Why are the Telecom Incumbents So Scared?

[SOURCE: saschameinrath.com]
[Commentary] Back in February 2005, I'd uncovered that telecom incumbents had spent over $300,000 to defeat local referenda allowing municipal broadband. By comparison, local pro-muni grassroots organizers spent a grand total of $4,325 to support their position. Anyone can tell you, being outspent roughly 70 to 1 places you at a serious disadvantage -- but these odds are downright rosy compared with the amount of funding that was recently poured into local Iowa elections to defeat muni-broadband referenda. Check out these stats. Mediacom Communications Corporation: 1) Gave $805,000 in cash to the anti-muni campaign. 2) Donated 16,366 commercials on 25 cable television networks (yes, 16,366 commercials on 25 cable television networks -- take a moment to let that sink in). 3) The campaign spent $921,870 on consultants, opinion polls, telemarketing, direct mail pieces and media production and advertising. Qwest Communications Incorporated, on the other hand, "spent $94,494 to oppose the city-owned telecommunications systems." All of this for 26 towns, villages, and cities -- a tiny geographic area of Iowa. Perhaps this'll help bring this into perspective -- the math works out to roughly "$4.75 for every man, woman and child in those mostly small towns. By comparison, Rep. Jim Nussle spent $3.34 for every man, woman and child in Iowa’s 1st Congressional District to win reelection last year." That's right, per capita spending was greater to defeat municipal broadband than to elect the area's congressional representative. Perhaps the best synopsis of the problem was stated by Scott Sackville of Hampton, Iowa, "'The sheer number of dollars being pumped into Hampton, Iowa, you wonder where the money's coming from,' he said. 'It's coming from our telephone and cable rates. If they'd put that back into services and running their businesses, then they wouldn't have anything to worry about.'" With these huge expenditures being spent by telecommunications giants to defeat local referenda, it begs the question, "If their services and prices are so great, why are the telecom incumbents so scared?"
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