EDITORIAL: FTC floats Drudge tax

GETTY IMAGES Federal Trade Commission Chairman Jon Leibowitz (right), seen with Attorney General Eric H. Holder Jr. at a news conference in Washington on Monday, says mortgage-rescue companies are on notice.

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The Federal Trade Commission (FTC) is seeking ways to “reinvent” journalism, and that’s a cause for concern. According to a May 24 draft proposal, the agency thinks government should be at the center of a media overhaul. The bureaucracy sees it as a problem that the Internet has introduced a wealth of information options to consumers, forcing media companies to adapt and experiment to meet changing market needs. FTC’s policy staff fears this new reality.

“There are reasons for concern that experimentation may not produce a robust and sustainable business model for commercial journalism,” the report states. With no faith that the market will work things out for the better, government thinks it must come to the rescue.

The ideas being batted around to save the industry share a common theme: They are designed to empower bureaucrats, not consumers. For instance, one proposal would, “Allow news organizations to agree jointly on a mechanism to require news aggregators and others to pay for the use of online content, perhaps through the use of copyright licenses.”

In other words, government policy would encourage a tax on websites like the Drudge Report, a must-read source for the news links of the day, so that the agency can redistribute the funds collected to various newspapers. Such a tax would hit other news aggregators, such as Digg, Fark and Reddit, which not only gather links, but provide a forum for a lively and entertaining discussion of the issues raised by the stories. Fostering a robust public-policy debate, not saving a particular business model, should be the goal of journalism in the first place.

The report also discusses the possibility of offering tax exemptions to news organizations, establishing an AmeriCorps for reporters and creating a national fund for local news organizations. The money for those benefits would come from a suite of new taxes. A 5 percent tax on consumer electronic devices such as iPads, Kindles and laptops that let consumers read the news could be used to encourage people to keep reading the dead-tree version of the news. Other taxes might be levied on the radio and television spectrum, advertising and cell phones.

The conflict of interest in having the government pay or contribute to a newsman’s salary could not be more obvious. Reporters and columnists would have little incentive to offer critical analyses of tax increases that might mean a boost in the pocketbook. Once Congress has the power to fund the news, it can at any time attach “strings” designed to promote certain viewpoints - in the name of fairness, of course. Each year at budget time, the Fourth Estate would scramble to be worthy in the eyes of Capitol Hill for increased support. It is hardly a surprise that the heavily subsidized National Public Radio frequently presents issues in a way favorable to Washington’s tax-and-spend agenda.

Self-respecting journalists must reject this tempting government bribe as the FTC brings its proposals to a round-table discussion scheduled for June 15. When it comes to the media, consumers lose most when government suppresses innovation in the name of “saving” old business models.

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