Megan McArdle

« Markets in Everything: Bone Marrow | Main | Is Amazon an Oligopolist? »

Flow of Funds

29 Oct 2009 10:32 am

The Telecoms industry is apparently even more insidious than I thought:

Via some outfit called VoIP News, I'm intrigued to learn that my insidious paymasters at Cato number among the 15 greatest enemies of net neutrality. Scary!  Turns out Cato is a "hired voice of reason" which, along with CEI "seems to draw its funding from a smattering of every major corporation ever to fund lobbyists." Damning stuff!  And these guys are Totally Serious Journalists, so they did some kind of due diligence and fact checking, rather than just pulling this stuff out of their asses, right?

<crickets>

Well, hey, no, I mean, I'm sure Cato is totally shady about its funding sources--how could they possibly check this stuff?

What's that? Annual report? Freely available online, you say? Well, and so we get tons of our budget from... Huh? One percent from corporations? None from telecoms in 2008?

Now, obviously serious reporters wouldn't just utterly fail grade-school level fact checking. Clearly, some devious ISP must have blocked them from reaching this easily accessible information!  Further demonstrating the need for Net Neutrality!

The fact that all free market, small government efforts are entirely funded by a combination of three scary billionaires, and a bunch of big self-interested corporations, is a sort of stylized fact among a certain portion of the progressive media.  Apparently, checking this theory would be like trying to get three separate sourcs to tell you that the sky is blue.

Comments (31)

The Telecoms industry is apparently even more insidious than I thought:

Have you seen the Ars Technica article, Want 50Mbps Internet in your town? Threaten to roll out your own? If not, read it, which ought to further reinforce your telecom theory.

Joshua Lyle (Replying to: Jake)

I did. It just convinced me that letting government regulate the telecom industry is even more insidious than I thought.

Calvin Jones and the 13th Apostle (Replying to: Joshua Lyle)

So what would you suggest? Since leaving the Telecoms to their own devices would be just as bad.

I suggest owning infrastructure. It would be nice if that were subject to less legal interference (something mentioned in the article).

Joshua Lyle (Replying to: Jake)

Speaking of Ars Technica articles, I picked up a nice list from this one. The exceptions to the FCC proposed rules for net nutrality include:


* To manage congestion on networks
* To address harmful traffic (viruses, spam)
* To block unlawful content (child porn)
* To block unlawful transfers of content (copyright infringement)
* For "other reasonable network management practices"

My concern is that you can drive a great big truck through the loophole here that may leave us worse off if this includes things like encrypted onion-routed traffic, which it may well, since how can you perform deep-packet inspection on such traffic to ensure that you're blocking unlawful content?

Joshua Lyle (Replying to: Joshua Lyle)

To clarify, I'm not saying that carriers would necessarily be compelled to ban such traffic, only that this may enthrone banning it as a "reasonable network management practice", deeply violating the "all bits are created equal" norm.

...Apparently, checking this theory would be like trying to get three separate sourcs to tell you that the sky is blue.

Or confirming Rush Limbaugh actually said outrageous thing "x". No one bothers to confirm that which they know to be true. Which is a problem only when what you know turns out to be not so.

Never mind that the bulk of Cato's funding does, in fact, come from moderately scary billionaires, along with some slightly less scary millionaires.

But hey, it's their inherited money, they can do what they want with it. And I'm sure not one of them has any telecom stock at all, nosir. Anyway, it's not like any of the fellows at Cato could be bribed or influenced by money *cough cough Doug Bandow cough*

Okay okay, my cynicism aside, the VoIP article was pretty stupid. They shouldn't have said that Cato "draw(s) its funding from a smattering of every major corporation ever to fund lobbyists." That was shoddy journal--- what's that? The article doesn't say that about Cato? It actually says that about a completely different think tank, which actually does draw the bulk of it's funding from corporations?


Well...okay then.

Nimed (Replying to: Omnissiah)

"Also like the Cato Institute, CEI seems to draw its funding from a smattering of every major corporation ever to fund lobbyists."

Omnissiah (Replying to: Nimed)

Geez, I need to have my reading glasses checked, I guess. Shoulda know better, I've never seen Sanchez make an obvious mistake before.

Peter Twieg (Replying to: Omnissiah)

But hey, it's their inherited money, they can do what they want with it.

