FTC to “reinvent” journalism

posted at 12:15 pm on June 2, 2010 by Ed Morrissey

The nation needs a strong, independent press, the FTC argues, and so they want to find ways for government to “reinvent” journalism.  If that sounds vaguely Orwellian to you, the actual language in the Federal Trade Commission’s discussion-points memo should have hairs standing on the backs of necks across the nation.  It shows a wildly laughable rationale for government intervention that would prop up the failing newspaper model in a manner that would put the entire industry at the mercy of the federal bureaucracy it’s supposed to keep in check.

The paper notes “experimentation” of media outlets on the Internet, a rather strange term considering that most media outlets have used the Internet for years.  Major newspapers have been on line for well over a decade.  After framing that as “experimentation,” the FTC then argues that it won’t work.  Not only that, it then offers a very strange definition of “subsidy” in order to provide cover for a government intervention:

There are reasons for concern that experimentation may not produce a robust and sustainable business model for commercial journalism. History in the United States shows that readers of the news have never paid anywhere close to the full cost of providing the news. Rather, journalism always has been subsidized to a large extent by, for example, the federal government, political parties, or advertising.

Huh?  Advertising isn’t a subsidy for newspapers, any more than it is a subsidy for television or radio stations, magazines of all kinds, and so on.  It’s an exchange of services for mutual benefit.  Advertisers promote their products and services by presenting them to the readership of a newspaper/website/broadcast station, paying the owners of that medium for the freight.  It’s akin to calling shipping costs a subsidy to FedEx or UPS for the vital interest of having trucks on highways.  It’s the kind of faulty anthropology an alien might make if they didn’t understand the purposes of various human activities.

Andrew Malcolm can’t quite believe his eyes:

True, there have been government subsidies over the decades in the form of below-cost postal rates and printing contracts. But this 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.

Cut-rate postal services and federal printing contracts hardly amount to subsidizing the newspaper industry to a “large extent” or any extent.  Most newspapers don’t get mailed, first and foremost; they get delivered by employees.  Federal printing contracts should be competitively assigned anyway, and newspapers usually have an economy of scale that makes the award of those contract sensible.  Just as with advertising, that’s a rational business decision, not some kind of subsidy or gift.  Both sides get goods and/or services in a fair exchange, whereas with subsidies, one side gets compensation while the other does not.

The next two paragraphs are just as Orwellian:

Economics provides insight into why this has been the case. The news is a “public good” in economic terms. That is, it is non-rivalrous (one person’s consumption of the news does not preclude another person’s consumption of the same news) and non-excludable (once the news producer supplies anyone, it cannot exclude anyone). Because free riding is usually easy in these circumstances, it is often difficult to ensure that producers of public goods are appropriately compensated.

In addition, the news can produce benefits that spread much beyond their readers. For example, investigative reporting that results in a staff shakeup in a local hospital can produce better health care for patients in the future, but the news organization that produced that story will receive, at best, limited compensation (perhaps through increased readership) related to having spurred those benefits.

Declaring news a “public good” is nothing more than a rhetorical cover for demanding government oversight of it.  “Free riding” is apparently defined as linking to and quoting news from a media source.  This is an absurd issue for federal intervention, as a remedy for those media outlets is readily available: membership-only access.  It also discounts the fact that the eeeeeeeeeevil aggregators, including yours truly, direct traffic to those sites through links, arguably boosting the bottom lines of the media outlets, especially since readers are usually inclined to double-check the assumptions made by the aggregators.  There is a reason that newspapers send out tip e-mails on a daily basis to bloggers, and it’s not because they are unhappy about bloggers “free-riding” their output.

Beyond that, the FTC apparently also wants to set a standard of what is “appropriate” compensation.  Who’s to say what is appropriate?  Shouldn’t the market determine the compensation?  Does the government fix prices on computers, televisions, and radios, by which consumers access other news media? This looks like an attack on blogs — and an attempt to turn back the clock to 1993 in terms of the voice that news consumers have in news delivery.

