FTC’s Hearings on Journalism: Why?

by Dan Gillmor
December 3, 2009

As everyone knows, the nation’s scam artists, monopolists and
market-riggers have all gone into hibernation during the worst economic
crisis since the Great Depression. This has given the Federal Trade
Commission the breathing room it needs to intercede in an arena where
its role is, at best, unclear.

This week, the commission held a two-day workshop entitled How Will Journalism Survive the Internet Age? — the purpose of which is “to explore how the Internet has affected journalism.”

There’s been lots of blogging, Tweeting and journalizing about it.
Some people think it was a valuable exercise. I question that,
especially the FTC chairman’s announcement that the situation might
well call for government intervention.


The event came under the FTC’s Office of Policy Planning. Here’s its mission:

The Office of Policy Planning assists the
Commission to develop and implement long-range competition and consumer
protection policy initiatives and advises staff on cases raising new or
complex policy and legal issues.

One of the Office of Policy Planning’s primary roles involves
competition advocacy, submitting filings supporting competition
principles to state legislatures, regulatory boards, and officials;
state and federal courts; other federal agencies; and professional
organizations. The Office also organizes public workshops and issues
reports on cutting-edge competition and consumer protection topics,
addressing questions of substantive antitrust law, industry-specific
practices, and significant national and international policy debates.

In addition to the Office of Policy Planning, several offices
throughout the Commission, including the Bureau of Competition’s Office
of Policy and Coordination and the Policy Studies unit within the
Office of the General Counsel, also provide policy advice.

This has what to do with journalism, exactly?

Ah, we learn more in a Federal Register Notice
(also PDF-only, naturally). The notice observes, in a promising start,
that the Internet has created unparalleled possibilities.


The commission could have stopped there, and not bothered to hold
the workshop. It could have recognized that we’re in the early days of
a transition from one set of business models (most of which have not
been very competitive) to an emerging, hyper-competitive sphere.
There’s never been more reason for optimism than there is today, given
the massive amount of journalistic and business experimentation going
on all around us.

But the commission staff and many speakers found much to fret about,
spurred in large part by the incessant whining of the newspaper
industry in recent times. (Could it also have been influenced by the
fact that the FTC chairman is married
to a Washington Post opinion writer? No, this obviously had absolutely
no bearing on anything.) The commission has discovered that the
advertising model which once supported many kinds of journalism has
eroded. Quoting several economists, the workshop notice says “public
affairs reporting may indeed be particularly subject to market failure.”

Market failure? What about the market failure — which as far as I
can tell never got any attention from a succession of FTC people during
the past half-century — of the monopolies and oligopolies created by
media organizations during that period? The public affairs journalism
was, for the most part, a modest spinoff of the extortionate
advertising prices they charged when they had near-absolute market
power to charge anything they wished. Only when there’s real
competition does the FTC get interested.

The commission, inevitably, is asking for opinions on whether
federal taxpayers should subsidize journalism more directly than the
indirect subsidies of low postal rates for print; giveaways of publicly
owned airwaves (spectrum) to broadcasters; the odious “Newspaper
Preservation Act” granting partial antitrust immunity to community
newspapers, etc. (Believe it or not, meanwhile, the
commission is asking if Congress should give journalism-related
businesses even more antitrust immunity. Good grief.)

There’s only one subsidy that makes sense, only one that wouldn’t
put government meddling squarely into the practice of journalism, an
inevitable result of the direct subsidies being pushed by well-meaning
but misguided media thinkers. It’s not on the agenda, however.

As noted, taxpayer-assisted infrastructure — especially the postal system and low rates for sending publications — helped create the newspaper business, and enabled a lot of other commerce. Bring forward
that logic to high-speed Internet access for all Americans, and enable
the 21st Century communications infrastructure for all competitors.

As it is, we’re moving toward a market failure of frightening
proportions, as the telecom industry clamps down, or threatens to, on
people’s ability to use Internet connections as they see fit. We’re
moving toward a media business consolidation that would terrify make
any real champion of open markets: a cable-phone duopoly. Maybe the FTC
could poke its nose into the truly scary potential of the just-announced Comcast buyout of NBC Universal? That would actually be useful.

The Federal Communications Commission has jurisdiction over telecom,
and is looking at the issue. But when it comes to how journalism will
thrive in (not just survive) the Internet age, this should be high on
any list of competitive issues of interest to agencies that push for
competitive markets.

The word “broadband” was nowhere to be found in the FTC’s planning
document. Coming from an agency that says it wants to promote
competition, that spoke volumes.

(Cross-posted, with updates,from Mediactive.)

Tagged: broadband fcc ftc future of journalism public policy

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