FTC Proposes to Regulate Internet News!

Today we take a detailed look at a recent FTC proposal that effectively regulates the news. You can get it here.

Hold onto your copy of the US constitution, which states:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The FTC, packed with Obama socialists, has just published a Discussion Draft on “Potential Policy Recommendations to Support the Reinvention of Journalism“.  These proposals seek to regulate the Internet — not just access speeds and bandwidth, but the information itself!

Proposal 1: Control the Utterance of Facts

The FTC deplores the fact that copyright does not protect “facts” in news stories, that other organizations can “free-ride” by repeating the facts gathered by newspapers.

Advocates argue “the copyright act allows parasitic aggregators to ‘free ride’ on others’ substantial journalistic investments,” by protecting only expression and not the underlying facts, which are often gathered at great expense. They define parasitic aggregators as those that, without permission, post enough material to render the original news stories redundant. This free-riding undercuts revenue for those who make investments in journalism and undermines theirincentive to do so, according to advocates. They suggest that federal hot news legislation could help address revenue problems facing newspapers by preventing this free-riding.

So the first point is : why does the FTC think they have to intervene to help one type of competitor in the media?

They go on to discuss what the moratorium period might be under federalized “hot news” rules — rules that would prohibit, it would seem, you from tweeting information published by, say, the White House news team.  While they discuss a “2 hour” ban — what would stop politicians and liberal courts from a 2-month ban?? … making the only facts available from White House trusted sources.

Proposal 2: Limit Search Engine Fair Use of News

To be fair, this argument is balanced, but consider this — that obscure blog that breaks embarrassing news might not be indexed by the search engine, ensuring that popular sites (Time, Newsweek, New York Time and other left-leaning sites) are the only ones with the “facts”.

Proposal 3: License News

Getting a chill yet. They go on to say:

governments have considered how to provide adequate incentives and funding for the news and ar exploring, for example, the creation of government-fostered pilot programs to investigate new business models for IP  [Intellectual Property] and discourage free-riding.

The notion: If you want to tweet a story, you pay a “micro-payment” back to the originator: the NYT, the White House news machine, etc.

They acknowledge:

A compulsory license places an effective tax on certain conduct.

So yes, the FTC proposes we tax the dissemination of  FACTS, clearly abridging the freedom of speech and the free press.

Proposal 4: Drop Anti-Trust Rule for Newspapers So They Can Collude to Force Consumers to Pay for News

Another chilling concept.  So let me count it up so far (and I am only on page 13 of the 47 page report) … you can’t repeat facts, you can’t search news, and you have to pay to find news facts … all under government licence.  Now, big news can syndicate their news and prevent anyone from uttering the facts they find!!!

Proposal 5: Provide Government Subsidies to Some News Organizations

Yikes! The FTC comments:

Many people, including journalists, recoil at the thought of government assistance to sustain journalism.

(Me too!)  Yet it justifies subsidies with a comment that it has been done and:

The Corporation for Public Broadcasting has received direct support for over 40 years.

The FTC report waxes on for pages on the glories and success of Public Broadcasting.

“the fundamental purpose of public service media is to provide programs and services that inform, enlighten and enrich the public… CPB invests in programs and services that are educational, innovative, locally relevant and reflect America’s common values and cultural diversity.”

Can you hear the choirs singing the praises to the glories of PBS?  The FTC moans on …

The U.S. government’s support for public broadcasting is very small compared to other democratic countries. For example, “if the United States spent at the same per capita level as Canada, our federal commitment would be $7.5 billion.” Per capita spending by Finland and Denmark is approximately 75 times greater.

So the proposal is to provide subsidies (i.e.  Place more news organizations under government funding = control).


    • Fund AmeriCorps Journalism Division. Can anyone say “Socialism youth camp and ministry of information”?
    • Direct more funds to Public Broadcasting.
    • Directly fund local news.  Now who would hand out the money? Would a non-government supporting blog get funded?
    • Provide tax credits for hiring reporters.
    • Provide citizens with a voucher to buy non-profit news!  You have to read the entire text to grasp the Orwellian nature of this proposal.
  • Establish Citizenship News Vouchers. Citizenship news vouchers would allow every American tax payer to allocate some amount of government funds to the non-profit media organization of their choice. People could indicate on their tax return whether and to which nonprofit organization they want a specific amount (perhaps up to $200) to be donated, but they would not be required to designate a donation. They could split their “federal funds” donation among several different qualifying nonprofit media . Proponents of this approach suggest it would create a funding mechanism to encourage viable independent Internet journalism while avoiding government control or the creation of a bureaucracy that could influence the recipients of the money based on politics. This proposal also could give foundations a role to play. Foundations could provide start-up funding for 3 to 5 years to help new ventures, “and then see if there is popular support for the venture in the form of Citizenship News Vouchers.” If desired, this proposal could be structured to apply to commercial, as well as non-profit, news entities.
  • Provide grants to universities to conduct investigative journalism.  Has anyone seen a journalism school in America that is not far left-of-center?
  • Provide SBA funds to nonprofit journalism organizations.  Can you spell “ACORN”?
  • Point the Voice Of America at America.
  • Increase postal subsidies for newspapers.

New Taxes

The FTC paper then rambles into a long discussion of how to tax to pay for “better news”.

  1. 7% tax on radio and TV revenues! (Watch your cable bill folks!)
  2. 5% tax on TVs and radios!
  3. Tax on spectrum auction prices.
  4. 2% tax on all advertising!
  5. Another federal 3% tax on cell phone bills!

A Better Society for All

The FTC then waxes on about the best organization structure for news so that it serves

social purposes, such as economic redevelopment or environmental protection.

Some news entities may wish to explore hybrid organizational structures that integrate the pursuit of social purposes with business activities. These organizational designs include, among others, “Flexible Purpose” and “Benefit” corporations and low-profit limited liability companies (L3Cs). These hybrid designs may make sense for news entities, because journalism can fit a “social purpose” paradigm – that is, good journalism improves social welfare by educating the public through truthful and insightful reporting.
Gee, is current news un-truthful and not insightful? I seem to find a lot of insight but truth (from NYT, White House, etc) is sometimes hard to divine. Caveat emptor.  Social purpose non-profits?  Does it sound like George Soros is behind this?
“Innovations” To Promote Low-Cost Journalism

The report suggests government make Freedom of Information Act data (and most government information) more readily available, indexable and available (to select new organizations) for a reduced-fee.


In a nutshell, the FTC proposal suggests we:

  • Abridge the freedom of speech and the press by restricting the utterance of facts reported in the news.
  • Limit the ability of search engines to search news.
  • License news so you pay when you repeat a fact.
  • Allow news organizations to collude.
  • Subsidize some news organizations, and promote non-profit news organizations for good social purposes.
  • Provide you with a voucher so you can buy non-profit news.
  • Tax TV, radio, TVs, radios, spectrum, advertising and cell phones.

CONGRESS SHALL MAKE NO LAW.  If any one of these proposals gets into any bill, it is a clear and blatant abridgment of the First Amendment.

Citizens: beware!

News Reaction:

Even the Huffington Post says to the FTC: Get off our lawn!

The LA Times ridicules it in a story: Obama’s FTC plan to reinvent America’s news media.

The Washington Examiner asks: Will journalists wake up in time to save journalism from Obama’s FTC?

Cross posted to http://liberty.cooperusa.net/2010/06/02/ftc-proposes-to-regulate-internet-news