[Federal Register Volume 74, Number 193 (Wednesday, October 7, 2009)]
[Pages 51605-51608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24197]



Public Workshops and Roundtables: From Town Crier to Bloggers: 
How Will Journalism Survive the Internet Age?

AGENCY: Federal Trade Commission.

ACTION: Notice Announcing Public Workshops and Opportunity for Comment.


SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
announces that it will hold two days of public workshops on December 1 
and 2, 2009, to examine the Internet's impact on journalism in 
newspapers, magazines, broadcast television and radio, and cable 
television. The Internet has changed how many consumers receive news 
and altered the advertising landscape. Low entry barriers on the 
Internet have allowed new voices of journalism to emerge; the Internet-
enabled links from one web site to another have given consumers easy 
access to all types of news; efficiencies available through the 
Internet have substantially reduced advertising costs. These and other 
changes related to the Internet have benefitted consumers greatly.
    At the same time, however, lower online advertising costs have 
reduced advertising revenues to news organizations that rely on those 
revenues for the majority of their funding. The explosion in the number 
and types of web sites has increased the supply of advertising 
locations. As that supply has increased, advertisers now pay less for 
online advertising, and some advertising has moved from print, 
television, or radio to online sites. In addition, most online news is 
offered free, so online readers of news frequently do not contribute 
subscription revenues to news media.
    These developments are challenging the ability of news 
organizations to fund journalism. The workshops will consider a wide 
range of issues, including: (1) the economics of journalism on the 
Internet and in more traditional media; (2) how the business models of 
different types of news organizations may evolve in response to the 
challenges associated with the Internet; (3) innovative forms of 
journalism that have emerged on the Internet; (4) how competition may 
evolve in markets for journalism and advertising; and (5) changes in 
governmental policies that have been proposed as ways to support 
    The Commission seeks the views of the news media and the legal, 
academic, consumer, and business communities on the issues to be 
explored at the hearings. This notice poses a series of questions on 
which the Commission seeks comment.

DATES: The dates for the workshops are December 1 and 2, 2009. Comments 
must be received by November 6, 2009, to be considered in preparing for 
the workshops.

ADDRESSES: The workshops will be held at the FTC's Conference Center 
located at 601 New Jersey Ave., N.W., Washington, D.C. 20001. Those who 
plan to attend are encouraged to pre-register by sending an email to 
([email protected]). This information will be used for planning 
purposes only. Interested parties are invited to submit written 
comments electronically or in paper form, by following the instructions 
in the Instructions For Filing Comments part of the SUPPLEMENTARY 
INFORMATION section below. Comments filed in electronic form should be 
submitted by using the following weblink: (http://public.commentworks.com/ftc/newsmediaworkshop) and following the 
instructions on the web-based form. Comments in paper form should be 
mailed or delivered to the following address: Federal Trade Commission, 
Office of the Secretary, Room H-135 (Annex F), 600 Pennsylvania Avenue, 
NW, Washington, DC 20580, in the manner detailed in the SUPPLEMENTARY 
INFORMATION section below.

FOR FURTHER INFORMATION CONTACT: Jessica Hoke, Office of Policy 
Planning, FTC, 600 Pennsylvania Avenue, N.W.,

[[Page 51606]]

Washington, D.C. 20580; telephone (202) 326-3291; e-mail: 
([email protected]). Detailed agendas for the workshops will be 
made available at the workshop webpage, which will be accessible from 
the FTC Home Page (http://www.ftc.gov).