Mark Tapscott warns that a government reinvention of journalism will mean a journalism much less likely to be independent:

[W]hat they cannot deny is what is clearly written in the FTC document and what it reveals about the intention behind the initiative, which is to transform the news industry from an information product collected by private individuals and entrepreneurs as a service to private buyers, to a government-regulated public utility providing a “public good,” as defined and regulated by government.

The authors hide this dangerous intention behind carefully worded expressions of concern for preserving “quality journalism” and “addressing emerging gaps in reporting,” and they rationalize their proposed approach of massive government intervention in the news process as simply an extension of what government has always done via postal subsidies, tax breaks, and so forth. …

Better to explain yet again that the original intention of the Founders with respect to the media – “Congress shall make no law respecting … the freedom of the press” – is the key to saving independent journalism.

Then we must remind them that the adversarial relationship that is supposed to exist between journalists and public officials must apply no matter who those public officials might be or what political party or ideological school of thought they represent.

Elected officials’ first thought is always about re-election, while career government workers’ is job security. A journalist’s first thought is supposed to be getting the facts.

To that end, we’re supposed to be adversaries, not co-conspirators, partners, favored “stakeholders,” or beneficiaries. That’s why the Constitution made us independent.

This is not a document meant to salvage an independent press.  It’s a road map for government control over the news.

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If there is going to be a license needed for “journalists,” is there going to be a quota for them, like for fishing and hunting? Anyone know when the season starts?

MayorDaley on June 2, 2010 at 2:09 PM

Nothing to see here, move along. Just more of that HOPE and CHANGE you were promised. Don’t like it? SHUT UP!

GarandFan on June 2, 2010 at 2:09 PM

It will take us decades to overcome the damage done by this Marxist regime.
d1carter on June 2, 2010 at 1:59 PM

It will NEVER be fixed if we go about it the way Republican politicians keep talking about: with discretionary spending “cuts”, which really means slower growth.

Collectivism is a cancer, and the tumor is now larger than the host. This can’t be fixed with a scalpel; it’s going to take a hacksaw.

logis on June 2, 2010 at 2:14 PM

What this is basically is failing liberal publications and broadcast outlets using their liberal mindset to believe they can get something for nothing — i.e. that the government will subsidize them and save their jobs while asking for nothing in return.

The unspoken quid pro quo is that since liberal journalists believe in big government, they won’t have to worry about a federal government run by liberals ever asking them for anything, and if conservatives are in charge in Washington, they’ll simply start throwing out the same types of cries of oppression that PBS and the National Endowment for the Arts do whenever their federal funding streams are threatened, and feel safe that Democrats and scared swing state Republicans will bail them out.

It never even enters their mind that they would face a situation where a liberal president or a liberal Congress might threaten their funding stream unless they report the news the way they’re told to, even though you’ve got a White House right now that can’t even play nice with the current White House press corps. The only good thing is the closer we get to looking like the Republicans are going to regain control of Congress, the less the failing liberal media concerns are going to be enamored of having their work subject to future federal control.

jon1979 on June 2, 2010 at 2:16 PM

The urge to save humanity(journalism,GoreBull warming,etc, etc) is almost always a false front for the urge to rule.

H.L. Mencken

midlander on June 2, 2010 at 2:27 PM

That is, it is non-rivalrous (one person’s consumption of the news does not preclude another person’s consumption of the same news) and non-excludable (once the news producer supplies anyone, it cannot exclude anyone). Because free riding is usually easy in these circumstances, it is often difficult to ensure that producers of public goods are appropriately compensated.

You could say the same thing about the music, movie and book industries. Are they next on the list?

RadClown on June 2, 2010 at 2:40 PM

Unfund the FTC quickly, along with numerous other government and internatinal organizations.

burt on June 2, 2010 at 2:41 PM

“Shut up!” He explained, became the rationale of the land.

theguardianii on June 2, 2010 at 2:42 PM

So if this happens, I see blog hosting moving overseas, just like all of the businesses and rich people that get tired of Obama’s crap.

cannonball on June 2, 2010 at 2:44 PM

MassVictim on June 2, 2010 at 1:05 PM

You mean you don’t think journalists should be licensed just like doctors, lawyers, dentists, plumbers etc.

chemman on June 2, 2010 at 1:08 PM

Exactly. And I am not so sure about the rest on your list either.

