Press advocates pan FTC’s suggestions to aid journalism

Monday, July 26, 2010

The Federal Trade Commission’s recent release of draft proposals to help save the floundering journalism profession hasn’t made many people happy.

The 47-page document, “Potential Policy Recommendations to Support the Reinvention of Journalism,” lays out a number of suggestions to help aid the struggling newspaper business, which, it says, is “moving through a significant transition in which business models are crumbling.”

“We seek to prompt discussion of whether to recommend policy changes to support the ongoing 'reinvention' of journalism, and, if so, which specific proposals appear most useful, feasible, platform-neutral, resistant to bias, and unlikely to cause unintended consequences in addressing emerging gaps in news coverage,” the FTC said in a June 4 press release. “We anticipate that different participants in the roundtables at which this document will be discussed will criticize some or all proposals, improve others, and add ideas of their own. The purpose of this document is precisely to encourage such additional analyses and brainstorming.”

Granting news organizations tax exemptions, allowing antitrust exemptions for publishers, expanding copyright restrictions and government subsidies for news organizations are a few of the FTC’s main suggestions.

The FTC proposals also include a nearly 5% tax on consumer electronics, including cell phones, with the proceeds going directly to public broadcasting. The FTC has offered an online forum for visitors to submit comments, criticisms and suggestions regarding the proposals.

Perhaps the most controversial suggestion involves a doctrine of “proprietary facts.” That is, a publication would “own” facts if it was the first to report them.

In a June 3 New York Post op-ed, Jeff Jarvis, associate professor of journalism at the City University of New York, wrote, “Copyright law protects the presentation of news but no one owns facts — and if anyone did, you could be forbidden from sharing them. How does that serve free speech?”

It is undeniable that the news industry is struggling. According to, nearly 20 daily newspapers have either gone online only or shut down completely for lack of advertising and funds to support themselves. But many journalists and their advocates say the FTC has crossed a line with its idea of “reinventing journalism.”

In its June 4 release the FTC took pains to say its document was merely designed to encourage new thinking. “The FTC has not endorsed the idea of making any policy recommendation or recommended any of the proposals in the discussion draft.”

But harsh criticism seems to dominate the suggestions the agency has received. Most respondents on the online comment forum have expressed fear of government constriction of news.

As Jason Stverak, president of the Franklin Center for Government and Public Integrity, said in a June 4 statement on the center’s website, “Expanded government influence on journalism would be disastrous to the reputation and credibility of journalists.”

Stverak went on to say journalists would not be able to report credibly on subjects that were important to people, but instead would focus on stories that the government considered priorities. Writers would inevitably shy away from stories involving scandal or corruption, he said, because of the possibility of losing government funding.

As Ed Morrissey, a contributing writer to the right-of-center blog Hot Air, put it on June 2, “This is not a document meant to salvage an independent press. It’s a road map for government control over the news.”

From many of the comments on the FTC forum, it would seem that the proposal's critics see government becoming the mama bird that feeds the helpless baby bird of journalism, but without benevolent results.

As of today, all 50 of the most recent posts opposed the notion of government interference with the news media.

One visitor, identifying herself as Theresa Lancaster of Florida, wrote, “It is not the job of the American taxpayer to save journalists … . It is not the role of the government to bring back the art of investigative journalism … the media and the government should remain distinctly separate and watchful and wary of each other. This is the intent of the Founders and a core tenant (sic) of democracy.”

Pollster Scott Rasmussen of conducted a public-opinion survey June 10 on the FTC’s idea to “reinvent journalism,” with results similar to that of the FTC online forum.

Cell-phone taxation? Eighty-four percent of Rasmussen poll respondents opposed it. A similar majority booed a 5% tax on consumer electronics: 76%. Asked whether or not they would support an “Americorps-esque” program that would pay a new wave of journalists with federal dollars, 71% said no way.

Still, some people have found the FTC's ideas not too far-fetched and would welcome some continued, limited government support.

Geoffrey Cowan, University of Southern California Annenberg School dean emeritus, and senior fellow David Westphal argue in their January 2010 research study, “Public Policy and Funding the News,” that the government has already had a significant hand in the journalism field since our Founding Fathers subsidized the postal system for newspapers.

Westphal and Cowan also suggest that several prominent public agencies, such as the FCC, U.S. Postal Service, Corporation for Public Broadcasting and the Department of Treasury’s Internal Revenue Service have provided or are providing direct or indirect support to news organizations.

“Federal and state tax laws (already) forgive more than $900 million annually in taxes related to newspapers and magazines. Print publications received about $150 million in federal tax breaks in the 2008 fiscal year,” Westphal and Cowan said.

Columbia University President Lee C. Bollinger, writing in the July 14 Wall Street Journal, said, “We already depend to some extent on publicly funded foreign news media for much of our international news — especially through broadcasts of the BBC and BBC World Service on PBS and NPR. Such news comes to us courtesy of British citizens who pay a TV license fee to support the BBC and taxes to support the World Service. The reliable public funding structure, as well as a set of professional norms that protect editorial freedom, has yielded a highly respected and globally powerful journalistic institution.”

Bollinger also said that the federal government provides billions of dollars for research at universities with no interference.

The FTC held three public workshops in Washington both to gauge opinion on the subject and to welcome other solutions or improvements. In a June 15 workshop, “How will journalism survive the Internet Age?,” Chris Ahearn, president of media at Thomson Reuters, strongly voiced his disapproval of the FTC’s suggestions. With new advances in multimedia and Internet capabilities, Ahearn said, “we will see the evolution to a new golden age of journalism and much, much more.”

Others shared the same sentiments, including Stverak, who said, “The reanimation of journalism arises in new online nonprofit news ventures, not government intervention.”

In his New York Post opinion piece, Jarvis said he had testified before the FTC that his research at CUNY’s Graduate School of Journalism found “profitable hyper local bloggers selling $200,000 in ads per year. And we built new, less expensive business models for news at”

Jarvis said he had told the FTC that the world of news was “entrepreneurial, not institutional,” and that journalism needed to find new and innovative ways to present the news and create its own business model for success, not have the government do it.

“I’m optimistic to a fault about the future of news and journalism … because the barrier to entry into the media business has never been lower — and that means news can grow,” Jarvis wrote.

Robert G. Picard, a leading expert on media economic management and government communication policy, said June 12 on his blog, “The FTC ignores the fact that most newspapers are profitable (the average operating profit in 2009 was 12%), but that their corporate parents are unprofitable because of high overhead costs.”

The June 15 FTC public forum was the last and according to The New York Times, “the commission is expected to produce a final study late this year.” An FTC spokeswoman would not provide more precise information than that.

The FTC has a lot to ponder over the coming months as it begins to compile opinions and data to make a final recommendation.

But the reaction by most against the FTC’s suggestions seems clear, strong and far-reaching. Perhaps it could be summarized by what Jarvis told the commission in Washington: “Get off our lawn.”

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