Message From Michael 
June 23, 2010
THE FEDERAL TRADE COMMISSION AND JOURNALISM – A SPECIAL REPORT
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FEDERAL FACTOIDS FOMENT FURY: If the federal government devoted the same percentage of the Gross Domestic Product to press subsidies as it did in the 1840’s, it would have spent $30 Billion last year “to spawn journalism.” And if the federal government provided the same level of support to the Corporation for Public Broadcasting as the Canadian government provides to the Canadian Broadcasting Corporation, it would have spent $7.5 Billion, roughly 15 times the amount it actually did spend, which was $409 Million in 2009. Those are two of the factoids cited by the Federal Trade Commission staff in its draft discussion report on the future of journalism. Those factoids, along with the idea of a possible governmental role in journalism, have generated a fire storm from both the so-called ‘far right’ and the ‘far left.’ The commission staff goes to great pains to explain that the report is only a summary of the various ideas and recommendations it garnered from witnesses and experts, but with a subtitle of “potential policy recommendations to support a reinvention of journalism,” there is a somewhat understandable question mark lingering in many observers’ minds about how far the report goes. The report notes that “the federal government has supported journalism since its founding” either directly or indirectly. The federal Post Office Act of 1792, for example, charged newspapers less for mailings. That subsidy though has dropped over the years, from covering 75% of mailings ($4 Billion) to 25% of mailings ($600 Million). It should be noted here that the report makes no bones about the fact that it focuses on newspapers in this report because, the authors say, “newspapers provided the largest quantity of original news to consumers over any given period of time.”
Proof of the power of the new media/ new journalism world is that the FTC spent almost as much time defending the report as merely a starting point for discussion, as they did actually discussing it in their latest and last workshop. Proof of the paucity of the new media/ new journalism world is that a search of the various media websites and blogs generated a lot of attacks on the draft report but very little actual reporting on the draft report.
Although it isn’t laid out this way, you could divide the report into four major sections: taxes or fees that could be imposed to support journalistic efforts; taxes or fees that could be reduced to support journalist efforts; governmental initiatives that could be started to support journalistic efforts; governmental initiatives that could be stopped in order to support journalistic efforts. Then add to those four areas, technological steps that could be taken to make sure the “creative destruction” wrought by new media efforts are more ‘creative’ and less ‘destructive.’
THE TAXMAN COMETH: One of the proposals floated is a national fund for local news, using money the Federal Communication Commission already collects from telecom users, television and radio broadcast licenses and which is already being used to underwrite telecom services in rural areas and for wiring schools and libraries. The money would be administered through a competitive application process to state “local news fund councils.” Going a step further, the report talks about a “Citizenship Media Fund”, supported by taxes on broadcast spectrum, consumer electronics, a spectrum auction tax, advertising sales taxes and an ISP-cell phone tax. It was the uproar over taxes that prompted FTC Chairman Jon Leibowitz to declare that any idea of taxes is “a non-starter.” Alternatively the report talks about “Citizenship News Vouchers”… sort of like the Presidential campaign contribution idea… which “would allow every American tax payer to allocate some amount of government funds to the non-profit media organization of their choice.” Foundations could ‘seed’ such news ventures and then the ‘citizenship news vouchers’ system would take over.
Or, going a step further in a different direction, the report raises the idea of providing a tax credit to media businesses “for every journalist they employ.” In the vein of providing incentives, the report cites suggestions that the Small Business Administration could provide loan support for non-profit news start-ups. Right now, the SBA focuses on for profit businesses. And, as noted earlier, there is the issue of increasing postal subsidies. One of those little loop-holes you never think about, the report calls for the repeal of the 60-year-old law which prohibits the domestic re-broadcast of the government funded ($700 Million) international news services such as Voice of
PARASITIC AGGREGATORS: That is one of the descriptions used in the report for the news aggregators who rely on material provided by various news organizations. The report raises the question of how to protect the Intellectual Property rights of the originating news organizations. The report goes into great length to discuss variations of the “hot news” concept. Copyright laws protect how facts are articulated but not the facts themselves. Because of that, some groups take material created by others and re-write or re-work it for their own use, thus avoiding copyright infringements. But the originating news organization made a substantial investment to get that news to begin with. The ‘hot news’ concept provides copyright protections for such reports so as to protect the original investment. The problem, according to the FTC report, are the so-called “second round of content creators” who may take an original story and add to it through additional reporting. Regardless, the FTC report raises the idea of a federal ‘hot news’ law. The report also raises the idea of a content licensing fee. They say either there could be an industry-wide licensing arrangement or the aggregating group or ISP’s would pay a fee for every account they have. The report does note that newspapers can code their content to stop search engines from copying it. And, of course, the report talks about erecting pay walls.
WE WANT YOU AS A NEW RECRUIT: One of the more unusual ‘recommendations’ of the many unusual recommendations is the idea of creating a ‘journalism division’ of the U.S.’s AmeriCorps which is a federally-funded program recruiting volunteers to help with public service projects around the country. In a similar vein, the report cited the idea of providing grants to universities to do investigative journalism with the note that “if the nation’s 200,000 journalism and mass communication students spent 10% of their time doing actual journalism, that would more than make up for all the traditional media jobs that have been lost over the past 10 years.”
THE THREE-LEGGED RACE: One of the dominant themes of the report (or so it seems to me) is some variation of the idea of a public-private partnership involving media businesses, the Corporation for Public Broadcasting and non-profits or NGO-type organizations. The report notes several calls for additional funding for CPB for local news projects. J-Lab’s Schaffer even goes so far as to suggest re-casting and re-naming the CPB the Corporation for Public Media, and having it collaborate with local news sites through content sharing and other arrangements but with more accountability to insure ‘civic participation.’ The report looks at the idea of ‘blending’ for-profit businesses with some defined form of social purposes. It looks at the idea of the Internal Revenue Service granting 501 (c) (3), tax exempt, status for some form of news reporting. Alternatively it looks at three different forms of incorporation. In
LAST BUT NOT LEAST: The report looks at the technology of the Internet that would make information gathering from public sources easier and more manageable. For example, it cites the “semantic web” technologies that make info readable by machines, the use of XBRL which is extensible business reporting language, metadata tags that would improve accessibility, and the need for a commonly agreed upon taxonomy for the world wide web and Internet use by governments as well as businesses.
DISCLAIMER: As usual, I have to put in a disclaimer that this is a 15-hundred word summary of a 50-plus page report. And I have to add a compliment to the FTC staffers who put this together. It is an interesting and comprehensive overview of the various alternatives. You can find the full report by going to the FTC site and searching for journalism, or go to this link -- http://www.ftc.gov/opp/workshops/news/jun15/docs/new-staff-discussion.pdf .
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