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.

Original here