roll out ubiquitous broadband? Didn't they take the money and do precisely dick about the situation?

Obviously this whole "zero accountability" thing doesn't work. There absolutely has to be safeguards that ensure that if a company receives money, the American people get something in return. I know that sounds crazy, but I think it's the way to go.

[matt819]

Regarding Mr. Kowalczyk's comment: It may be that 50% of some surveyed group indicated that they would not use higher speed broadband if it were available. OK. Some other survey can be trotted out to show just the opposite. Not the point. It's like saying that because you don't use a particular highway, the government should not build/impr­ove/expand it for the common good.

[Henryk A. Kowalczyk - Huffpost Blogger]

Nice try, but you are wrong.

That 50% of population that does not feel a need for high-speed internet, they have their legitimate reasons. Some do not have computers, or still have their Windows 95. Some are satisfied with media interactions limited to watching football and the Jerry Springer show. Some work long hours making very little; they simply have no time.

We have become a backward society. This is the real problem.

BTW, my data does not come from surveys, but from my own field experience.

[artsandminds]

It will be quite telling to see how Obama goes forward on this, I am still waiting to see the progressive I voted for, hopefully this will be the first sighting.

[matt819]

In his post, Aaron observes that his organization does not receive industry funding.

In his post, Atkinson observes that he does not respond to personal attacks or insults. Granted, Aaron's comments cut close to the bone, but the fact remains that he is attacking Atkinson's proposals for what he believes to be a lack of transparency. If Atkinson were to acknowledge whether ITIF is industry funded, that would go a long way to having a more constructive debate.

All of that said, it is truly astounding how much of this country is without reliable - in terms of availability, downtime, and speed - broadband service, including many rural and, indeed, suburban areas and their home-based businesses. In New England, a telecom that recently purchased Verizon's local services is committed to providing DSL service to 85% of the region by next year, and 95% in five years (or something along those lines) Remember, folks, this is a technology that is more than a decade old. Providing an obsolete service to more people is not a terribly impressive goal or one to be proud of.

With an internet that is providing exponentially more video content and complex websites than even a year ago, it is remarkable that internet providers are returning to 20th century solutions of providing caps on usage. And satellite providers have had these caps as long as they have been available. Try doing business at dial-up speed.

[Henryk A. Kowalczyk - Huffpost Blogger]

Dear Mr. Aaron,

In response to your previous post, http://www.huffingtonpost.com/craig-aaron/broadband-very-stimulatin_b_153288.html, from my own experience in selling broadband internet service, I reported that even if service was available at no charge (included in rent or in assessment fee) only about 50% who could get it, signed for it.

I asked you why. You did not reply.

Therefore, one more time, Mr. Aaron, "why about 50% of Americans do not feel any need for having high-speed internet service?" It is not a rhetoric question.

BTW, I wrote on the related subject before, http://www.henrykkowalczyk.com/kc_022.htm .

[Craig Aaron - Huffpost Blogger]

Apologies for not replying to the previous post.

I can't speak to your personal experience. But nationwide, where broadband is available, the sign up rate is about 65%, according to the figures I've seen. For those who don't subscribe it's usually because of income constraints or because they don't have computers. That's why part of our stimulus plan focuses on the demand side. Age is also factor, as the rates are lower among seniors.

Some don't yet see the value of Internet access -- but that's changing fast. It's undeniable that high-speed Internet access is becoming a necessity, not a luxury. Broadband is the fastest adopted communications technology in history.

[Henryk A. Kowalczyk - Huffpost Blogger]

Thanks.

My point is that in your approach you take my money and give it to the government to provide high-speed internet to people who do not feel a need of having it. At this point, it is less important if this is about 50% of population, as I observed, or slightly less as suggested by some figures you have seen.

I agree with you that in today’s world, without broadband connectivity, one cannot fully function. In this, I agree with you that our objective should be 100% (or close to it) high-speed internet penetration.

In your approach to achieve this goal (it is my impression, please correct me if I am wrong) you know the answer before the question is phrased – you want the government to take a bigger role. I prefer more patience; some people may need more time, but eventually they will join the club. As with cellular phones, prices will go steadily down, and availability will increase.

[ratkinson]

Craig, I’d be happy to engage with you or Ben or Derek on a substantive debate. But I’m not going to respond to insults and personal attacks. If you’d like to have a discussion on substance, let me know.

Rob Atkinson

[larry278]

Don't bother, any of the 3 of you. Make 2009 dead for substantive debate or news. We've had a 2 year campaign, a meltdown/d­epression, 2 wars & other dreck. Chill out till '10.

[research]

Sorry, plans changed.

750B$ for the stimulus, no questions asked.