Published on TheHill.com on June 15, 2010
Jon Leibowitz, the chairman of Obama’s Federal Trade Commission, is at the epicenter of a quiet movement to subsidize news organizations, a first step toward government control of the media. In our book, 2010: Take Back America — A Battle Plan, we reported that he had commissioned a study to examine plans for a federal subsidy for news organizations. Among the measures under consideration are special tax treatment, exemption from antitrust laws and changes in copyright laws.
Now Leibowitz has begun to pounce. A May 24 working paper on “reinventing” the media proposes that the government impose fees on websites such as the Drudge Report that link to news websites or that it tax consumer electronics such as iPads, laptops and Kindles. Funds raised by these levies would be redistributed to traditional media outlets.
While Leibowitz distanced himself from the proposals for the taxes, calling them “a terrible idea,” his comments appear to be related only to the levies proposed in the working paper. Nobody is commenting on the other part of his proposal — a subsidy for news organizations.
By now, the Obama MO should be clear to all. As he has done with the banks, AIG and the car companies, he extends his left hand offering subsidies and then proffers his right laden with regulations. Should the government follow through on Leibowitz’s ideas and enact special subsidies and tax breaks for news organizations, it will induce a degree of journalistic dependence on the whims of government not seen since the days when the early presidents bestowed government advertising on favored periodicals.
Is it too difficult to imagine that the Democrats might pass laws favoring news organizations, only to question — as former White House communications director Anita Dunn did — whether or not Fox News is a news organization or an “arm of the Republican Party”? We can see a future in which news media are reluctant to be too partisan or opinionated for fear that they would endanger their public subsidy.
Once such a subsidy is extended to news organizations, every company in the business must have it. Otherwise, the competitive advantage for the subsidized companies would prove too steep an obstacle to overcome.
In all the attention that has been given to the idea of an Internet tax on news aggregation sites and on tech equipment — trial balloons that would obviously be shot down — very little attention has been focused on the expenditure side of the proposal — the subsidy of news organizations.
But The Wall Street Journal reported six months ago that Leibowitz had commissioned a study to determine “whether the government should aid struggling news organizations which are suffering from a collapse in advertising revenues as the Internet upends their centuries-old business model.” Among the steps under consideration are changing “the way the industry is regulated, from making news-gathering companies exempt from antitrust laws to granting them special tax treatment to making changes to copyright laws.”
These are exactly the kind of subsidies that could and would trigger government oversight and control.
Look at how radio stations squirm when their licenses are up for renewal before the FCC. We can imagine news organizations pulling their punches in order not to antagonize the hand that feeds them.
The Leibowitz study, and the subsidy proposals that are likely to emerge from it, represent a chilling threat to the First Amendment and to our civil liberties.