Tech media love to be hard-hitting except when it comes to muni broadband
There are many tech-savvy media that publish compelling stories about technology and its implications. They ask probing questions and delve into technical details on a panoply of tech topics whether electronics, games, or cryptocurrencies. But that rigor disappears when it comes to the pros and cons of municipal broadband.
Indeed, many journalists consider the inherent superiority of government broadband as an article of faith. As a result, they pass off all materials promoting municipal networks as truth with little to no critique. A new report by the Berkman Klein Center is a case in point.
The lead author is David Talbot, a journalist who heads the Municipal Fiber Initiative, a project funded by the George Soros Open Society Foundation. The starting point of the project is that there is one essential broadband technology (fiber optic) and one essential delivery model (the municipality). This is the opposite of a technologically-neutral, market-based approach in which different broadband connectivity technologies compete with different offers.
The Berkman report is a knock-off of the Cost of Connectivity report from the New America Foundation (NAF), a think tank notorious for its firing of Open Market tech scholars for cheering antitrust action against lead funder Google. The NAF report has not been published in 4 years, but it was criticized for failing a fact check, statistical errors inherent in small sample size and selection bias, and flawed assumptions and inferences. It appears that Danielle Kiehl who wrote the shoddy NAF report believed it could be trotted out under a new banner at Berkman without garnering a critical review by the tech media, old wine in new bottles so to speak.
Many journalists reject information that doesn’t support their preconceived view. DSLReports‘ consumer reviews of internet service providers (ISPs) categorized under Happy, Unhappy, and Mixed offer some nuance to the complex market of America’s 4551 ISPs. One would expect that editor Karl Bode would hold all ISPs to the same tough standards, whether they were private or public, but in Bode’s eyes, municipal providers can do no wrong.
His blog extolls the Berkman study and paraphrases its press release. A Knight Fellow in Science Journalism would presumably kick the tires of such a report, but Clive Thompson gushes similarly in a copy-paste story in Boing Boing. FierceCable also blindly accepts the Berkman study, noting that it is “Leaving it to the best and brightest to confirm what we already suspected.” The study’s authors aren’t quant people, and the quality of Berkman’s econometrics has been challenged by many economists, but wasn’t it supposed to the be job of journalists to ferret out the truth, not to take it on faith? The Ecommerce Times rationalizes its love for the study by saying that municipal broadband is a hedge against repeal of the FCC’s 2015 internet regulations, but even municipal broadband providers objected to the FCC’s rules.
To its credit, Ars Technica which assures its readers that it never devolves into dogma or technology religion asks a critical question whether building municipal broadband networks increases local tax expenditures, but it reports that the Berkman study doesn’t address this issue.  It’s odd that these tech writers are so keen to look beneath the surface on other topics, but close their critical eyes to municipal broadband. Are they afraid that if they told the truth that the readers would change their minds, or least they may be more skeptical?
Indeed, such binary assessments (muni broadband good/private ISPs bad) are likely to repel critical readers. Michelle Caffrey of the Philadelphia Business Journal is disappointed by the flawed study and its “noteworthy exclusions”, noting it will harm the chances to “spread the municipal broadband gospel.” Of these media, only FierceCable reviewed an actual quantitative, academic study of municipal broadband. The definitive study was published last year by the University of Pennsylvania.
It identified 88 municipal broadband projects and analyzed the 20 that provide audited financial statements separately for broadband operations from electric power operations. That rigorous study found that more than half of those networks had negative cash flows – meaning they could not cover current operations let alone pay back debt. For the nine projects that were cash-flow positive, seven would need more than sixty years to break even, which is well above the estimated useful life of the network.
Only two generated sufficient cash to be on track to pay off the debt within the estimated useful life of the network. The authors of the Penn study also published a summary of the criticisms and rebuttals. A primer on the economics of municipal broadband offers further explanation.
Had the Berkman study authors the honesty to admit their limitations in skill and analysis, their report would not appear as such blatant advocacy. Instead they pass off their cherry-picked data as representative of the national marketplace. They ignore all the other costs that consumers and non-consumers in the areas served by the municipal network pay today and into the future. There is no mention of the direct and indirect subsidies that municipal providers get from the municipality nor the electric utility – all paid for by higher taxes and electric rates.
Just last year, the Auditor General of the State of Virginia found that in 2007, the electric utility in Bristol, Virginia improperly used between £14 million-£23 million in electric system revenue to illegally subsidize its broadband network. Additionally, the Berkman authors ignore the costs in future time periods to pay off the principle of the debt taken on to deploy municipal networks. As noted earlier, the UP study found that of the 20 networks that did not hide the financial accounts of the broadband operations, 11 generated negative cash flows and were not on track to pay off their debt ever.
But somebody must pay that debt, and the cost of that should be part of the analysis. If the municipal networks that Berkman analyzed properly allocated the principle of its debt across the reasonable lifetime of the asset, the prices would be considerably higher than they charge today, destroying Berkman’s predetermined conclusion. Readers of tech media can understand complex technical topics, including the complexity of municipal broadband.
Tech journalists owe their readers a critical assessment, not a parroting of policy positions they espouse.
- ^ electronics (arstechnica.com)
- ^ games (arstechnica.com)
- ^ cryptocurrencies (arstechnica.com)
- ^ report (cyber.harvard.edu)
- ^ Municipal Fiber Initiative (cyber.harvard.edu)
- ^ George Soros Open Society Foundatio (www.washingtonexaminer.com)
- ^ firing of Open Market tech scholars for cheering antitrust action against lead funder Google (arstechnica.com)
- ^ failing a fact check, (www.aei.org)
- ^ statistical errors inherent in small sample size and selection bias (hightechforum.org)
- ^ flawed assumptions and inferences (techliberation.com)
- ^ underlying data and methodology are bogus (hightechforum.org)
- ^ DSLReports (en.wikipedia.org)
- ^ paraphrases its press release (www.dslreports.com)
- ^ copy-paste (boingboing.net)
- ^ FierceCable (www.fiercecable.com)
- ^ quality of Berkman’s econometrics has been challenged (researcharchive.vuw.ac.nz)
- ^ many economists (www.realclearmarkets.com)
- ^ Ecommerce Times (www.ecommercetimes.com)
- ^ municipal broadband providers (ecfsapi.fcc.gov)
- ^ devolves into dogma or technology religion (arstechnica.com)
- ^ question (arstechnica.com)
- ^ Michelle Caffrey of the Philadelphia Business Journal (www.bizjournals.com)
- ^ reviewed (www.fiercecable.com)
- ^ quantitative, academic study of municipal broadband (www.law.upenn.edu)
- ^ summary of the criticisms and rebuttals (www.law.upenn.edu)
- ^ economics of municipal broadband (sglf.org)
- ^ the electric utility in Bristol, Virginia improperly used between £14 million-£23 million (www.apa.virginia.gov)
- ^ complexity of municipal broadband (www.aei.org)