FTC to “reinvent” journalism

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.

Blowback