Frank's assessment of folk music is among the most astute I've come across. While I wholeheartedly support the idea that all folk music is culturally based as Frank defines that, there is a lot of grey area about the "tradition" part.
As some have pointed out, if we use Frank's definition, Woody Guthrie doesn't really fit the definition.
And as ludicrous as it might sound, I would say that according to the strict definition of folk music, Woody really wasn't an authentic folk musician in the strict sense. That is in fact, what I believe.
Woody didn't perform the music of his cultural group, he created almost a new category of folk music culture in the US, much the same way Ewan MacColl did in Britain: the folk music revivalist tradition. In Britain, self-penned traditional sounding songs were not often considered to be true folk, in the US they were.
But to illustrate the difference as I see it: Dolly Parton's roots are in an authentic folk subculture, but the music she performs professionally usually doesn't.