“We’re from government and we’re here to help save journalism.”

That seems to be the hot new meme in media policy circles these days. Last week, it was the Federal Communications Commission (FCC) kicking off their “Future of Media” effort with a workshop on “Serving the Public Interest in the Digital Era.” This week, it’s the Federal Trade Commission’s (FTC) turn as they host the second in their series of workshops on How Will Journalism Survive the Internet Age? Meanwhile, the Senate has already held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) recently introduced the “Newspaper Revitalization Act,” which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat.

I have no doubt that many of the public policymakers behind these efforts have the best of intentions and really are concerned about what many believe to be a crisis in the field of journalism. But here are my three primary concerns with Washington’s sudden interest in “saving journalism”:

1. Policymakers are largely ignoring the role they played in created the current mess, and they won’t likely be willing to undo the damage. I’m speaking mostly of the myriad ownership restrictions and assorted other “public interest” regulations that have strangled many traditional media operators over the years and limited their ability to respond to marketplace changes. I documented these rules and their anti-innovative impacts in my 2005 book, Media Myths: Making Sense of the Debate over Media Ownership. I fear that they now won’t be willing to loosen those chains that continue to bind the media sector. Moreover, it may already be too late for some of those players.
2. Many public officials are largely focused on the problems associated with change and are either ignoring–or, through their interventions could thwart–the opportunities associated with change. No doubt, many media operators are struggling. But it is equally true that exciting new media business models and opportunities are developing. As I pointed out in my recent Newseum debate, while we are in a gut-wrenching evolution with a great deal of creative destruction taking place, we should be careful to not to head off potentially advantageous marketplace developments, if even some are highly disruptive.
3. Increased “assistance” from Washington will likely come with strings attached and raise troubling First Amendment implications. Sen. Cardin’s bill, for example, serves as a good example of what makes me so nervous about Washington’s growing interest in “saving journalism.”  As a condition of any any media entity receiving non-profit tax status, the bill would disallow political endorsements on newspaper editorial pages–which, like campaign finance restrictions, would be a boon for incumbents. That should serve as fair warning to journalists about the sort of strings lawmakers will attach to press-welfare efforts going forward. What else might subsidized media entities have to put up with? Free campaign ads for politicians? Fairness Doctrine or mandatory right of reply for printed editorials? Censorship for “negative” political satire or comics? Moreover, how do we define a “media entity” or “journalist” in terms of how is eligible for support?  Taken together, these considerations raise some rather profound First Amendment questions.

Stay tuned because this debate is just getting started. I suspect that policymakers will significantly step up their interest in the issue as more traditional media entities begin failing. What will be interesting is the extent to which some policymakers begin to embrace the “media reformista” agenda of greater public control that some fringe groups like Free Press favor. I’ve documented their radical agenda here before in my essays:

• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole
• Free Press, Robert McChesney & the “Struggle” for Media
• What the Media Reformistas Really Want
• Socializing Media in Order to Save It

And I’m currently finishing up the new book by Robert McChesney & John Nichols, The Death and Life of American Journalism, which is a blueprint for how to convert media into wards of the State.  As part of their effort to create a massive “public works” program for the press, they advocate that public subsidies for media be funded by everything from a 5% tax on consumer electronics to a 3% tax on monthly ISP & cell phone bills to taxes on commercial advertising.  Truly frightening stuff. Anyway, I’ll have a complete review done shortly.

Further reading:

