By Bruce W. Sanford and Bruce D. Brown
Saturday, May 16, 2009
Unless Congress embarks on far-reaching change in public policy to maintain the viability of journalism as it evolves online, we will soon find ourselves with the remnants of a broken industry incapable of providing the knowledge necessary to manage life in a complex world. Journalism does not need a bailout, but it does need a sort of "recovery act" to bring the legal landscape in line with today's publishing technologies.
The good news is that the transformational thinking needed to prevent the economic withering of the American press has begun: Sen. John Kerry held hearings last week on the future of journalism, and Sen. Ben Cardin has proposed helping media companies transition into nonprofit entities. While the Kerry initiative is an important first step, overlooked at the hearing was the way in which legal rules have defined business models on the Web. The law of the Internet was written for the technology companies seeking to protect their growth in a once-fledgling medium, not for the journalism outlets that are now handicapped trying to survive there. Regulatory reform is needed because the playing field has become so uneven.
The Internet innovators that have thrived online enabled their own success as early as 1996 by securing immunity from defamation and other liability caused by user postings on their sites. Two years later, they persuaded Congress to add another exemption, this one for user postings that violate copyright law. These safe harbors have allowed companies from Yahoo to YouTube to prosper from the content they carry with little concern of being held accountable for it.
Google Chairman Eric Schmidt tells newspaper publishers that the answer for journalism is to "invent a new product. That's the way Google thinks." But Google's products (and profit) would look a lot different if, for example, the law said it had to obtain copyright permissions in order to copy and index Web sites. Search engines have instead required copyright holders to "opt out" of their digital dragnets, and so far their market power has allowed them to get away with it.
It is unrealistic to demand new business models from the press without giving it the legal tools to succeed. Here are a few things Congress can do:
-- Bring copyright laws into the age of the search engine. Taking a portion of a copyrighted work can be protected under the "fair use" doctrine. But the kind of fair use in news reports, academics and the arts -- republishing a quote to comment on it, for example -- is not what search engines practice when they crawl the Web and ingest everything in their path.
Publishers should not have to choose between protecting their copyrights and shunning the search-engine databases that map the Internet. Journalism therefore needs a bright line imposed by statute: that the taking of entire Web pages by search engines, which is what powers their search functions, is not fair use but infringement.
Such a rule would be no more bold a step than the one Congress took in 1996 rewriting centuries of traditional libel law for the benefit of tech start-ups. It would take away from search engines the "just opt out" mantra -- repeated by Google's witness during the Kerry hearings -- and force them to negotiate with copyright holders over the value of their content.
-- Federalize the "hot news" doctrine. This doctrine protects against types of poaching that copyright might not cover -- the stealing of information not by direct copying but simply by taking the guts of the content. While the Internet has made news vulnerable to pilfering because of the ease of linking from one site to the next, the hot-news doctrine has limited use because it is only recognized in a few states.
Now that many news aggregator sites have taken "linksploitation" to a commercial level by selling ads wrapped around the links they post, Congress has the incentive it needs to pass a federal law protecting hot news. Such a law would give publishers an additional source of legal leverage outside of copyright to demand fair compensation for the content they create.
-- Eliminate ownership restrictions. Media insolvency is a greater threat today than media concentration. Congress should abolish caps on ownership of broadcast stations and bars on newspaper and television ownership in the same market. These outdated rules belong to an era when the Web was a home for spiders.
-- Use tax policy to promote the press. Washington state is taking a lead in the current crisis with legislation signed into law this week to slash business taxes on the press by 40 percent. Congress could provide incentives for placing ads with content creators (not with Craigslist) and allowances for immediate write-offs (rather than capitalization) for all expenses related to news production.
-- Grant an antitrust exemption. Congress first came to journalism's defense with antitrust relief in 1970, when it permitted endangered newspapers to combine their business operations without fear of antitrust suits if their newsrooms remained independent.
As noted in the Kerry hearing, publishers need collective pricing policies for their Web sites to finally break out of the expectation of free content that is afflicting the industry. Antitrust immunity is necessary because most individual news sites can't go it alone by walling off their content for fees -- readers will simply jump to sites that are still free.
A temporary antitrust shelter would serve the public interest by enabling the industry to take steps today to preserve for tomorrow the journalism that benefits us all.
Bruce W. Sanford and Bruce D. Brown are partners in the Washington office of Baker Hostetler. They specialize in media and First Amendment law.