Last week my wife and I bought a used car, the better to ferry our children between sports events. For this we went to the websites of nearby dealers, researched different cars online and, after settling on one vehicle, quickly called up its history--inspections it had passed, the fender bender in 2007, etc.
Our online investigation helped us make an educated decision that fit our family budget. It was just another example of how the explosion of information online has transformed the lives of everyone for the better.
Now comes the latest Federal Trade Commission "discussion draft paper" suggesting that these advances must be hobbled, taxed and maybe even reversed--because they hurt the newspaper industry. Dead-tree media's salvation, it seems, lies in hobbling social media and making search engines as user-unfriendly as possible.
Oh, and newspapers will need one more thing: government subsidies. That's why we need the tax hikes--especially on Internet and 3G phone users.
Turns out, the way we bought our car is killing newspapers. As James Fallows observes in this month's Atlantic, newspapers never made money on hard news. He quotes Google's chief economist Hal Varian:
"Serious reporting, say from Afghanistan, has simply never paid its way. What paid for newspapers were the automotive sections, real-estate, home-and-garden, travel, or technology, where advertisers could target their ads."
The Internet, Fallows concludes,
"has been one giant system for stripping away such cross-subsidies. Why look to the newspaper real-estate listings when you can get more up-to-date, searchable info on Zillow--or better travel deals on Orbitz, or a broader range of movie showtimes on Yahoo? Google has been the most powerful unbundling agent of all. It lets users find the one article they are looking for, rather than making them buy the entire paper that paid the reporter. It lets advertisers reach the one customer who is searching for their product, rather than making them advertise to an entire class of readers."
The FTC finds this pernicious. It proposes more than a dozen remedies, several of them silly, some outright dangerous.
Among the latter: a proposal to extend the Copyright Act to make facts proprietary. That's right, a paper would own the facts it uncovered, not just the way it phrases them. Poor Daniel Patrick Moynihan, who once told another senator, "Sir, you have the right to your opinions, but not to your own facts." The gentleman from New York must be rolling in his grave.
Why make facts proprietary? The FTC paper notes that "the copyright act allows parasitic aggregators to 'free ride' on others' substantial journalistic investments, by protecting only expression and not the underlying facts, which are often gathered at great expense."
The silly proposals include these jewels:
• Establish a "journalism" division of AmeriCorps "to ensure that young people who love journalism will stay in the field."
• Increase funding for PBS and NPR "to build and maintain strong newsrooms at the state and local levels."
• Establish a National Fund for Local News, financed by current or new fees on "telecom users, television and radio broadcast licensees, or Internet service providers"--all to be administered through state Local News Fund Councils. (Ah, new local bureaucracies with taxing authority--what could possibly go wrong?)
• Give news organizations a tax credit for every journalist they employ. This could help pay their salaries.
Do you sense a theme here? Save "responsible" journalism by having government subsidize it. What better way to assure fierce journalistic independence and watchdog vigilance? The FTC rather spreads itself on revenue-raising proposals:
• Small Business Administration-insured loans for new nonprofit journalism organizations.
• Higher postal subsidies for newspapers and periodicals.
• A broadcast spectrum tax (call it the "Tax on Rush") "which should result in a fund of between $3 and $6 billion."
• A tax on consumer electronics (dubbed "the iPad Tax" by the New York Post) worth "approximately $4 billion annually."
• A spectrum auction tax, "with the proceeds going to the public-media fund."
• Advertising taxes, including a 2 percent sales tax on ads that would generate "$5 to $6 billion annually."
• An ISP-cell phone tax, which at "3 percent on the monthly fees would generate $6 billion annually."
You get the picture: Soak a burgeoning and vital business to keep a dying one on life-support.
The FTC is making several tragic mistakes. The first is to confuse the delivery method with the goods delivered. To use the oft-repeated analogy, they assume the horse and buggy is essential to providing transportation.
The FTC says
"newspapers have not yet found a new, sustainable business model, and there is reason for concern that such a business model may not emerge."Here, they confuse journalism with newspapers, and an informed public with newspaper jobs.
What needs to be saved is not newspapers but content. The Internet (which we seem to forget, is all of about two decades old) has not been good yet at creating a successful business model for content creation.
But companies such as Google, which realize that they depend on content, are busy coming up with 21st century ways to create new models--rather than using the state's power of taxation to keep a 17th century industry on life support.
As Varian told Fallows in the Atlantic piece:
"If you were starting from scratch, you could never possibly justify this business model. Grow trees--then grind them up, and truck big rolls of paper down from Canada? Then run them through enormously expensive machinery, hand-deliver them overnight to thousands of doorsteps, and leave more on newsstands, where the surplus is out of date immediately and must be thrown away? Who would say that made sense?"
Why does the FTC want to do any of this? I am not a mind reader, but the FTC is an "independent" agency run by people appointed by the Obama Administration, which been antagonistic to an Internet it cannot control and nostalgic for the good old days when the news was controlled by a handful of mostly liberal newsmen.
The FTC is merely suggesting these proposals. It adds, "we welcome additional proposals, which can be submitted" here. I suggest you write to them.
Mr. Gonzalez, a former journalist, is Vice President of Communications at The Heritage Foundation.
Follow Michael Gonzalez on Twitter: www.twitter.com/@Gundisalvus
I retired from the NYS Thruway Authority at age 49. I am 52 now and a democrat. Since retiring, I have ascended to President of my gated homeowners association in SimiValley.
I see the ravishes of capitalism/greed on my daily tour of my neighborhood on my electric golf cart.
Employees of Google do not comply with garage door opening tolerances, nor are they picking up pet waste using the recommended approaches - because they work too hard. We need to unionize and make Google, a green collar workforce!.