• summary of remarks at “Crisis in Journalism” event, by Adam Thierer, Feb. 2010
• Public Option for Press Should Get the Red Pen, by Adam Thierer, The Daily Caller, Jan. 2010
• A “Public Option” for Media? The Free Press Plan to Put Journalists on the Public Dole, by Adam Thierer, Nov. 2009
• Free Press, Robert McChesney & the “Struggle” for Media, by Adam Thierer, Aug. 2009
• What the Media Reformistas Really Want, by Adam Thierer, Aug. 2008
• Socializing Media in Order to Save It, by Adam Thierer, City Journal, March 2009
• Obama Should Just Say No To Newspaper Bailouts, Adam Thierer, Sept. 2009
• The Dangers of Government-Subsidized News, by Adam Thierer, Oct. 2009
• A Bailout For The First Amendment?, by Wayne Crews, Aug. 2009
• testimony at FCC’s Hearing on “Serving the Public Interest in the Digital Era”, by Adam Thierer, March 2010
• A Manifesto for Media Freedom, by Adam Thierer and Brian Anderson, 2008
• Chairman Leibowitz’s Disconnect on Privacy Regulation & the Future of News, by Adam Thierer & Berin Szoka, Progress Snapshot 6.1, January 13, 2010
• Media Ownership Proceedings, by W. Kenneth Ferree, Testimony before the Federal Communications Commission, November 3, 2009
• Media Myths: Making Sense of the Debate over Media Ownership, by Adam Thierer, June 2005

Over at “Convergences,” I write on the origins of the idea of a “public option” for health insurance. In part, I note:

At a superficial level, the “public option” for health care is both appealing and puzzling. From a competition policy standpoint, the entry into the market of a subsidized competitor offering a wide array of benefits certainly might put downward pressure on prices as well as easing humanitarian concerns about access. Equally obvious, though, are objections. What mechanism of accountability would exist to ensure that this subsidized entity is well run? It cannot be allowed to go bankrupt; nor is it likely that unhappy customers would have much leeway in suing it. How would it avoid driving private insurers out of the market for low-end service entirely? How much of a subsidy would it get, and how is this to be funded? Since the party and administration that sponsored this proposal are associated with the intelligentsia, however, people hoping to improve the health care system probably felt entitled to trust that these questions had good answers. Somewhere, someone deep in the bowels of the brain trust had considered these issues. Curious about this, I found myself reading one of the more serious works to address the public option, a paper by Randall D. Cebul, James B. Rebitzer, Lowell J. Taylor and Mark E. Votruba entitled, “Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance,” identified as NBER Working Paper No. 14455, from October 2008.

Read my whole piece, here.

Free Press, the radical pro-regulatory media activist group, recently filed comments with the Federal Trade Commission (FTC) for the agency’s upcoming workshop on “How Will Journalism Survive the Internet Age?”  The Free Press comments provide an enlightening glimpse into the mind of how many on the Left now think about media policy in America.  Their approach can be summarized as follows:

1. Nothing the private sector can do will save journalism (unless it is entirely non-profit / non-commercial in nature);
2. Even if there was something that private players could do to save journalism, Free Press would likely have federal authorities forbid it anyway (especially if it involved new business ownership patterns or combinations); and,
3. The only thing that can really save journalism is a “public option” for the press in the form of massive state subsidization of media in this country.

To elaborate on the last point, here’s how Free Press summarizes what they are looking for:

For U.S. public media to become a truly world-class system will require a substantial increase in funding. This could be accomplished by an increase in direct congressional appropriations to the Corporation for Public Broadcasting. With increased funding — to as little as $5 per person, increasing annual appropriations to some $1.5 billion — the American public media system could dramatically increase its capacity, reach, diversity and relevance.

But they stress that a simple expansion of the PBS/NPR/CPB non-commercial model will not be enough since that system is “vulnerable to repeated threats of funding cuts” and too “reliant on corporate backing, via the underwriting process.” They want to go well beyond non-commercial media, therefore, and have the state start building a massive public media infrastructure.  Here’s where their pitch for a public option for the press comes in:

A better and more durable solution would be to create and fund a public trust, seeded with a large endowment and operated by the Corporation for Public Broadcasting or other NGO. The money for such a trust could be provided directly through an act of Congress or perhaps by placing a small tax on advertising. We estimate that a trust fund would require $50 billion to create sufficient revenue. If that figure seems high, consider that since last year, more than $173 billion in tax money has been sunk into just one corporation, AIG. Given that Congress just passed a nearly trillion-dollar economic recovery package, $50 billion for public media seems like a smart investment.

