How “dark money” groups help private ISPs lobby against municipal broadband

Cities and towns that build their own broadband networks often say they only considered the do-it-yourself option because private Internet service providers didn’t meet their communities’ needs. When a cable or phone company’s Internet service is too slow, too expensive, not deployed widely enough, or all of the above, local government officials sometimes decide to take matters into their own hands.

Hundreds of municipal broadband networks have been built around the US as a result, including dozens that have started operating since 2021. The rise of public broadband hasn’t happened without a fight, though. Private ISPs that would rather face no government-funded competition have tried to convince voters that public networks are doomed to become boondoggles.

Opponents of public broadband don’t always attach their names to these campaigns, but it often seems likely that private ISPs are behind the anti-municipal broadband lobbying. Public broadband advocates say that over the past few years, they’ve seen a noticeable increase in “dark money” groups attacking public network projects.

One prominent recent example is the “NoGovInternet” campaign run by the 501(c)(4) Domestic Policy Caucus. NoGovInternet has been fighting the UTOPIA (Utah Telecommunication Open Infrastructure Agency) fiber collective in Utah in what seems to be an attempt to dissuade other cities and towns from joining the multi-community network. The group’s effort included TV ads as part of a campaign that reportedly cost $1 million.

Nonprofits registered as 501(c)(4) “social welfare organizations” are allowed to engage in some political activity. Public broadband advocates suspect that 501(c)(4) groups fighting municipal networks are funded by private ISPs. There’s evidence to support this belief: Even though 501(c)(4) groups don’t have to reveal donors, they sometimes list ISPs as “partners” or as sponsors of a conference.

“It’s just very easy to set up these 501(c)(4)s where you don’t have to reveal the donors,” Gigi Sohn, executive director of the American Association for Public Broadband (AAPB), told Ars.

Sohn is a longtime consumer advocate who was nominated by President Biden to serve on the Federal Communications Commission. When Sohn’s nomination stalled in the Senate last year, she said that cable lobbyists and dark money groups had distorted her record and in effect were allowed to “choose their regulators.”

“Social welfare” groups fight public broadband

The AAPB group that Sohn now runs is a 501(c)(6) that represents community-owned broadband networks and co-ops. The 501(c)(6) designation is generally for business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues, the Internal Revenue Service says.

501(c)(6) and 501(c)(4) groups are similar in that they don’t have to reveal donors. But it can be less clear who is behind a 501(c)(4) because of a nebulous phrase: “social welfare organization.” Even the IRS says the 501(c)(4) social welfare designation is an “abstruse concept that continues to defy precise definition.”

The Domestic Policy Caucus is about a decade old but appears to have started its campaigns against municipal broadband in October 2023. The group is led by Patrick Rosenstiel, who is also involved in the National Popular Vote campaign.

Public broadband advocate Christopher Mitchell told Ars that when the COVID-19 pandemic made home broadband access even more important to Americans than it already was, “the cable and telephone companies lost a fair amount of their power and sway in state legislatures. Now, I kind of think they’re trying to figure out how to operate in the new environment.”

Mitchell, director of the Institute for Local Self-Reliance’s Community Broadband Network Initiative, said that in this new environment, it is “obvious that we need more investment in networks” and a bigger focus on making broadband affordable.

“Municipal broadband is something that nearly everyone supports, unless you work for the cable company,” he said. The dark money campaign that tried to tarnish UTOPIA’s image, Mitchell suspects, “is about finding messages that will resonate that these big cable and telephone companies could use in other states.”

When a cable company opposes a municipal network under its own name or a group that it is obviously associated with, they get “laughed out of the city or town,” Sohn said. One example came in 2017 when voters in Fort Collins, Colorado, approved a city broadband network despite a lobbying campaign funded by business and trade groups that Comcast belonged to.