FTC's Provocative Discussion Paper on Saving Print Media

The Federal Trade Commission—which last year created guidelines to impose ethical standards on bloggers—is now taking on the ambitious task of saving the print media in the Internet era.

In preparation for the final in a series of hearings on the future of the news media, the Commission has released a staff report that makes some pretty bold proposals, including legal changes and even government subsidies for traditional media.  The final hearing will be held June 15 at the National Press Club in Washington, D.C. 

The report carefully notes on the first page that "[t]his draft does notrepresent final conclusions or recommendations by the Commission or FTC staff; it is solely for purposes of discussion."  The Commission issued a subsequent press release to clarify this. The proposals in the report were raised by panelists testifying at the FTC hearings, not generated by the FTC itself. 

Among the proposals in the report:

  • amend the Copyright Act to specifically recognize the "hot news" doctrine, which a few courts have used to protect exclusive news reports and information for a brief period of time after publication;

  • amend the Copyright Act to limit or clearly define the fair use doctrine with respect to news aggregators;

  • create a government- or privately-run copyright licensing system for the news industry;

  • create antitrust exemptions to allow news organizations to create a system for news aggregators and others to pay for the use of online content, and to erect pay walls for online content;

  • establish a “journalism” division of the AmeriCorps youth public service program;

  • increase government funding for the Corporation for Public Broadcasting;

  • establish a national fund for local news, using funds from FCC fees on cell phone users, television and radio broadcast licensees, or Internet service providers, or from taxes on consumer electronics or advertising;

  • provide a tax credit to news organizations for every journalist they employ;

  • create "Citizenship News Vouchers," which would allow taxpayers to allocate some amount of government funds to the nonprofit media organization of their choice;

  • provide grants to universities to conduct investigative journalism;

  • allow the Small Business Administration to insure loans to fund new nonprofit journalism organizations;

  • change existing law to allow domestic broadcast of content created for the Voice of America and Radio Free Europe/Radio Liberty;

  • increase existing postal subsidies for newspapers and periodicals;

  • amend IRS regulations or the tax code to clarify that journalism may qualify as a tax-exempt purpose under section 501(c)(3) and elucidate the limits on political and commercial activity by nonprofit news organizations; 

  • revise tax laws to promote and facilitate the creation of new corporate models for news organizations, including "program-related investments," "flexible purpose or benefit corporations," and socially-oriented limited liability corporations, such as Low-profit Limited Liability Companies (L3Cs);

  • maximize the availability of federal, state, and local government information online, including records and meeting minutes, in text-searchable and tagged formats;

  • allow journalists to use excess federal and state computing capacity to conduct resource-intensive activities; and

  • develop electronic tools to facilitate reporting based on analysis of government computer data.
The proposals are a mix of the practical and the impossible. Some would be major changes in law and policies that apply to the media. Not all of them are feasible; some may even be unconstitutional.  And many of them could have consequences, intended or unintended, for non-traditional journalism online, and in areas beyond the media industry.

If the goal of the paper is provoke discussion, that is precisely what it has done: from condemnations that the agency is "protecting the old power structure of media" to warnings of the impending government takeover of the media.  A sampling:

If the FTC truly wanted to rethink journalism and its new opportunities and new value in our democracy, it would have written this document from the perspective of the people it is supposed to represent: the citizens, examining how we can benefit from news that is newly opened to the opportunity of collaboration and greater relevance. Instead, the document is written wholly from the perspective of the companies and institutions of the industry. —  Jeff Jarvis, FTC protects journalism’s past

[T]his FTC study is rated R for anyone who thinks the federal government, the object of copious news coverage itself, has no business deciding which sectors of the private media business survive and thrive through its support, subsidies and encouragement with things like tax incentives. Yet that's what this Obama administration paper is suggesting as another of the ex-community organizer's galactic reform plans.Andrew Malcolm, Obama's FTC plan to reinvent America's news media

As the FTC draft is structured currently, it appears to have been heavily influenced by the radical activist group Free Press and its founder Robert McChesney, the prolific neo-Marxist media scholar from the University of Illinois. -- Adam Thierer, FTC Draft Plan to "Save Journalism" Drawing Scrutiny; Raising Concern

Undergirding the responses to the FTC Discussion Draft is a false argument that government should not be involved in our media. Government has always and will always influence how our media system is shaped. The question is not “if,” it is “how.” When many of the smartest minds working on the future of journalism promote the notion that the government should just “Get off our lawn,” they take themselves (and many others) out of the debate, leaving it up to the corporate lobbyists in Washington DC to decide what the future of journalism will be. — Josh Stearns, Public Policy and Journalism Innovation

Plus, a Rasmussen Reports national telephone survey found that large majorities of those surveyed opposed the tax proposals.

So, the FTC's June 15 hearing is sure to be a spirited discussion on the future of media, both online and off, and may provoke a larger discussions — beyond the usual media and Internet pundits — about the future of American media, and the role of the media in American democracy. Such a debate, however acrimonious, may be a good thing: and is, of course, what the First Amendment is all about.


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