FTC Considers “iPod,” Internet, Cellphone Tax to Save Newspapers

Discusses alternative sources of revenue the Federal Govt can create to save their “crumbling business models” and help “support the reinvention” of journalism.

As if nationalizing the auto industry, banking, and recently healthcare the Feds are now discussing the possibility of nationalizing the news as well.

Scared that some of journalism’s business models are “crumbling,” the Federal Trade Commission (FTC) is floating a draft discussion titled “Potential Policy Recommendations to Support the Reinvention of Journalism” which outlines new possible sources of revenue the Feds can tap into in order to prop them up.

First, it tries to deny that it doesn’t specifically mean newspapers, the proverbial elephant in the room, but only after first saying that it does.

“Although many of the issues confronting journalism cut across different news media platforms, such as broadcast television and radio, most of the discussion in this document will use the perspective of newspapers to exemplify the issues facing journalism as a whole. Studies have shown that newspapers typically provide the largest quantity of original news to consumers over any given period of time,” it reads. “We include within the term ‘newspapers’ online news websites run either by an existing newspaper or by an online-only news organization. Other sources of news are also important, of course, and proposals for action should not favor newspapers over other news platforms.”

If other news platforms are “also important,” and likely doing fine (See: Huffington Post), then how can newspapers, however broadly defined, not be unduly favored by the proposal?

“It seems to me America’s consumers are making their choices,” says Cliff Kincaid, editor of Accuracy in Media, a Washington-based media watchdog group. “I don’t know why the FTC should interfere with that. [The report] seems to lament the decline of old liberal newspapers. But they’re in decline because consumers are finding their news and information elsewhere.”

Isn’t that really the problem here? Never before in the history of mankind have there been so many sources of news. The real reason why newspapers are “dying” is that peoples’ news consumption is being diluted among a plethora of options.

None of this really matters much in the context of what new “potential revenues” the FTC thinks the Feds can create in order to “sustain journalism.” Yes, it actually thinks the Feds need to tax us more in order to save outdated business. It’s eerily reminiscent of entertainment cartels like the RIAA and the MPAA that want the govt to save it as well.

So what are the proposed new taxes you ask?

Here they are:

1. 5% tax on consumer electronics.

2. Spectrum auction tax on the auction sales prices for commercial communication spectrum.

3. 2% tax on advertising disseminated on our broadcast spectrum.

4. ISP and cell phone tax (BOTH!).

The problem with all these new taxes, aside from the fact that they are new taxes, is that it will put the Feds in a territory best left to the rigors of independent journalism. If it begins controlling the purse strings of news outlets then what’s to say critics won’t be deemed “non crumbling” and left to wither on the vine free its subsidies?

And just when you thought it couldn’t get any worse, the FTC wants Congress to expand the Copyright Act to protect “hot news” and give news outlets copyright protection of ” short duration and limited scope to the facts reported in news articles.”

It’s a rather lengthy and will take a while to really digest, but what I’ve mentioned so far is enough to make readers wonder how it could even be proposed in the first place.

If you think people are scared of big govt now, just wait until people have to start paying $50 when they buy a $1000 big screen TV because a newspaper in Des Moines is struggling. Magnify that when millions take a look at their monthly Internet and cellphone bills as well.

Stay tuned.

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