Hi Stephen,

It would be hypocritical of me to criticize any nonprofit simply for receiving corporate funding, as corporate funding has been key to DDN's survival. At various points in time, DDN has received funds from AOL, AT&T, Verizon and SBC, among others. (Our last funders before shutting down at EDC were AOL, the Casey Foundation and Benton Foundation, for those who didn't know that. Our other funders, both for-profit and nonprofit, had whittled away in recent years.) DDN would never have been born, nor would it have survived, without corporate support. Having said that, we always felt it was important to be transparent and independent; our funders were always clearly identified on our website, and we also made sure that we could take positions on issues that were in opposition to some of our funders. Also, when DDN was founded, we accepted funds from donors in equal amounts so that none would have undue influence. Nothing we accomplished over the last six years would have been possible without private sector support.

Did LULAC receive this money specifically to advocate for these companies? Did they have one policy position before receiving funding and shift that position afterward? Do they try to obscure the sources of their funding or are they transparent about it? I'm not asking these questions to challenge your facts or anything - I just don't know the answers and would be interested in your perspective.

All of this raises broader questions about the role of money in digital divide policy advocacy, of course. Is one organization's funding "better" than another's because it came from philanthropic sources rather than corporate sources? How do organizations sincerely committed to bridging the digital divide survive in lean times without accepting corporate money? Should this even be a goal? Or do these partnerships lead to better engagement with the private sector?

andy


Stephen Ronan wrote:

Andy,

Do you think it would have beeen helpful for LULAC or the Miami Herald to have acknowledged that in 2004, LULAC received a $1 million dollar grant from SBC, and that LULAC's "Corporate Alliance Members" include: AT&T, BellSouth, Verizon and Sprint: http://www.sbc.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=21220 http://www.lulac.org/links.html#anchor551841:

Should we celebrate the active engagement in telecommunications policy of nonprofits being intensively funded by a set of phone companies that have tended to mix philanthropy and politics, at times to the apparent detriment of consumers? Might it not be better for such nonprofits to stay on the sidelines, while members of the nonprofit sector free of such conflicts of interest lead efforts to promote telecommunications policy in the public interest?

Principal LULAC arguments in the op/ed you cite include:

1) "We need to streamline or otherwise eliminate unnecessary red-tape imposed by state and local governments in deciding whether an otherwise qualified company should be permitted to get into the phone or cable business. 'Mother, may I' is truly bad policy in this technologically dynamic era."

What is LULAC getting at here? The phone companies urgently want to provide one-way transmission of video services to the public without needing to first agree to franchise terms with municipalities like the cable companies have had to do.

And if I interpret correctly, LULAC would like both phone and cable companies to be exempt from negotiating franchises with cities. My sense is that in many cities, such as Cleveland, Seattle and San Francisco, those franchise agreements have given a major boost to efforts to provide equitable access to technology.

At the same time there's a lot to be said for the efficiencies of a single statewide procedure, if the benefits of those efficiencies flow not just to corporations but also to disadvantaged citizens. It seems odd strategically that LULAC would at this stage of the game lead an attempt to cede the phone companies their desired goal, without making the case that cities and their citizens must get, as a result of any more efficient, streamlined process, a much better deal on average than they get through the current franchising system. It would be naive to assume that benefits accruing to phone and cable companies will naturally flow to consumers without explicit, enforceable provisions to ensure that.

2) According to LULAC, "any company that wants to compete in the voice-telephone business should be required to contribute to the Universal Service Fund (to ensure affordable phone service in remote and low-income areas), to offer emergency 9-1-1 services and to offer services for the hearing impaired such as Telephone Relay Service. There is reason for concern, as many companies that offer Voice over Internet Protocol (VoIP) services are trying to evade these obligations."

The phone companies are having their profits eroded by VOIP providers and would love to slow them down with burdensome regulations. But presumably LULAC should want them to survive and thrive. I would guess that LULAC's constituents are in small but increasing numbers taking advantage of services such as Skype, Gizmo, Google Talk, and Free World Dialup that enable them to make VOIP calls within the U.S. and overseas without being charged for the service.

In the quoted paragraph above, we see a LULAC position very much in sync with that of the phone companies. But just as LULAC thinks it efficient to skip municipal franchising, shouldn't it recognize that there are huge efficiencies to offering services at no cost, with no need to track and bill very minor payments. Does it really help achieve the goals of universal service to require services like Gizmo and Skype to bill each and every one of their users in order to send money to the universal service fund?

And as far as the situations where those or other VOIP providers do charge some customers, shouldn't any call by LULAC for such companies to contribute to the universal service program be accompanied by a call for reforms to the universal service program itself, reforms that may be unappealing to the phone companies? According to David Hughes, the program has historically piled monies into the coffers of the wireline telcos while operating to the severe disadvantage of wireless broadband providers. http://www.comtechreview.org/summer-fall-1999/looking_at_erate.htm

And Robert Atkinson argues, I think persuasively, that "any universal service payments made by VoIP services should go to supporting the build-out of broadband telecommunications, not to the PSTN" [The phone companies' public switched telephone network]. Atkinson writes that, "Using these revenues to support the 20th century circuit-switched network will only delay that transition to a robust, packet-switched broadband network for the 21st century. As former FCC Commissioner Reed Hundt stated, this would be as if government responded to Henry Ford's new invention of the automobile by discouraging the construction of roads and, instead, tax[ed] cars in order to subsidize canals and railroads. http://www.comtechreview.org/spring-summer-2005/000316.html

I wonder whether LULAC agrees with Atkinson's position and would promote it vigorously?

3) Finally, LULAC calls for, "nondiscriminatory deployment of video services to every neighborhood to ensure that the process is competitive and fair. In short, any reform must ensure that Hispanic neighborhoods get access to these new services as quickly as non-Hispanic neighborhoods."

Cheers to LULAC for staking out that position, which may clash with that of its major phone company sponsors. http://makeashorterlink.com/?D2E412C6C

- Stephen Ronan
  [EMAIL PROTECTED]


On Thu, 5 Jan 2006, Andy Carvin wrote:

Hi everyone,

Yesterday's Miami Herald featured an op/ed by Hector Flores of the League of United Latin America Citizens (LULAC) offering a Latino policy perspective on the digital divide. "In 2006, Congress will set out to rewrite the nation's telecommunications laws," Flores notes. "And if federal lawmakers get it right, Hispanic Americans, and consumers generally, could have much to celebrate. But if lawmakers misfire, the digital divide could explode into a digital abyss." Among his recommendations is to have more telecom companies contributing to the Universal Service Fund, source of the E-Rate funding used to subsidize school and library Internet access around the US.

I've written about the op/ed on my blog:

http://www.andycarvin.com

The full text of Flores' op/ed can be found here:

http://www.miami.com/mld/miamiherald/news/opinion/13553457.htm


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