Is rescuing the news business the government’s business?

As a fan of conspiracies great and small, I was all aflutter over word that yet another power grab was being cooked up by that foreign-born Communist Nazi in the White House. This one purportedly involves a scheme hatched within the shadowy Federal Trade Commission to engineer what a Los Angeles Times online columnist calls a “major” plan to “reinvent America’s news media.”

Of course, conspirators aren’t about to own up to their real aims. Instead the plot is described, innocently enough, as an “FTC Staff Discussion Draft,” it’s titled “Potential Policy Recommendations,” and its opening says “it is solely for purposes of discussion.” But then, we all know conspiracies deliberately use drab bureaucratic language to clothe monumentally subversive stuff.

“We’ll end up with Pravda and Izvestia like they were under Stalin,” one patriotic blogger reported. Others saw similarities between Barack Obama and Hugo Chavez, foresaw the media becoming “Obama’s propaganda ministry,” detected “another dangerous example of government takeover of the private sector,” complained that “Washington is run amuck [sic] with socialists and communists,” and so on.

I read those denunciations and, naturally, I was intrigued. All that treason from as insipid a place as the Federal Trade Commission? For an in-house discussion paper from an independent agency that has never done much media regulation to provoke that kind of outrage, it must have something big to say.

And it does. But what it actually says isn’t what its critics imagine—nor, I suspect, what the agency had hoped to say when it launched its staff study and public hearings into the troubled state of the news media a year ago. What a careful read of the 35-page paper really suggests is the farthest thing from a state takeover; it’s actually a reminder of the limits of government.

For its unintended message is that there may simply not be a meaningful role for public policy in nursing the news business through its current travails.

The paper opens with a familiar catalogue of the woes affecting newspapers—declining print circulation, plummeting advertising revenues, shrinking news staffs—and offers a rundown of a range of policies that various people have suggested might help the news media without violating standards of fairness or impairing their editorial independence.

Is there a way, for instance, to redraw copyright protections so that news outfits will share the ad revenues that search engines derive from linking to their stories? Might lawmakers create a new nonprofit corporate vehicle that would have full range to express opinions editorially, which today’s nonprofits may not? Should antitrust law prohibit news organizations from collaborating on an industrywide consumer payment plan? What about expanded government support, either through tax credits for employing journalists or new Corporation for Public Broadcasting-style funds for local reporting? Should there be new taxes—either on consumer electronics, advertising, or spectrum auctions—to fund this?

Decent enough questions, and the FTC’s presentation of pro’s and con’s is reasonably evenhanded. But the big problem, beyond the political futility of trying to get any of the proposals enacted, is that even if they were, it wouldn’t alter the core reality:

No imaginable combination of public policies will restore the ad revenues that subsidized the news business for the past century and a half, now that advertisers have incomparably cheaper ways to reach their markets. That bird has flown.

Too, as Jeff Jarvis and others pointed out, the FTC’s focus on newspapers doesn’t help. That focus is both understandable and regrettable—understandable, because even with the emergence of stand-alone news and commentary sites, metro papers and their Web operations still do the bulk of original reporting; regrettable, because that focus made the entire exercise seem like a newspaper bailout plan instead of a look at the state of journalism.

With unpaid journalistic irregulars arising as a dynamic part of the new news business, shouldn’t policy makers ask how, for instance, tax laws might be altered to give them a break? If their work is having mounting importance, maybe they should get some of the tax breaks—say write-offs on their outlays on digital tools—that legacy news media have long had.

Journalism is a professional practice with a unique civic value, and it’s fine that policy makers should worry that its current weakness may do real harm to our system of politics and governance, enabling corruption to thrive and leaving the public uninformed.

But what the FTC paper reminds us, ironically, is that our system isn’t really built on the notion that there exists a wise public policy for every serious public problem. The solutions may lie in ingenuity and enterprise originating elsewhere.

Edward Wasserman is the John S. and James L. Knight Foundation professor of journalism ethics at Washington and Lee University in Lexington, Va. This column was originally distributed through the McClatchy-Tribune News Service and published on June 20, 2010 on Ed Wasserman’s blog.

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