Thanks for illustrating a detail of the stereotype that Megan left out: Not only are libertarian think-tanks funded by shadowy billionaires, but they're shiftless shadowy billionaires who haven't even earned their wealth in any meaningful sense.

Boooring... and lazy.

Writing about net neutrality itself, as well as CATO's position on this issue, would be far more interesting than echoing the debunking of a VoIP article.

Also, the last paragraph's deserves an Unintentional Irony Award for denouncing the progressives' caricaturization of small-government advocates with a caricature of progressives' opinions.

wiredog (Replying to: Nimed)

First we have to define "net neutrality". The FCC definition seems reasonable to me, as it recognizes the limited bandwidth available, especially in the wireless arena, and doesn't say anything about limiting the cost of a limited good.

Brian 2 (Replying to: Nimed)

I like Eric Raymond's take:

Mistake #1 for libertarians to avoid is falling for the telcos’ “we’re pro-free market” bullshit. They’re anything but; what they really want is a politically sheltered monopoly in which they have captured the regulators and created business conditions that fetter everyone but them.

OK, so if the telcos are such villainous scum, the pro-network-neutrality activists must be the heroes of this story, right?

Unfortunately, no.

I am going to have to ask for a link about the color of the sky.

Rob Lyman (Replying to: Yancey Ward)

It's grey where I am. No link, though, too lazy.

Ian Argent (Replying to: Rob Lyman)

It's the color of a TV tuned to an empty channel of course. (Which, depending on your age and the age of the TV, could cover either of those answers)

I looked over their roster of contributors, and didn't see anything from the Herb and Matilda General Store Foundation (Bigger, Arkansas, pop. 355), which surprised me, as I thought the Cato Institute got the bulk of their funding from Mom and Pop types, and not from multimillionaires, like John Malone, of Liberty Media, who I'm sure has only a passing interest in the outcome of Net Neutrality (big words deserve big letters, you know).

The indignation from the Cato Institute rep(?) was quite shocking, to say the least. It's seriously damning stuff. Really. I'm sure that the Cato Institute would never, ever, ever bend the facts to fit the conclusion. Never. Ever. Ever. Not net neutrality. Not healthcare. And most certainly not smoking. Anyway, one would hope that the Cato Institute would someday aspire to hire actual people that can pass a grade-school level of reading and writing comprehension, unlike those stupid reporters, but the public school system does have its cracks, and sometimes people do squeeze through.

Calvin Jones and the 13th Apostle (Replying to: Bill Davis)

It's too bad that Sanchez didn't get his facts straight. Of course CATO bends its facts to fit what its donors want. Just look at the lineup. Who knew that VW was Libertarian? Tobacco companies? Shocker!! Wellpoint? And if you look at the names, most of them are CEO's(or former CEO's) of big corporations. It makes me wonder how many of those CEO's(and ex-CEO's) would have ever passed the drug test most probably make their employees take on condition of getting hired.

Shrug. Big surprise. These are the same people who get all worked up when private companies spend a few tens of thousands funding anti-AGW studies while tens of millions are poured into pro-AGW studies/agitprop by people like Gore who have huge investments that depend on rent-seeking via AGW regulations.

Julian Sanchez really disappointed me. He really protests too much. That not of the corporate sponsors are telecomms does not mean that telecomm money does not flow into Cato. The Foundations? What do they have their fund invested on? The Individuals? Where do they work? What are they business interests?

Really Sanchez's argument about the corporate sponsors is the kind of BS that I would expect from NRO, not from him. Its kinda like the arguing that Geroge Bush wasn't a moron because he went to Yale.

"Net neutrality" is bullshit.

By which I mean, primarily, the term is bullshit.

The hyperventilators would have you believe that the evil telco will censor your access to websites (as if AT+T or Qwest care about the websites you look at).

This is primarily (or if one wishes to be charitable, entirely) ignorance based on confusion about what the "pro-neutrality" complainers (ie, Google) are complaining about.

"Net neutrality", from the Google side, is about Google not having any disadvantages compared to colocated caches, and not having to worry about the provider's own phone/VOIP system not being on "general internet" bandwidth (ie, guaranteeing service quality even when someone on the network segment is using bittorrent to steal DVDs). (There are also complaints about open-internet traffic charges vs. locally mirrored CDN network traffic, but that's even more arcane.)

