Monday, June 07, 2010

ArsTechnica: FTC Journalism Proposals "Imbecility"

From ArsTechnica:
We get it. These aren't FTC ideas. They're only being circulated to aid discussion. But many are still bad—truly execrable stuff. Let's take a look.

Are you kidding me?

Rein in fair use. Hey, how about passing legislation "clarifying that the routine copying of original content done by a search engine in order to conduct a search (caching) is copyright infringement not protected by fair use"? This, a truly brain-dead idea, would raise "difficult questions about unintended consequences," as the FTC staff put it.

If companies don't want to be spidered by search engines, they can use robots.txt to opt out. Even the FTC staffers know this; why doesn't everyone else?

(If you want to read the original proposal, you can (PDF); it was drafted by a DC lawyer.)

Charge ISPs a monthly fee. Yes, the ideas can get worse, as evidenced by this beauty. One participant suggested:

amending the copyright laws to create a content license fee (perhaps $5.00 to $7.00) to be paid by every Internet Service Provider on each account it provides. He suggests creating a new division of the Copyright Office, which would operate under streamlined procedures and would collect and distribute these fees. Copyright owners who elect to participate would agree to periodically submit records of their digitized download records to the Copyright Office. The Copyright Office could verify these records by commissioning market-by-market sampling by organizations like Nielsen, ARB, and Comscore. He suggests these fees could provide a financial floor that allows publishers to leverage additional income, and would encourage, not discourage, the operation of market forces, and stimulate experimentation and innovation.

Did you follow that? You would pay an extra $5 a month for Internet, and that money would be divvied up to news organizations based on how frequently you visited them during the month. As a voluntary model, this is unobjectionable, especially if such media would then come free of ads; as a mandatory tax on every customer of every ISP in the country, in an era where information overload is a pressing problem, it smacks of lunacy.

According to an FTC footnote, the idea came from Stephen Nevas of the Information Society Project at Yale Law School. Why does Nevas think ISPs should foot this new tax? Prepare to bang your head on the table in frustration, because this is his answer:

"Internet Service Providers (ISP’s) sell access to free content but pay nothing for the privilege. Only in rare cases do Web users pay for what they download. Just three percent pay for what they use, according to Forrester Research data."

Of course, nothing the ISPs do has any effect on whether a journalistic enterprise charges for its services, or on how those charges are implemented.

Someone stop this man from speaking about the Internet. Please.

Federalize "hot news" law. Copyright does not give news organizations any right over facts about the world, only over the specific words used to describe those facts. But because it is so easy to “free ride” on the expensive work of real journalism by sitting in a cubicle somewhere and rewriting other people's work, some states have passed "hot news" laws that give journalists a quasi-property right over their stories for a short amount of time.

One proposal would recreate this at the national level. In the current media landscape, however, this would create huge problems. Though the big players who are most likely to complain about hot news misappropriation like to play the victim (and some truly are victims), we live in a world in which major stories are routinely unearthed by bloggers and citizens and small newspapers and big players. Everyone shares, everyone copies.

As the FTC noted, "News organizations and writers, including print, broadcast, op-ed writers, and other commentators, routinely borrow from each other. One panelist suggested that '[m]uch of what is done by newspapers with each other is actually problematic under existing hot news doctrine.'"

Antitrust exemption for paywalls. It's tough to mount a paywall today; one news site can do it, but there are so many other options that it's suicide for all but the most valuable and/or niche sites. This alone would seem to show that "journalism" is not in crisis, though it's certainly changing as geographic barriers crumble and every news outlet suddenly competes with every other news outlet.

But one proposal would remove anti-collusion rules from news organizations so that they could all get together and jointly work out some kind of paywall agreement. As one backer of this idea put it, "Publishers are rightly fearful that erecting pay walls will only be effective if it can be accomplished industry-wide, and they need an exemption to accomplish these reasonable policies."

As the FTC notes, though, "more recently, it appears that industry requests for an antitrust exemption have abated."

Tax your gadgets. One suggested way to pay for news: slap a 5 percent tax on all consumer electronics and somehow pass it out to news organizations. "A 5 percent tax on consumer electronics would generate approximately $4 billion annually," says the report.

Tax your cell phone and Internet. Others suggest that "consumers could pay a small tax on their monthly ISP-cell phone bills to fund content they access on their digital services. A tax of 3 percent on the monthly fees would generate $6 billion annually. They note, however, this is the least desirable approach because demand for these services is 'elastic' and even a slight rise in price could result in people dropping the service."
UPDATE: Tim Graham's critique here. Gadgetsteria calls the FTC's proposed tax on electronic gadgets "the worst idea I've ever heard." Adam Thierer's Progress and Freedom Foundation analysis here.