The Federal Trade Commission's Coming War on Bloggers

The FTC is planning public hearings aimed at figuring out how to prop up dying newspapers. On the agenda: tax breaks for news organizations, changing copyright law, and "greater public funding of public affairs news." This is very, very bad.

An announcement for a coming two-day FTC workshop called "From Town Crier to Bloggers: How Will Journalism Survive the Internet Age?" appeared on Wednesday in the Federal Register. The meetings, to be held in December, will seek to assess the "fundamental financial challenges to many news organizations" and how to address them using government policy. Here's what the FTC will be considering:

  • "Proposals for new tax treatment for news organizations"
  • "Proposals for changes in copyright law and doctrine, including the 'fair use' of news stories"
  • "Proposals for an antitrust exemption applied to certain conduct of news organizations"
  • "Proposals for greater public funding of public affairs news."

The idea of a bailout for newspapers has been gaining momentum lately, and the FTC workshop shows that it's not going away any time soon. It's a horribly bad idea, for reasons that have been rehearsed before: It makes an ostensibly watchdog press beholden to federal policy-makers for its continued survival; it interferes with a rapidly changing marketplace to the explicit benefit of established behemoths and disadvantage of emerging competitors; and it seeks to use the federal bureaucracy to encourage certain kinds of speech over others.

Would Gawker be eligible for a "new tax treatment"? Hell, we're a news organization—we even called an FTC spokeswoman for comment on this very blog post. What about TMZ? They break news every day. Do they need a tax break? Or does Andrew Breitbart's budding empire at BigGovernment.com, which recently broke a couple compelling stories about ACORN and the National Endowment for the Arts that certainly qualify as "public affairs news," need any public funding? How about Politico?

We presume that the answers to the above questions in any proposed FTC scheme for rescuing the newspaper industry would be no. But the distinctions and conceptual gerrymandering required to find a way to subsidize the lumbering giants at the expense of their upstart competitors—to find a reason that Rupert Murdoch, whose Fox News Channel is firing on all cylinders as the Wall Street Journal faces secular decline, merits consideration while Talking Points Memo's Josh Marshall doesn't—will, we suspect, render the whole project foul and reactionary. The simple fact that some news organizations are facing competitive pressure and shifting business models isn't an argument for government intervention into the content business.

The workshops come on the heels of the FTC's announcement on Monday that bloggers, Facebook posters, and Twitterers will be at risk of an $11,000 fine if they endorse a consumer product and fail to disclose compensation—including, potentially, receiving free samples for review. We certainly support full disclosure of freebies and deplore undisclosed paid shilling, but $11,000? For Facebook posts? It's a ridiculously out-of-whack expedition into online marketing. UPDATE: The FTC disputes the $11,000 figure here, and points out that fines are administered only after a hearing in federal court. But the new guidelines do clearly put bloggers who don't disclose freebies at risk of administrative action.

The FTC's argument for looking into the news business is premised in part on the special nature of reporting traditionally done by newspapers: "The reduction in news staffs raises questions over whether certain types of news are receiving less coverage as a result," reads the Federal Register announcement. "Some economists believe that public affairs reporting may indeed be particularly subject to market failure." Susan DeSanti, an FTC spokeswoman, explained to us that "it may be that there is less than socially optimal demand for investigative reporting," a circumstance that may require government redress.

The prospect of a federal commission bemoaning the demise of investigative reporting is howlingly perverse. First off: There has never been a "socially optimal" demand for investigative reporting. It's boring and expensive, and it has always been subsidized by the crossword puzzles and recipes that most people buy newspapers for. But we can think of one way the FTC can help out investigative reporters: Go back and release in full the results of the 354 Freedom of Information Act Requests that it denied last year. And pledge right now to fully cooperate with every reporter who requests information from the commission. While they're at it, maybe they could call the State Department and tell them to respond to the request for incident reports from each instance of contractors in Iraq fatally discharging their weapons that we've been waiting on for two years now. Or tell the White House to return the various calls and e-mails from us over the past nine months that they've ignored. Or tell the Federal Reserve to release the 6,000 pages of bailout-related documents that it has gone to court repeatedly to keep away from Fox News. Etc.

The federal bureaucracy exists to frustrate the efforts of investigative reporters, and the FTC's bizarre, romanticized sympathy for "public affairs" reporting strikes us as a proxy argument for their establishmentarian inclination to protect the status quo. DeSanti says the workshops are purely informational in nature, designed to "pull information together and have a discussion." The FTC routinely produces reports, with policy recommendations, assessing the state of play in given industries, and while DeSanti says "it's not at all clear" at this point that such a report will result from the proposed workshop, we suspect that they're not simply whistling Dixie.

If the Obama Administration wants to help reporters, and their employers, engage in public affairs journalism and investigative reporting, they should start by answering questions and providing information—like, say, photographs of what our servicemembers have done to Iraqi and Afghani prisoners—to anyone who asks for it, irrespective of whether they work for a newspaper or a blog.

[Via Cryptome.]