I retired from a union. I am a living testament to the fact that unions are good Look at the wages of GM/Ford/Chrysler and compare them to the Japanese! They are almost 2x higher in Detroit! As progressives/democrats we should be proud of what we have accomplished - I still keep my Kerry/Edwards bumper sticker on my Subaru.
Let's start another one of our tar and feather campaigns against those against the FCC! The FCC should be monitoring the Internet as well as Fox news and promoting "The Administrations" agenda.
Look at the financial crisis - Fannie and Freddie had nothing to do with it.
It's all Haliburton. Support our transparent government - it knows best for YOU!
I am a democrat and I know better than any of you and all of your people!
HP - thanks for supporting this author. This is real news. I realize it doesn't support "The Administration", but you are showing courage for presenting the truth.
That said, it should be noted that our news media and telecom industries do need government attention, if only to ensure current negative trends don't get worse.
Americans are not better informed than those in other countries; not by our mainstream media anyway. We get a carefully sanitized menu of stories each day. This menu usually plays up the so-called war on terror while ignoring U.S. butchery of civilians -- it happened again today when yet another such story was ignored -- and includes lots of political yammering, assorted trivia and celebrity gossip.
And that's about it. Our ridiculously wasteful defense spending is ignored. The superior economies and lifestyles now evident in parts of Europe and Asia are never mentioned. Instead, we get non-stop oil spill, war on terror and trivia.
This is market driven, of course. The corporations that pump out this swill don't want to risk turning off too many consumers, so blandness and knee-jerk conservative bromides rule the airwaves. The FCC needs to slap tough new limits on radio and TV ownership by corporations and bring back the Fairness Doctrine, then police it to ensure that data presented as facts really are facts. It worked well enough in the 1960s and 70s, and Americans were much better informed. Meanwhile, there's one thing I agree with Gonzalez about: Hands off the internet.
fanned
The slide rule factories would still be in business, and all those employees wouldn't have had to go on unemployment.
No, this isn't now provided by the private sector, which has consolidated to the point where a handful of media giants have squeezed out all competition. (That's also true in many other industries -- the "free market" no longer exists.) So there is indeed a role for a public-funded news service. It's just that our government -- our society -- just isn't capable of sustaining anything so sensible or civilized.
In media or any other sector, apparently.
This is MAJOR stuff and should be treated as such!!!
Throwing government into the mix would be the kiss of death for any truly independent journalism.
This is a HUGELY DANGEROUS idea!
If it ever passed (which it WILL NOT), we could seriously kiss any remaining democracy we still have GOODBYE.
This toxic idea absolutely must DIE before it sees the light of day!!!
"The Xinhua News Agency (simplified Chinese: æ–°åŽé€šè®¯ç¤¾; traditional Chinese: æ–°è¯é€šè¨Šç¤¾; pinyin: XÄ«nhuá tÅngxùnshè) is the official press agency of the government of the People's Republic of China (PRC) and the biggest center for collecting information and press conferences in the PRC. It is one of the two news agencies in the PRC, the other being the China News Service.
------> Xinhua is an institution of the State Council of China. Xinhua REPORTS DIRECTLY to the Communist Party of China's Publicity Department and Public Information Department."
http://en.wikipedia.org/wiki/Xinhua_News_Agency
To their "proposals", I do not say no, but HELL NO!!!
That's the Obama way.
What's next.
Get rid of this bozo in 2012
Gonzlez thinks he's "informed" and "engaged" because he was able to buy a car. Yeah, that makes sense. Tell us, who gave you that information? Oh, that's right...the people trying to sell you the car.
That's all well and good, but who's going to tell you about what's happening in the Gulf? BP? So far, every word out of their mouths regarding the spill has been a lie.
So if you do away with the structure that will pay for those to find out those facts, exactly how are you going to acquire them? Thus, we see the ridiculousness in your claim that paying NPR and PBS to increase journalism presence at the state and local level is "silly." Last I checked, neither NPR nor PBS were newspapers. They're exactly the sort of outfit we should be trying to support.
Exactly how long do you think HuffPo is going to last if there isn't any news to aggregate?
But then again, I'm not surprised that someone from the Heritage Foundation would find the most flimsy of excuses to cut PBS and NPR.
Facts have that liberal bias, you know.
Would you like your taxes to support a media that has a conservative bias?
in that report and statements.They learned from what happened to their readers
economically and financially (loss of jobs, foreclosures, losses the stock market, etc.),
got a horror out of that and do what they can do in order such misery.
http://rinf.com/alt-news/media-news/where-was-media-when-sub-prime-disaster-unfolded/2854/
- While we have more access to information than ever, that does not necessarily mean 'Americans have never been better informed' - we're just swamped with choices. If anything, it's harder than ever to discern the truth from the deluge of opinion/blog/PR/spin/infotainment surrounding us 24/7.
- There are real concerns about the sustainability of honest-to goodness investigative journalism, which takes money and time to produce. The occasional whistleblower / undercover blogger who spends a few weeks hounding one particular story is one thing; an independent press with sufficient resources and access to power, diligently keeping our institutions honest, is another entirely. The Founding Fathers were sorta counting on the Fourth Estate as being vital to democracy. Obviously there are potential conflicts of interest in having government subsidize news-gathering operations. But before waiting to see how or when Google intends to monetize news-gathering, I'd rather keep existing news rooms afloat, thank you.
- Private foundations owning and operating newspapers may be a better longterm solution. But for now, to disparage increased funding for PBS and NPR is shortsighted and petty (and, I suspect, partisan politics). Some of the finest journalism out there can be found on the public airwaves - helping it find a wider audience is far from 'silly'.
That press will do everything in its power to maximize its own interests - which are now inextricably tied to the same government it reports on.
Duh.