By Kathleen A. Kirby, Partner, Wiley Rein LLP
“The Future of Journalism: Is it time for a bailout?” A provocative title for an interesting discussion moderated this week by RTDNA President Emeritus Barbara Cochran. Panelists joining Barbara for the program, held at the Newseum and covered live by C-SPAN, were unanimous in answering the question “no,” although presenting disparate viewpoints as to whether and what role the government should play in promoting robust journalism.
To set the stage, Barbara called upon Susan DeSanti, Director of Policy Planning for the Federal Trade Commission, and Steve Waldman, Senior Advisor to the Chairman of the Federal Communications Commission, to talk about the journalism proceedings currently ongoing at their respective agencies. The FTC is conducting a series of workshops centered around how journalism will survive the Internet age. DeSanti focused primarily on newspapers — stating in no uncertain terms that newspapers have not asked for a bailout.
She explained that while most newspapers are profitable as stand alone enterprises, they are saddled with debt. That, exacerbated by ad revenues gutted by the recession and the demise of classified advertising, have resulted in a “public affairs news” market failure. The FTC is exploring various options of providing indirect support for media organizations, DeSanti said, noting that not every government action amounts to “entanglement” for First Amendment purposes. She cited government supported news organizations in many other countries, and characterized the Corporation for Public Broadcasting as one of our country’s “most trusted news sources.” Perhaps the government could help reduce the cost of newsgathering, DeSanti suggested, by making government data more readily available and searchable.
The FCC has launched a Future of Media proceeding, and it too is conducting workshops and calling for public comment. According to Steve Waldman, a former editor at U.S. News & World Report, the term “bailout” is an unfortunate coincidence of timing with failures in the auto and banking industries.
There will be no bailout, said Waldman, but the serious contraction of journalism may have created a crisis just as severe. He voiced concern about whether we are losing the ability to hold government accountable and to have democracy function as designed. He noted that historically, media outlets were able to cross-subsidize news gathering operations in ways they cannot as readily now, which begs the question “what are consumers willing to pay for news?” If the answer is, “not much,” Waldman said, therein lies the dilemma.
On the other hand, Waldman noted that the demand for news is skyrocketing and that much of what has happened in recent years is tremendous market success, not market failure. Waldman emphasized that many of the rules governing broadcasting were adopted not only before the advent of the Internet, but before television existed, and need to be reevaluated. He focused on broadcasters’ public interest obligations, explaining that the theory is sensible, but tricky. The FCC is exploring what the concept even means, and whether it is fair for broadcasters to be subject to such obligations when their competitors are not.
On the other hand, Waldman suggested that, in the face of proposals to reclaim some of the broadcast spectrum for broadband application, perhaps the best way to ensure that broadcasters keep their spectrum is for them to have and fulfill some kind of public interest obligation that might at the same time “save” journalism. That said, Steve underscored that the FCC is looking at the Future of Journalism from both a regulatory and a deregulatory perspective. The FCC’s pending localism proceeding will be rolled into the Future of Media inquiry, he said, while the FCC’s quadrennial review of media ownership rules will proceed on a separate track.
Barbara Wall, Vice President and Senior Associate General Counsel at Gannett Co., Inc. was quick to point out that it is premature to bury newspapers. She emphasized that Gannett believes they have a vital and viable business, and that local watchdog journalism is the future. Barbara suggested that while government subsidies of journalism would be a radical idea with First Amendment implications, there might be things government could do to help the industry and forestall a handout. For example, relaxing media ownership restrictions such as the newspaper/broadcast cross-ownership rule, examining the ways the DOJ defines markets for antitrust purposes, or leveling the playing field for postal rates.
Andy Schwartzman, President and CEO of the Media Access Project, said pointedly that journalism is a public good and we are facing a serious market failure. He suggested the government use the First Amendment as a tool to promote robust journalism and that there are ways to do that without government intrusion into the newsroom. Government support, Schwartzman said, does not impede National Public Radio’s journalism, for example. He explained that the National Broadband Plan underscores the tremendous benefit (i.e., spectrum) that television broadcasters are getting for free, so they should bear responsibility. While Schwartzman suggested that First Amendment concerns about government intrusion are well-placed, government regulations can be crafted so that they are viewpoint neutral and do not involve the government in making value judgments about content. He urged the government to look at the journalism crisis and look at it fresh, keeping in mind that citizen journalists are no replacement for professional and reliable media sources.
In answer to the question, “is it time for a bailout,” Gene Policinski answered, “no and never.”
“With government shekels come government shackles,” the VP and Executive Director of the First Amendment Center of the Freedom Forum cautioned.
While Policinski admitted that there is a crisis, his view is that we are in transition from a model that worked for a century to something new. We have gone from the “village green to the village screen,” Policinski says, and the incredible thirst for information on the consumer end will lead media companies to develop new mechanisms and new formulas for success.
An audience member suggested to the panel that, absent government intervention, the kind of investigative reporting that exposed the Watergate scandal might not exist. Barbara Cochran, who of course was working as a journalist in Washington at that time, reminded him that government pressure was brought to bear on the Washington Post Company because the Post also owned television stations licensed by the FCC. A courageous owner standing firm in the face of government threats so as to fulfill the highest role of a free press was a force behind the Watergate reporting, said Cochran.
The discussion was part of a larger program presented by the Federal Communications Bar Association’s Mass Media Committee, in association with the Freedom Forum and the ABA Forum on Communications Law, and was designed to examine “Media Regulation and the First Amendment in the 21st Century.”
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Question of the Week - May 18, 2012
