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Installing fiber optic cable in Vermont in May. 2007 for TV, phone and Internet. (AP photo)

Corporate-funded research designed to influence public policy

COMMENTARY | October 01, 2007

Reports by well-known think tanks and individuals funded by telecoms are helping quash competition, increase phone rates and set up a corporate-oriented Internet system. Is there any reason to trust these reports? Or to trust experts who testify before regulators without revealing the sources of their funding?

By Bruce Kushnick

Whenever I receive new data or a report, the first question I ask is, does it pass the smell test?

It is clear that we are in the age of "stink tanks,” in which corporate-funded think tanks and well-paid, credentialed academics are hired to make corporate arguments and give the appearance of being independent experts.

My field is the telecoms—I’m the chairman of Teletruth, an activist group that often finds itself in opposition to the hired guns of Verizon, AT&T and the cable companies.

In telecommunications, media broadband, wireless and the Internet, think-tank reports have helped quash competition, block municipalities from rewiring their own cities, increase phone rates and obstruct Net neutrality initiatives. This is all done in the name of saving money, creating competition, jobs and economic growth, improving and spreading broadband and helping consumers.

It may be that some researchers have great integrity and are well-meaning no matter who funds them. But as long as they are being funded by corporations with a stake in the outcome, their research should be viewed skeptically by reporters and editors. And that’s true especially of researchers and witnesses who don’t reveal their affiliations at hearings.

The think tanks often describe themselves as non-partisan, independent, free-market, free-enterprise, limited-government, or market-oriented. Their expert witnesses often bear credentials such as "professor of" or "former" FCC, FTC, state commissioner, Congressman, staffer.

Some have good reputations for serious studies on economic, political and foreign policy issues, albeit perhaps with an ideological slant. But good reputation or no reputation, when it comes to the telecoms and such issues as broadband, often these groups are nothing more than consulting firms that pursue the goals of the large corporations that are their clients and financial supporters.

Such groups and individuals don't always reveal their funding sources, and they exist, mainly, as tax-free non-profit groups, saving billions in taxes. And because they have high-level access and respect, their effect is to devalue the public interest and create harmful public policies.

This is happening in all segments of political discourse. Need research to question global warming? Want the proof that smoking cigarettes is really good for you? That a drug's benefits outweigh its risks?

Often what for-hire think tanks do is give legislators and regulators a rationale to do what they want to do anyway. On Sept. 6th, 2007, for example, the Justice Department filed a response to a request from the Federal Communications Commission (FCC). Justice claimed that Net neutrality regulation is not needed. That view works to the benefit of large corporate broadband users and to the detriment of almost everyone else who goes online. [Click here for an earlier Nieman Watchdog article on Net neutrality.]

Justice was taking the position the telecoms wanted it to take. It repeatedly cited research and comments by groups or individuals that are funded by the telecoms, to the exclusion of other, contrary comments.

Among those in support of the telecoms were these groups and individuals:

On Sept. 12th, Free Press, a media reform group, filed a Freedom of Information request aimed at uncovering undue influence on the Justice Department. In a press release, the group stated: “We want to know if the Bush administration’s lawyers reached out to any of the thousands of groups, businesses or individuals who support Net neutrality – or if they only talked to industry lobbyists at AT&T and Verizon.”

There are hundreds of think-tank groups, many working together on projects, to make sure their research gets the most attention.

Among leaders of this pack are Issue Dynamics and the New Millennium Research Council.  (See Teletruth's Bell SkunkWorks101 page for background.)

Issue Dynamics is a Washington-based organization created by Sam Simon, a marketing and public-relations expert. It is one of AT&T and Verizon's favorite providers, handling many of the phone companies' behind-the-scenes operations.  

In 1999, Issue Dynamics created The New Millennium Research Council (NMRC). Through it, think tanks can work together and have a marketing and PR arm to get their message out. To remove some of the bad aroma, Issue Dynamics mixed in legitimate organizations with corporate-funded entities, allowing this all to look more credible. This is a description on an NMRC Web site:

Over its 8-year history, the NMRC has worked with more than 100 scholars and experts from across the country. The NMRC is proud to have partnered with leading thinkers from the Brookings Institution, the Heritage Foundation, the Progressive Policy Institute, the American Enterprise Institute, the Pew Internet and American Life Project, Harvard University, and UC Berkeley, among many other nationally renowned think tanks, universities, and organizations. Please see our full list of contributing scholars for more information.