Dasher on June 2, 2010 at 2:49 PM

So if this happens, I see blog hosting moving overseas, just like all of the businesses and rich people that get tired of Obama’s crap.

cannonball on June 2, 2010 at 2:44 PM

Then like China and Iran external websites will be blocked to “protect” the people from certain news.

Dasher on June 2, 2010 at 2:50 PM

Because free riding is usually easy in these circumstances, it is often difficult to ensure that producers of public goods are appropriately compensated.

The “free riding” discussion, for those of us who have a version of McConnell’s Economics college textbooks, occurs smack dab in the middle of the “Social Goods and Services” discussion which follows from a discussion of subsidies. Cute, eh?
McConnell posits the classic example of “free riding” as government construction of a lighthouse since it is impossible to keep non-subscribers from using the light just as subscribers would do. It is a publicly consumed good which is indivisible and having spillover benefits.

ExpressoBold on June 2, 2010 at 2:57 PM

“If there is an ‘overabundance’ of an idea in the absence of direct governmental action—which there well might be when compared with some ideal state of public debate—then action disfavoring that idea might ‘unskew,’ rather than skew, public discourse,” –Elena Kagan.

Akzed on June 2, 2010 at 3:09 PM

Words used by the government conveyed in a parent to child like way, in order to dupe the uneducated masses that they only have our best interests at heart.

Lying a-holes. We’re not buying it dunder heads. Try again.

capejasmine on June 2, 2010 at 3:09 PM

This is getting wierd. It used to be that the Onion parodies were so far out they were funny. Then the truth started getting so wierd, we weren’t sure what was a parody.

Normally I could come on here and make some sarcastic remark about what’s next, redefining what is a student, what is a teacher? Except, that might not be sarcasm anymore, it might be the real future.

This government is going too far, I think it is time for plain old anger, no more wit, sarcasm, or parody. This is getting scary.

If you can redefine what a journalist is, why can’t you redefine what a voter is … for the public good of course?

odannyboy on June 2, 2010 at 3:27 PM

From the memo:

Journalism is moving through a significant transition in which business models are crumbling, innovative new forms of journalism are emerging, and consumer news habits are changing rapidly.

Yes, that is what we call Creative Destruction. The automobile did away with most blacksmiths and stables, the computer made typewriters obsolete and the internet is doing the same to the dinosaur media.

The government’s real concern is that journalism’s barriers to entry have fallen and their sycophants are losing in the free market of ideas and information.

Rather, through this document, 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 free choices of individuals in the market will take care of that, thank you. The government has no moral or constitutional authority to meddle in the free dissemination of information.

RadClown on June 2, 2010 at 3:55 PM

Line in the sand.

Call me paranoid, but I’m betting if the USSC rules against Øbama on free speech, media regulation, or Øbamacare, he’ll try to increase the number of Justices. This is a fight for the generations, collectivist socialist statism versus classical Western liberalism. And the “progressives” know it.

petefrt on June 2, 2010 at 4:08 PM

Good luck with that FTC. This is why SCOTUS is so important. Did you see Sonya’s dissent over Miranda? She thinks that police ought to be precognitive and presumptive towards suspects lest they be trampling all over their Miranda Rights. How contrived can you get? She’s a smart one, isn’t she?

Sultry Beauty on June 2, 2010 at 4:36 PM

On the other hand, acting as if our professional journalists are at the moment independent – and not subject to the interests of the corporations that own them – is ridiculous. ernesto on June 2, 2010 at 12:23 PM

So the corporations that own the newspapers control the newspapers? Is that what you’re saying? How profound.

I guess what we need, Che, is for the newspapers to be owned by a People’s Collective for the Disemination of Truth, rather than by corporations made up of stockholders, because stockholders aren’t people, like The People are people.

Akzed on June 2, 2010 at 4:39 PM

Does the government fix prices on computers, televisions, and radios, by which consumers access other news media?

