Time Will Surrender Reporter's Notes

But yesterday, Time said in its statement that it expects the release of Cooper's notes to "obviate" the need for him to answer Fitzgerald's questions and appear before a grand jury, removing the threat of jail. Fitzgerald may still demand that Cooper answer questions, however, leaving him the unenviable choice of complying or going to jail to protect a source whose identity had already been revealed.

A spokesman for Fitzgerald said the special prosecutor had no comment on his plans regarding Cooper. In court Wednesday, Fitzgerald did not waver in urging that Cooper be required to comply. He predicted that if Time handed over the notes, "that may sway Mr. Cooper to comply" with his subpoena.

The magazine, as part of a publicly traded corporation, Time Warner, is in a different legal position than an individual facing a court order, press advocates said. If corporate directors decided to defy an order, they could be accused of violating their fiduciary and legal duties to the company and become vulnerable to shareholder lawsuits.

Pearlstine said financial concerns had not influenced his decision, which he said he made without consulting Time Warner. "We were facing $1,000 a day -- that to me was not an onerous burden," he said. Hogan has left open the possibility of increasing the size of the penalty.

Edward Wasserman, a professor of journalism ethics at Washington and Lee University, called the results of the case a "disaster" for the media.

"Time Inc. appears to have caved completely, leaving the New York Times alone in resisting the subpoenas," he said. "And all for what? To support the principle that the political hacks who used a compliant columnist to attack a whistle-blower and destroy his wife's career deserve to have their identities concealed."

But Gene Policinski, executive director of the First Amendment Center, a free-speech advocacy organization based in Washington and Nashville, said the divergent positions of Time and the Times mirror reporters' views on the use of confidential sources.

"One of the aspects of a free press is we don't have a lockstep approach," Policinski said. "I have no doubt many reporters will not like Time's decision. But that's every journalist's decision to make under the First Amendment."