SUPPLEMENTARY INFORMATION: The Internet has given consumers access to 
an unprecedented number of information sources. The Internet's low 
entry barriers, in comparison to traditional media, have created new 
publication opportunities resulting in multiple innovative forms of 
journalism. Websites run by citizen journalists and bloggers, for 
instance, provide information, analysis, and opinion on a wide variety 
of topics. In addition, websites have been created that aggregate 
stories from many different publications, so a particular news story 
may be seen at multiple locations on the Internet. These changes have 
benefitted consumers in a wide variety of ways.
    At the same time, changes associated with Internet technology pose 
fundamental financial challenges to many news organizations. To a large 
extent, these challenges reflect changes in the business of 
advertising. News organizations traditionally have provided valuable 
venues through which advertisers can reach consumers, and advertising 
revenues - not consumer purchases - have funded most of the costs of 
producing and distributing the news. Now this business model is under 
stress. Online websites provide an almost limitless supply of 
advertising venues - a fact that has reduced advertising revenues to 
many traditional forms of news media. Particularly in the case of 
classified advertising, much lower costs combined with a much larger 
network of potential purchasers and sellers have encouraged advertisers 
to move online to a significant extent, eliminating a substantial 
portion of the advertising revenues that newspapers rely on.
    Other developments raise additional issues. Consumers are using 
``news aggregator'' websites, which collect and link to stories 
produced by news organizations. Aggregators generally do not pay for 
that content, claiming that they help news organizations by enabling 
readers to link back to the original news story, thereby driving 
traffic to the news organization's website and the advertising located 
there. News organizations respond that some aggregators not only link 
to the original news story, but also post a substantial portion of the 
original news story at the aggregators' sites. This diminishes the 
value of advertising at the original news story's website, they claim, 
by decreasing the likelihood that a reader will visit the complete 
story at the news organization's website. There are currently various 
proposals to address this issue, including possible amendments to 
copyright laws.
    These financial challenges have prompted cost-cutting measures at 
many news organizations. Additionally, a recession, bursting real 
estate bubble, and automobile industry crisis also have reduced 
advertising sales and revenues. In this economic context, the debt 
burdens from heavily leveraged purchases of news organizations, 
combined with other factors, have forced several large daily newspapers 
to declare bankruptcy and others to impose significant cuts in staff 
and other expenditures to lower costs.
    The reduction in news staffs raises questions over whether certain 
types of news are receiving less coverage as a result. Many have 
expressed concern that investigative journalism will suffer.\1\ Some 
economists believe that public affairs reporting may indeed be 
particularly subject to market failure.\2\ Non-profit organizations, 
some associated with universities or supported by foundations, have 
developed to provide investigative journalism,\3\ and proposals exist 
to amend tax rules to make it easier for foundations to support such 
news organizations.

    \1\ E.g., Will Skowronski, Investigative Teem: New nonprofit 
centers aim to fill the gap in state and local investigations, Am. 
Journalism Rev. (Feb./Mar. 2009) (describing new nonprofit centers 
dedicated to investigative journalism as a result of concern that 
news organizations have declining revenues for investigative 
reporting), available at (http://www.ajr.org/Article.asp?id=4693).
    \2\Matthew Gentzkow & Jesse Shapiro, Competition and Truth in 
the Market for News, 22 J. Econ. Perspectives 133, 146 (2008) (``As 
Downs (1957), Coase (1974), Posner (1986), and others have pointed 
out, when it comes to the kind of information that the First 
Amendment is most concerned with, there may be large social gains 
that consumers do not internalize. Consumers will prefer to free-
ride and let others invest in casting informed votes.'' (citations 
omitted)). See also James t. Hamilton, all the News That's Fit to 
Sell: How the Market Transforms Information into News (Princeton 
Univ. Press 2004) at 13 (``The point here is that since individuals 
do not calculate the full benefit to society of their learning about 
politics, they will express less than optimal levels of interest in 
public affairs coverage and generate less than desirable demands for 
news about government.'').
    \3\ See n. 1 supra.