Basically, because everybody else is on the public dole these days–including undeserving Wall Street idiots–that justifies putting media operators and journalist on the dole, too.  Some pretty twisted logic there.  But the Free Press plan doesn’t end with public bailouts for media. A welfare system for journalists is next on the list:

Another form of government investment that could help spark new competition in the news ecosystem is the creation of research and development fund for journalistic innovation and experimentation. We need to think about the new media marketplace as an incubator for innovation. Just as government invests in medical research to heal the ails of the body, we need government to invest in experimentation with news models to heal the democratic ails of the body politic. We should explore the creation of a government-seeded innovation fund for journalism — a taxpayer-supported venture capital firm that invests in new business models. As a starting point, we are proposing a $50 million per year budget. This new venture capital firm could be set up as a public-private partnership, with federal matching funds for foundation-supported projects, or designed to provide guaranteed loans at low or no interest to start-up initiatives.

But wait, there’s more!  Free Press also wants:

• “a journalism jobs program to support veteran, qualified reporters and simultaneously to engage young people in journalism” that would be part of AmeriCorps.
• special tax status for journalism institutions along the lines of Sen. Ben Cardin‘s “Newspaper Revitalization Act,” which “would offer tax benefits to philanthropic groups and individuals that donate to newspapers, while providing the newspapers themselves with the tax benefits enjoyed by all tax-exempt organizations.” [Somehow Free Press fails to mention how that bill would also forbid political editorializing by those organizations as a condition of the deal!  So much for a “free press.”]
• a collection of government incentives to encourage local ownership and media divestiture: They explain… “The idea is to create, via changes to the federal tax and bankruptcy laws, a number of targeted ‘sweeteners’ that could be invoked — alone or in combination — when media properties are being put up for sale that would make new owners or ownership structures… more attractive than traditional corporate ownership models.” … “Newspaper owners might be more inclined to sell to socially motivated parties if the government offered certain subsidies or other incentives to facilitate the transactions. Perhaps the IRS could guarantee nonprofits a reduced buyout rate. In addition, government-guaranteed loans and bidding credits could be offered to nonprofits to help them purchase failing news organizations.”  A “minority media tax credit” is also proposed.

No word on how much more those programs and proposals add to the $50 billion price tag. Nor do they ever get around to explaining exactly how we’ll pay for it all, but I suppose bumping Rupert Murdoch’s marginal tax rate up to 99% would probably be where they’ll start.  The rest of us will be expected to pay our “fair share” eventually. There is, however, that one brief mention of “a small tax on advertising” as a way to pay for some of their plans.  Isn’t that just lovely.  I guess it shouldn’t be surprising that the one traditionally successful method of supporting private media operations would be the first thing Free Press would look to tax! After all, if you’re really out to destroy private media, it’s not enough to subsidize a public press option… no, you have to force the private players to pay into the scheme, too, thereby subsidizing their own competition!   You gotta hand it to these Free Press people; when they set out on a seek-and-destroy mission, they know how to get the job done.

Taken in the aggregate, the Free Press proposal reads like a Soviet-style 5-year plan for the media sector. [Hey, why not appoint another White House “czar” to oversee it all!]  In practice, such a public option for media raises many troubling questions.  The prospect of a large swath of the American media sector being treated as a publicly funded ward of the State isn’t just a small leak in the important wall between Press and State, it is the end of that wall.  It would dynamite that wall to the ground. It could potentially open the door to a fundamental corruption of the journalistic profession by public officials who would not likely be able to resist the urge to pressure those who are subservient to the State.  As such, the plan is an affront to our traditional First Amendment values and the importance of press independence in particular. And it is an affront to the taxpayers who would be stuck paying for a lot of journalism that they may not even want, like, or see.  As I noted in a previous essay, you can file all of this under the general theme: “Socializing Media in Order to Save It.”

But hey, it’s a new era, baby!  So get ready to pay your fair share to “save journalism” because Free Press and their founder Robert McChesney appear ready to make good on their promise to socialize all media and make it everybody’s collective responsibility via their public option for the press.