Just a matter of time…

ronsfi on June 2, 2010 at 4:49 PM

Federalization of the hot news doctrine would entail difficult lindrawing between proprietary facts and those in the public domain.

Hey, I know what these guys are. I’d tell you too, but it’s a “proprietary fact”… if I tell you, I face fines and possibly jail time.

Just like you would for telling the truth in any free open society.

gekkobear on June 2, 2010 at 5:18 PM

Akzed on June 2, 2010 at 4:39 PM

You know it. The left believes that only the government can reflect the will of the people. And care for the people. And protect the people…

IlikedAUH2O on June 2, 2010 at 6:05 PM

F*cking communist bastards. Regime change 2010, 2012 – our survival depends on it.

Fishoutofwater on June 2, 2010 at 6:27 PM

Mr Tapscott,

You are perpetuating an egregious error. The First Amendment has nothing to say about journalists and the media as a special case. The use of the word “press” to mean journalists and the media taken as a whole did not even come about until the 1930s.

In the late 18th century, “the press” referred only to the machine in a printer’s shop. “Freedom of the press” refers to the right each of us has to express ourselves in print as well as in speech.

Chaz on June 2, 2010 at 6:28 PM

If the government takes control they’ll be better able to keep us apprised of the thousands of prisoners from the Eurasian front that the armies of Oceania have captured, or how increases in productivity will be reflected in a larger beet ration for all party members. Doubleplusgood!

tpitman on June 2, 2010 at 6:30 PM

If the government takes control they’ll be better able to keep us apprised… they’d best keep control.
tpitman on June 2, 2010 at 6:30 PM


rogerb on June 2, 2010 at 7:08 PM

Doesn’t it just come down to “It’s none of their damn business”?

Blaise on June 2, 2010 at 7:36 PM

Typical Communists…*yaaaawn*

There is no such thing as a “free press”. One has to have the capital to buy printing presses, ink, paper, hire workers and so on, therefore media is tied to the Bourgeoisie and their interests as they are the only ones who can finance the inception of such concerns and maintain them.

Therefore the Masses are excluded from engaging in true free speech.

The commercial press is beholden to those companies and individuals that supply the revenue for advertising. The cost that the consumer pays is subsidized by the Capitalists through advertising. Maintaining the Press should be a collective effort subsidized by the State through its enlightened/efficient management of resources which in all cases are the most equitable distribution of available resources.

The State is the People. Only the State can be the guarantor of human rights and freedoms. Of course, the State has to be run by the right people for that to happen-the enlightened intelligentsia on behalf of the Worker.

So, through a State-run Press the Worker has a voice protected by the Party on behalf of the People.

Dr. ZhivBlago on June 2, 2010 at 8:47 PM

“A national Fund for Local News should be created with money the Federal Communications Commission now collects from or could impose on telecom users, television and radio broadcast licensees, or Internet service providers and which would be administered in open competition through state Local News Fund Councils.”

Comrades, WTF is a Local News Fund Council? I think I’d prefer a czar to a commitee.

Reality Check on June 2, 2010 at 9:10 PM

When did hugo chavez become POTUS?

jdkchem on June 2, 2010 at 9:29 PM

I’ve not seen anything this horrifying in a long, long time. It’s worth reading the whole report. Good God.

longbeachpirate on June 2, 2010 at 9:36 PM

Smells like Pledge Week at NPR.

DarthBrooks on June 2, 2010 at 10:31 PM

It is not government’s concern whether journalists or newspapers deliver ‘quality’ product, it is the media’s concern and/or their consumers, i.e. it is the marketplace that determines such allocations of quality. Hence numerous socialist papers have died over the course of the past 100 years. A fortuitous circumstance. If the FTC continues on this anti american unconstitutional crusade, the republicans will have no choice, on returning to power, but to defund it.

eaglewingz08 on June 2, 2010 at 10:37 PM

Absolutely unconstitutional…BoBo had best not push this scheme

JIMV on June 2, 2010 at 11:26 PM

Must be some of Obama’s moderate political appointees at work.