    There are also concerns about the extent to which local journalism 
will continue to thrive. New websites run by citizen journalists, which 
generate local and hyperlocal news (covering neighborhoods of just a 
few blocks), provide alternative sources of local news. For the most 
part, however, these new journalism models have not yet proven 
profitable. Various tax proposals seek to make it easier for 
foundations and other low-profit ventures to support local journalism.
    The FTC's workshops will bring competition, consumer welfare, and 
First Amendment perspectives to analyze (1) the financial challenges 
facing news organizations in the Internet age, and (2) the potential 
for new opportunities for sustainable journalism. Workshop participants 
will discuss, among other things:
     Internet-related changes in advertising that affect news 
organizations, and ideas for potential responses to those changes;
     Internet-related changes in ways that consumers obtain 
news, and ideas for potential responses to those changes;
     Ideas for reducing the costs of providing the news and 
restructuring news organizations to become more efficient (without 
sacrificing quality);
     Potential profit and non-profit models for journalism, 
including innovative forms of journalism; and
     Potential evolution in competition among news 
    The FTC workshops will also explore whether recent changes in the 
news industry require consideration of additional or alternative 
governmental policies to ensure that journalism provides news of value 
to consumers.\4\ Workshop participants will discuss, among other 

    \4\Governmental policies supporting news organizations are not 
new. In the nineteenth century, newspapers were often distributed 
through the mail with no charge for postage. Radio and television 
benefitted from the government's licensing of spectrum without 
competitive bidding. The Newspaper Preservation Act of 1970 provided 
ways for newspapers to collaborate on operations costs, exempt from 
the antitrust laws, while continuing to compete on content. 
Copyright laws protect original news content, with exceptions for 
``fair use.''

     Proposals for new tax treatment for news organizations;
     Proposals for changes in copyright law and doctrine, 
including the ``fair use'' of news stories;
     Proposals for an antitrust exemption applied to certain 
conduct of news organizations; and
     Proposals for greater public funding of public affairs 
    Other relevant topics for the workshops may be proposed as well. An 
agenda for the December 1 and 2, 2009, workshops will be circulated at 
a later time. Participants will include journalists, editors, owners, 
and other representatives of news organizations, online advertisers, 
new media representatives (such as bloggers and local news web sites), 
consumer advocates, academics, economists, and government 

[[Page 51607]]

    The Commission seeks public comment on the questions posed below or 
any issue raised by this notice. Comments may address the issues raised 
in these questions or other issues relevant to the topics to be 
addressed at the workshops. Any interested person may submit written 
comments. In preparing for the workshop, the Commission will consider 
comments received by November 6, 2009. Later comments will be accepted 
as well.

Changes Driven by Technology

     How is the Internet changing the way consumers access 
news? What further changes are forecast? What are the consequences of 
those changes for consumers and for news organizations?
     How is the Internet changing advertising expenditures? 
What further changes are forecast? For which types of advertising will 
news organizations likely remain preferred venues? What is the likely 
role of targeted advertising in the future, both by news organizations 
and other entities?
     How is the Internet changing the way news organizations 
and others research, write, edit, produce, and distribute news? How 
could the Internet be useful in reducing those costs? What would be the 
likely consequences of any changes?
     What innovative forms of journalism have emerged due to 
the Internet? What types of journalism are produced?
     What are the business models, including the revenue 
sources, for new models of journalism on the Internet? Are they 
profitable? What are the prospects for future profitability?
     What new forms of journalism and new business models may 
become more prevalent in the future? How might new or improved 
technologies drive the evolution of the news media in the future?

Economic Challenges of News Organizations

     What economic challenges do news organizations face today? 
What is the source of these challenges?
     What alternative cost-cutting measures have news 
organizations considered? Which have they adopted? What further 
measures are under consideration?
     How have cost-cutting measures affected the provision of 
news to consumers? What types of news are no longer being covered? What 
types of news receive less coverage than before? What are the long-term 
consequences of such reduced news coverage for consumers? What are the 
long-term consequences of such reduced news coverage for ensuring an 
educated citizenry?
     How might the business models of news organizations evolve 
in response to these challenges? What would be the effect of new 
business models on the type, quality, and quantity of journalism 
available both off and online?
     How are news organizations likely to compete for readers 
and advertising in the future? What is the value that particular news 
organizations can offer to persuade advertisers to choose them over 
different venues for advertising? What is the value that particular 
news organizations can offer that might persuade consumers to pay for 
their content? How will those values differ depending on 
characteristics of the news organizations (e.g., local, regional, or 
national news; specialized or broad coverage; weekly or monthly news)?