Google's "neutrality" - as currently pushed - would prevent traffic shaping and QoS necessary to let low-latency traffic that cares about delivery order (VOIP, gaming) coexist on a network with traffic that uses huge amounts of bandwidth but doesn't care about some latency (bulk data transfer; normal file downloads and torrents, legal and illegal).

People pushing "net neutrality" as if it's "preventing censorship or keeping Comcast from charging you an extra ten bucks to see the websites you want" (neither of which actually happen or are going to happen, of course) are either deeply mistaken or simply lying. I tend to assume the former from most of them, because all they know about the issue is press releases, rather than technical analysis.

Some, however, have to know better...

(Further sources: Richard Bennett (cache because of "Bandwidth exceeded" at the moment), (and more here), network engineer and low-level protocol guy.)

Calvin Jones and the 13th Apostle (Replying to: Sigivald)

People pushing "net neutrality" as if it's "preventing censorship or keeping Comcast from charging you an extra ten bucks to see the websites you want" (neither of which actually happen or are going to happen, of course) are either deeply mistaken or simply lying. I tend to assume the former from most of them, because all they know about the issue is press releases, rather than technical analysis.

While it hasn't happened yet, that doesn't mean it won't happen in the future. Try living in the Philadelphia area and watching any of the Phillies, Sixers and Flyers games using Dish or DirectTV(meaning the local broadcast).

I have no opinion on net neutrality, and I think good research is good research, regardless of who funds it. But libertarian think tanks really, really have to stop with this line of bullshit about their sources of funding. *Of course* the direct contributions from corporations are small, because it's obviously unseemly for a corporation to make direct contributions to research that is primarily about THEM. Instead, as others here have pointed out, the money is funneled through a foundation or it's contributed by the CEOs and other top officers of the corporation, neither of which get counted as "corporate" money.

So, Michael Cannon's health research isn't funded by the health insurers, no. It's funded by the "Wellpoint Foundation" and the "Assurant Health Foundation." Which is akin to those companies saying: "No, we didn't contribute to Max Baucus' campaign -- our PACs did that!"

If these groups want to be taken seriously, they have to do much better on the transparency front than this. Don't just say how much was contributed by "individuals" -- list who the top ten contributors are. Or if that's too invasive, list what proportion of funding came from individual contributions of less than $500. List what sectors employ the individuals who contributed. Or just own up to the fact that you *aren't* going to be fully transparent, and deal with the fact that this question will hang over you. But the "1% corporate funding" line is just pure unadulterated bullshit.

Alsadius (Replying to: R.J. Lehmann)

So you believe that major corporations are funneling their money through other individuals in order to avoid appearing on public disclosure lists? And this money is tax deductible too? I'm sure the IRS would love to see the evidence you've collected on this issue.

David Nieporent (Replying to: R.J. Lehmann)
List what sectors employ the individuals who contributed.
You've apparently confused this with campaign finance. Cato et al. are simply not-for-profit organizations, like the Red Cross or your local church. When you write a check to them, you're not required to disclose your employer. Cato does not know the "Sectors" that employ the individuals who contributed.
If these groups want to be taken seriously, they have to do much better on the transparency front than this.
These groups already are taken seriously. The people who don't take them seriously are the ones who won't take seriously anybody who produces results they disagree with, in which case phony concerns about "transparency" are just pretexts.

Heh, this title reminds of an Aeon Flux episode:

"You fool! You've cut off the flow of funds!"

The Cato annual report that Mr. Sanchez linked to is unaudited.

That may mean nothing. But pointing skeptics to an unaudited financial report seems silly.

Attempting to attack funding sources is usually the province of those who can't shoot down the conclusions on evidential grounds, so they try to poison the well and hope nobody looks at the evidence for their own position. BTW, any advocacy group for anything is likely to get a substantial amount of funding from people who are significantly above the median income-they're the ones who have extra money available to fund causes.

Excuse me? This is a progressive phenomenon? Those same three billionaires exist in the right-wing mind, too. I'm not yet thirty, and I don't really have much of an idea who George Soros is, but apparently I work for him.

TheRadicalModerate

I'm still trying to wrap my head around a VoIP rag that thinks that net neutrality is good for their industry. VoIP runs over the RTP protocol, which essentially has no congestion control and will (when we get close to congestion limits on consumer networks) fail spectacularly without differentiated services.

Comments on this entry have been closed.