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Dec. 7, 2016, 1:26 p.m.
Business Models

Pushing to kill regulations (and weaken fair use), the newspaper lobby is asking Trump for change

The president-elect may not always get along with reporters, but a shared desire for fewer regulations could be common ground for his administration and the newspaper industry over the next few years.

President-elect Trump and journalists may be at odds with each other on most fronts these days, but there’s one area where the new administration and the newspaper industry appear to agree: They both think there are regulations that need elimination.

Late last month, the News Media Alliance (née the Newspaper Association of America) sent the incoming Trump administration a white paper detailing its policy positions on a variety of laws and regulations that it says are hurting the newspaper industry — a first for the organization. The NMA has been newspapers’ official trade association and mouthpiece since 1887, and it’s been lobbying on behalf of the industry from the start. Back then, the organization was focused on changing postal rates and newspaper tariffs; these days, it’s trying to get government to react to the rise of Google and Facebook.

“All the issues are different now, because the media landscape has changed so dramatically,” Paul Boyle, the NMA’s senior vice president of public policy, told me. “And most of it is a reflection of the reality that newspapers don’t have the dominant position today that they had in the market eight to ten years ago.”

Of the eight policies the organization wants Trump’s transition team to pay attention to, some of the most significant are FCC rules about media cross-ownership, which generally prevent companies from owning both broadcast stations and daily newspapers in the same market. The Nixon-era rule, passed in 1975, was designed to ensure that big companies didn’t have monopoly power over information distribution in a given market. The NMA’s position (like the NAA’s before it) is that while the rule made sense when people only had a handful of news options in their local markets, it’s out of date in the age of the web and the smartphone, where digital distribution gives people nearly infinite options for where to get their information — and where newspapers find themselves competing, without much success, with big tech companies for advertising revenue.

Direct comparisons are difficult, of course, but these tech companies rarely face the same kind of regulatory oversight that has built around the newspaper industry over the past few decades, which the industry maintains puts newspaper companies at a greater disadvantage.

“When you look at even the Department of Justice’s definition of a media market, you see that they only look at newspapers competing with other newspapers in a market. They do not look at newspaper competition with broadcast, magazines, cable, and the Internet. So, yeah, things have changed,” Boyle said. “Unfortunately, in government, once you have a rule that’s in place, it’s hard to get rid of that rule. There needs to be a level playing field and a recognition that markets do change and you need to adjust regulations in that way.”

The NMA is also asking for what it would consider a strengthening of copyright protection and a more limited application of fair use. In its letter to Trump, it argues that “news aggregation platforms such as Google News” take too much of the revenue that it believes should be flowing to content creators:

Newspaper content makes up approximately two-thirds of the content on news aggregation platforms such as Google News, but many of these relatively new players in the digital ecosystem build audiences and generate revenue from newspaper content with little if any revenue coming back to those who have invested in creating the original content. Today, the news media industry invests roughly $5 billion each year in long-form investigative journalism. Our nation’s copyright laws must be structured and implemented in a way that allows for a return on this massive investment. Today, outdated interpretations of copyright laws mean that the industry is currently forced to give away much of its product for free. The government needs to put in place copyright protections that allow news organizations and other content creators to fairly benefit from their critical efforts and investments.

It also argues that fair use should be constrained in order “to prevent courts from undermining the Constitution’s encouragement of compensation to entities that generate creativity and productivity.” Needless to say, these changes would face strong opposition from both tech companies and those who argue that the broad ability to quote news articles across platforms has enabled robust democratic discussion.

Trump’s relationship with the media has been, shall we say, less than warm, but with its pushback against regulations, the NMA hopes to find a kindred spirit in the Oval Office. Trump has railed against regulations and called for both the repeal of old rules (particularly those that he believes slow job creation and hiring) and a temporary ban on the creation of new regulations. “We are cutting the regulation at a tremendous clip. I would say 70 percent of regulations can go,” Trump said at a town hall event in October (though an advisor scaled that number down to 10 percent). “It’s just stopping businesses from growing.”

The NMA is also seeking some tweaks to the tax code. Boyle pointed to Section 199 of the Internal Revenue Code, which gives tax deductions to companies that manufacture products in the U.S. The rule is a big advantage for newspaper companies that still print physical papers, but it doesn’t apply to the investments these companies are making to build up their digital operations, where the tax deductions don’t apply. The industry wants the tax laws to be more agnostic to the platform in which content is delivered. “We’re in the business of manufacturing a digital product — the tax code needs to reflect that,” Boyle said.

Beyond big regulatory changes, the newspaper industry is also looking for the administration to agree to its stances on media transparency and free speech. Even before taking office, Trump attracted the ire of reporters by ditching his press pool on multiple occasions. While there are no official rules against the practice, reporters say giving the press pool uninterrupted access is key to reporters being able to do their jobs and keep the American public informed.

Likewise, the NMA wants the new administration to take seriously the importance of the Freedom of Information Act and give reporters regular access to the president and government officials. The George W. Bush administration, for example, was considered by some to be relatively hostile to FOIA, and even told federal agencies that it would defend them if they were sued over not complying with information requests. The Obama administration’s initial promises of increased transparency have fallen short in the eyes of journalists concerned about leak investigations and other actions, though Obama did sign the FOIA Improvement Act, which codified a “presumption of openness” for government records, earlier this year. It’s unclear whether Trump, who has repeatedly railed against the press, will take any of these concerns to heart.

But even these transparency concerns are, at their heart, really business concerns. “The heart of our business model is the journalism that we do. Anything that is going to chill news gathering is a concern to us,” said Boyle.

POSTED     Dec. 7, 2016, 1:26 p.m.
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