And I Thought I Was Paranoid…

The other day, I wrote about the Federal Trade Commission’s report on the “reinvention of journalism.” Well, since the draft report was released, there has been a sizable response from the pundits to the effect of “this is the Obama administration’s socialist grab for control of the press and limiting the concept of free speech.” I have to say that, even as willing as I usually am to see a vast conspiracy with a sinister goal, these doomsayers have surprised me. I, too, read the complete report, and in no way did I see it as a grasp for government control of the media. It’s a plain and simple business deal. What the FTC has done here is provide a menu of regulatory changes for big media to consider that will benefit them, the cost of those changes in the form of new taxes, and political cover with the veneer of preserving journalism.

Here’s the deal: big media gets the changes to copyright and fair use they need to gut the blogs, aggregators and search engines, and the anti-trust exemptions to impose paywalls across the board and reimpose their monopolies. In exchange, the Feds get a cut of the proceeds: 2% of the advertising take, 5% of the device sales, and 5% of the ISP fees. To top it off, they both get to mask their back door deal with policies that “promote” journalism such as journalist Americorps, a national fund to support journalism, tax breaks for hiring journalists, etc.

This isn’t some great attempt to turn the media into a propaganda engine and restrict free expression, it’s the government selling regulatory changes that provide massive competitive advantages to legacy players for a percentage of the new revenue they’ll make. The Feds aren’t going to lock down the press because in this deal, it’s in their best interest if the press is as popular, widespread, and profitable as possible. Of course, it won’t matter if it’s new media or old who eventually wins out, they’ll still have their slice of the device, ad and internet service pie. And possibly a nice chunk of change from the broadcast spectrum, as well.

It’s a cynical attempt by the Feds to use the current disruption in the publishing industry to coerce struggling media companies to take a deal that gives them hope of long term survival and a return to the profit margins of yesterday by allowing themselves to be used as a justification for a series of new taxes that will generate tens of billions for the treasury.

It’s a suckers bet because, even with the new regulations, there’s no guarantee that legacy media would properly press the advantages they would give them. Remember, we’re talking about an industry that has mishandled every advantage it’s had since the advent of the internet. They could easily screw this up, too. If they have any sense, they’ll make the Feds use someone else as the foil for grabbing another giant hunk of cash from us all. My only fear is that many of them might be desperate enough to take the chance.


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