Hard Right on June 3, 2010 at 12:12 AM

a government-regulated public utility providing a “public good,” as defined and regulated by government.

Who would file those pesky Freedom of Information Acts, you know, the ones journalist file, for the ‘public good’?

For example, investigative reporting that results in a staff shakeup in a local hospital at ACORN can produce better health care for patients in the future can save taxpayers a ton of money, but the news organization that produced that story will receive, at best, limited compensation (perhaps through increased readership) related to having spurred those benefits Andrew Breitbart’s journalism staff is doing just fine without government regulation....

TN Mom on June 3, 2010 at 12:47 AM

In the future they wont say “How Orwellian.”
The will say “How Barackian.”

Slowburn on June 3, 2010 at 4:57 AM

There ain’t no comparison other than OPPOSITE EXAMPLES between Brewer and Connecticut Attorney General Richard Blumenthal’s embellishment of his war record which IS stolen valor.

appear to be a more sympathetic figure.

–Jennifer Johnson, AZ Democrat Party

Gov. Jan Brewer‘s father served our country working in a Nevada munitions factory throughout WWII and succumbed to lung cancer resulting from the hazardous chemicals in the air of that work environment, and she has INITIALLY told the public that account on many occasions.

Only a step up from working in mines, SW factories during WWII were not concerned with employee safety measures, only with mass production. If employees were endangered, owners were concerned about two things, contracts and profits. Even effective products were secondary. Employees were supposed to be grateful that they had a job, given the Great Depression. For example, look back at the building of the magnificent Hoover Dam, and the death toll of white American laborers who had to make the initial tunnel to divert the Colorado. Pride in work, but not appreciated by the overlords with the contracts. (Substitute current union bosses for the old guard overlords–a second layer of horrible corruption. No wonder the public swallowed DPS so easily, another damned bureaucratic layer to “cure” nothing.)

People should note that even the Merchant Marines who suffered the HIGHEST mortality rate during WWII have yet to be publicly recognized for their honor and sacrifice, particularly by the Joint Chiefs of Staff and Congress.

maverick muse on June 3, 2010 at 8:06 AM

Dr. ZhivBlago on June 2, 2010 at 8:47 PM

This is such drivel that no response is needed.

riverrat10k on June 3, 2010 at 8:20 AM

I just re-read Fahrenheit 451 with my 14 year old and it scared me how much of that book seemed plausible now that didn’t when I read it 5 years ago with my oldest… censorship being upmost in my mind…

momof2 on June 3, 2010 at 8:35 AM

Dr. ZhivBlago on June 2, 2010 at 8:47 PM

Forgot the sarc tag.

Akzed on June 3, 2010 at 9:01 AM

So when does the Ministry of Truth start hiring? Another 1,000,000 jobs created, yippee.

bitsy on June 3, 2010 at 11:10 AM

I was being somewhat sarcastic-what I wrote above is how these people think.

We have allowed the PTB to chip away at our freedoms…partly because of conservative love of law and order, partly because in our minds getting ahead and making money is the American Way…they’ve been chipping away at our cherished Republic and thus our freedoms for decades now and they’re moving into fast forward with the Marxists in the lead. They’re using our attitudes against us-we’re handcuffing ourselves with our own beliefs. As for the Libtards, they, of course, are down with the Leftist agenda anyway.

We still want to sit around and think it’s all going to be OK…that the “system” will right itself. Well, brothers and sisters, the “system” is being changed, and it’s being changed by and for the enemies of the Republic.

We’re being squeezed (garroted is more like it) by the Communists within and those without (namely Russia and China). We think we can win by simply being right and knowing that these Socialist systems always fail. These people are at war with us. We’re being maneuvered (“nudged”) into a position where we can’t do anything about it.

Dr. ZhivBlago on June 3, 2010 at 11:13 AM

As Ronaldus Maximus used to say, if we lose our freedom here, there’s no where to escape to.

If there were, I’d have contingency travel plans.

petefrt on June 3, 2010 at 11:47 AM

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