In almost every instance, the experts listed by MNRC or the groups they are tied to are funded to some extent by the phone companies. They are paid by them to write reports, put out data and supply testimony that is targeted only toward their corporate funders’ wishes. If some company gave you $100,000 or a million dollars would you write something inimical to the reason you received the funding?

Yet relationships like these have become so normal, so standard, that few people question them these days. It’s as though business is supposed to be the academy’s big brother, and why would anyone question whether the beneficiaries are beholden to the donors?

Some New Millennium Research Council experts are from these groups:

Over several years, and most recently in February 2007, WiFi Networking News has run articles by its editor, Glenn Fleishman, on the interactions of some of these groups, showing, among other things, how their reports have worked to block cities from doing their own wiring for broadband.  One item cited by Fleishman is a report by the New Millennium Research Council titled "Not in the Public Interest – The Myth of Municipal Wi-Fi Networks."

In a flow chart, Fleishman pointed out that almost all the data and presentations in the report were put together by "sock puppets," that is, groups funded by the phone companies. Included were the U.S. Internet Industry Association, The Heartland Institute, Competitive Enterprise Institute, Institute for Policy Innovation, The Beacon Hill Institute at Suffolk.

The chart shows connections between Verizon, Issue Dynamics, New Millennium Research Council and astroturf groups such as Alliance for Public Technology, and certain researchers. (‘Astroturf’ is the name given to corporate-backed groups posing as genuine grassroots organizations.) They all work together on a specific topic with a specific goal – say to take down municipalities wishing to upgrade their own communities using wireless technologies, thus bypassing the local phone incumbent or cable firms.

I went over the records of an important Federal Trade Commission hearing on Net neutrality earlier this year. I found that at least 15 presenters to the FTC—the majority—either worked or used to work for the phone or cable companies. Included were representatives of the Progress & Freedom Foundation, Phoenix Center, and Hands Off the Internet, as well as funded individual experts such as Gregory Sidak of Criterion Economics, a visiting professor Georgetown University Law Center; Alfred E. Kahn of NERA (National Economic Research Associates, Inc,) professor-emeritus Cornell University, and William Lehr, research associate, Computer Science and Artificial Intelligence Laboratory of the Massachusetts Institute of Technology. 

None of the speakers identified their corporate ties in the biographies presented in the FTC materials. Yet the outcome of the conference—planned in advance—was to create a report useful to these same corporations. Wasn’t  disclosure called for? Did the FTC knowingly make policy decisions without investigating who was presenting?

Even more disturbing: A simple calculation of who is quoted in the report and the number of times they are referenced reveals that corporate-funded speakers Lehr and Sidak were quoted 33 times and 25 times, respectively. On the "other" side, Consumer Union was quoted only six times and Media Access Project 11 times. Was their information that much less credible and compelling?

What should happen with these groups and individuals that pass as independent think tanks or expert professors but that are in part paid consultants working to help big corporations achieve their goals?

Here are some very straightforward next steps:

1. The Internal Revenue Service should remove their non-profit status, with Congressional authorization and direction if necessary.

2. The IRS should consider imposing penalties for violation of non-profit status.

3. The Justice Department should investigate bringing criminal and civil charges for defrauding the government.

4. Congress should require disclosure of all related payments from all corporations, associations, etc., by individuals seeking to testify at any public hearing or other event before the FTC, FCC, Congress, state and federal regulatory and governmental agencies.

An important question is whether the Democrats, now that they have a majority on Capitol Hill, will attempt to take any such steps or whether they will be as supportive of the telecoms and other corporate interests as the Republicans have been. So far, the answer is mixed. Rep. Edward Markey of Massachusetts, head of the Commerce Committee’s Telecom Subcommittee, has been pro-consumer, and both the Senate and House have been asking the FCC for better data on broadband. But the system is so awash with telecom and cable money that, in my view, it’s unlikely that serious questions will be asked or investigated with any rigor.

This is Bruce Kushnick’s tenth article for NiemanWatchdog. Click here for the previous ones.

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