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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