FCC Chairman Julius Genachowski suggested at an FCC field hearing this week that the federal government might create its own “version of iTunes.” Multichannel News reports:

The chairman asked panelists to think about the value of a clearinghouse where best practices could be shared. He suggested that might be a way to spur the spin-off of public-sector apps from private sector initiatives and to prevent reinventing the wheel, rather than tapping into what is already being done. There is not a lot of shared info out there, he said.

If all we’re talking about is a clearinghouse that provides easy access to apps for government-developed apps, Google Code or SourceForge may be a better model than iTunes—though perhaps without the instant name recognition by ordinary consumers. Like SourceForge, Google Code allows hosting and management of open source projects, including Google’s own products. iTunes, by contrast, essentially offers consumers finished apps. Also, iTunes is a stand-alone piece of software, of which the Apps Store is  just one part, while I can’t imagine why Genachowski’s “store” need be anything more than a website.

Whatever the analogy, such a “store” could well be a valuable tool for sharing the benefits of software development by government employees, both with the private sector and among federal agencies as well as state, local and even foreign governments. But what, exactly, Genachowski had in mind for the store remains awfully vague: Multichannel News mentions, as examples, “applications that do everything from monitoring heart rates and blood sugar to checking for greenhouse gas levels.” If the idea ever goes anywhere, it should be based on two principles:

1. All apps should be open source and available to all users to use as they see fit.
2. The store should be limited to apps developed by government employees to meet the needs of government agencies.

These principles would maximize the store’s value in making taxpayer-funded software development easily accessible. As a moral matter, it might be appropriate to limit access to U.S. taxpayers, but why bother? Attempting to authenticate users would add unnecessary complexity and raise privacy concerns needlessly: Any app we wouldn’t want to fall into the hands of, say, North Korea, simply shouldn’t be in the store at all. Sharing apps internationally would expand the potential developer base while helping to public and private sectors alike in the U.S. and abroad. If a school district in Sheboygan, WI or a village in Sudan can benefit from an app rather than starting over, so much the better for everyone!

The second requirement, combined with the open source requirement, would also help to reduce direct competition between government coders and private coders. A clearinghouse for apps government truly needs to develop on its own makes a great deal of sense: If we’re already paying a government-employee to write an app so his agency can function more effectively, that  should be shared. But a broader “public option for software” could well harm both for-profit and not-for-profit development of software by the private sector. Unless its mandate were carefully constrained by statute, such a clearinghouse could easily grow into a “public works” program for the digital age, with pressure rising for government to fund software development for as a “public good.” How to draw that line would be difficult, and it’s probably not a task that should be left to the FCC; Congress should address the question.

Keeping government-developed apps open source would allow the private sector to benefit from public sector development, rather than competing with it. But if a private company wants to incorporate a government-developed app into proprietary software, they should be free to do so. The government shouldn’t be prejudicing the private sector’s choice of business models by requiring that its apps stay open source. Nor should the government prevent commercialization of software that springs from federally funded research, as currently permitted by the Bayh-Dole Act.

Perhaps the greatest danger of such a program is that it could become a vehicle for subtle government propaganda—in violation of existing laws against using taxpayer dollars to distribute propaganda inside the U.S. The iTunes store analogy is particularly inapt (no pun intended) because iTunes, of course, provides pure content as well as apps. But apps themselves could come with a particular slant because it is increasingly difficult to distinguish “pure content” from “pure apps.” This danger could be particularly acute if the store turned into a “jobs program,” which would be inherently political, just as FDR’s New Dealers used programs like the WPA Arts Project to advance a certain ideological message, and New Deal programs in general as a way of rewarding supporters and punishing opponents. We certainly wouldn’t a Republican administration, say, trying to take revenge on Google for its support of Democrats by investing public money into direct competitors to Google’s software. Nor would we want to funding for software development to become just another dimension for the culture wars.

With those important caveats, this could be a great idea.