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Monday, June 20, 2011

Opinion: The Ultimate Man-Bites-Dog News Story

The FCC decides government should leave the local news industry alone

Opinion From L. Gordon Crovitz, wsj.com
"A strange thing happened in Washington earlier this month: After spending two years studying an issue, a federal agency published a 475-page report documenting the problem only to announce that government is not the solution.

"Just because we have identified a problem does not mean we can solve it," Steven Waldman, the lead researcher for the agency, told me last week. "We did not feel we had to show some big regulatory pot of gold at the end of the rainbow to prove this work had value."

This act of government humility was committed by the Federal Communications Commission (FCC), which as part of its mandate to oversee broadband access and its effects analyzed the sharp decline in news reporting at the state and local levels. The Internet led to this decline by undermining the business models of local newspapers.

FCC Chairman Julius Genachowski set expectations for new policies when he announced this study and chose as his adviser Mr. Waldman, a former journalist who has worked at this newspaper and was a co-founder of Beliefnet.com. But Mr. Waldman says he and Mr. Genachowski concluded that "the First Amendment circumscribes the role government can play in improving local news" and that in any case "government is simply not the main player in this drama."

Drama is a good word. The FCC study, "Information Needs of Communities," is a thorough account of the decline in local news. Advertising, long the leading source of local newspaper revenue, has fallen by half. Advertisers now use online search, free online classifieds and other targeted marketing options outside traditional media. Ad rates for news sites fell as online page views multiplied. As revenues collapsed, local newspapers cut back news staffs by up to half...

...The FCC observes: "Communities now have more news distribution outlets and, simultaneously, less accountability journalism"—meaning coverage of state legislatures, city councils and school boards. Bloggers and people commenting on Facebook and Twitter add opinion and perspective, but few are able to break news."
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Gordon Crovitz is a media and information industry advisor and executive, including former publisher of The Wall Street Journal, executive vice president of Dow Jones and president of its Consumer Media Group. He has been active in digital media since the early 1990s, overseeing the growth of The Wall Street Journal Online to more than one million paying subscribers, making WSJ.com the largest paid news site on the Web.

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