Government Policies

     Are new or changed government policies needed to support 
optimal amounts and types of journalism, including public affairs 
coverage? Why or why not? Could new or changed government policies 
encourage more competition among news organizations?
     Should the tax code be modified to provide special status 
or tax breaks to all or certain types of news organizations? Why or why 
not? If yes, in what ways? What would be the likely effects for 
consumers? For news organizations? What strategic behavior or 
unintended consequences might special tax treatment engender?
     Do the protections for original news content under current 
copyright law provide sufficient incentives to create that content? If 
not, should copyright law be altered? What is the role of the ``fair 
use'' doctrine in allowing use of original news content by news 
aggregators and others? Should the ``fair use'' doctrine be modified? 
What would be the effects of any changes in copyright law or doctrine 
on consumers and news organizations? What strategic behavior or 
unintended consequences might changes in copyright law or doctrine 
     What joint actions, if any, are news organizations 
considering to address the financial challenges they face as a result 
of changes brought about by the Internet? Are there any joint actions 
for which an antitrust immunity arguably would be required? If so, have 
joint actions been tried first that do not require antitrust immunity? 
Under what circumstances, if any, could an antitrust immunity for 
certain joint conduct be justified? In what ways, if any, would 
antitrust immunity be preferable to innovation to address new 
     Should the federal government provide additional funding 
for news organizations? Why or why not? If yes, should only current 
recipients of federal funding receive increased funding? What methods 
have other countries used to provide government funding for the news, 
while retaining journalistic integrity? What would be the costs and 
potential consequences of increased federal funding for the news? What 
strategic behavior or unintended consequences might increased federal 
funding engender?
    Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``News Media 
Workshop Comment, Project No. P091200'' to facilitate the organization 
of comments. Please note that your comment - including your name and 
your state - will be placed on the public record of this proceeding, 
including on the publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as any individual's Social 
Security Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . ,'' as provided in Section 
6(f) of the Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing 
material for which confidential treatment is requested must be filed in 
paper form, must be clearly labeled ``Confidential,'' and must comply 
with FTC Rule 4.9(c), 16 CFR 4.9(c).\5\

    \5\The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 

    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by

[[Page 51608]]

using the following weblink: (https://public.commentworks.com/ftc/newsmediaworkshop) (and following the instructions on the web-based 
form). To ensure that the Commission considers an electronic comment, 
you must file it on the web-based form at the weblink (https://public.commentworks.com/ftc/newsmediaworkshop). If this document 
appears at (http://www.regulations.gov/search/Regs/home.html#home), you 
may also file an electronic comment through that website. The 
Commission will consider all comments that regulations.gov forwards to 
it. You may also visit the FTC Website at (http://www.ftc.gov) to read 
the document and the news release describing it.
    A comment filed in paper form should include the ``News Media 
Workshop Comment, Project No. P091200'' reference both in the text and 
on the envelope, and should be mailed or delivered to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-135 
(Annex F), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC 
is requesting that any comment filed in paper form be sent by courier 
or overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. The Commission will consider all timely and responsive 
public comments that it receives, whether filed in paper or electronic 
form. Comments received will be available to the public on the FTC 
website, to the extent practicable, at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of discretion, the Commission makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC Website. More information, including routine uses permitted by the 
Privacy Act may be found in the FTC's privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

    By direction of the Commission.

Donald S. Clark,
[FR Doc. E9-24197 Filed 10-6-09; 12:23 pm]