One of the Carter administration's top law enforcement officers said yesterday that local newspaper monopoly "is not a desirable condition" but that "the stifling effect" of such monopolies throughout the nation "is not well appreciated in Washington."
Deputy Solicitor General Stephen Barnett urged his own Justice Department and other government officials to look into such industry practices as selling news features and columns on an exclusive basis in various markets and advertising rate structures that offer reduced rates for combined morning and afternoon publications.
Barnett also condemned as restricting new competition the joint-publishing arrangements in some cities that were sanctioned by the Newpaper Preservation Act, a law designed to save separate editorial voices of econonmically "failing" newspaper.
Although Barnett emphasized that he was speaking solely as an individual, with no Justice Deaprtment responsibilities that are related to the newspaper industry, his remarks were some of the strongest ever made by an Executive Branch official on the controversy surrounding the growth of newspaper chains.
Barnett spoke yesterday to the Federal Trade Commission's symposium on media ownership, at which he contended that policy makers here are more concerned with national news where "there is a relative plethora of competing media voices-of available ways to get information or opinion before the public."
But this is not thecase, "with respect to information and opinion on local matters, in the overwhelming majority of American cities," Barnett delcared.
Barnett, a law professor on leave from the University of Cazlifornia at Berkeley, argued that the newspaper industry itself may have "significantly propelled" the current trend toward ownership concentration through its own practices and that "even at this late date, it may be possible to protect the remaining daily competition and to restore at least some forms of newspaper comptition."
Today, competitively owned newspapers are published only in 35 of the 1,536 cities with daily papers. Less than 170 companies that publish two or more dailies now own 61 percent of the nation's dailies.
One way to foster new dailies, Barnett suggested, would be to change regulations of the Small Business Addministration that now prohibit loans for newspaper companies. While established metropolitan dailies are aided by the Newspaper Preservation Act, "it is hard to see why loans should not be allowed to small newspaper businesses . . . there ought to be some limit on the government's partisanship in the newspaper market," he told more than 200 participants in the FTC symposium.
To Barnett's strong words were added those of SEN-ELECT LARRY PRESSLER (R-S.D.), who spoke briefly at the meeting to announce legislation he plans to introduce next year designed to break up newspaper chains and other media onwers.
"The most abusive monopolies in our nation are chain newspapers and media conglomerates . . . the independent editor and newsman are threatened with extinction," he delcared.
He repsonse to Pressler's announcement of legislation still being written, apparently as an amendment to antitrust laws, the American said yesterday that such a bill "would face the gravest of constitutional challenges within the Congress and from the courts were it to interject government control or influence into ownership and operation of free press newspaper . . . the drafting process should serve to expose these insurmountable constitutional barriers."
Although the publishers' trade group refused to take part in the FTC media probe, unlike the braodcasting industry and book publishers, representatives of ANPA have been in the audience, monitoring the symposium.
Despite the publishers' opposition to the regulatory agencyhs program, two publishers joined yesterday's panel and they denounced Barnett's suggestions. Separately, a California economist provided details f extensive research about one-newspaper cities-concluding that the principal cause for dying competivie papers has been the multiplication of other media and news sources, making direct government intervention "neither useful nor desirable."
John Seigenthaler, publisher of the Nashville Tennessean, charged that Justice Department official Barnett's view about joint production facilities for newspaper in 22 cities, "simply is based on a position that ignores the reality of what's happening in this industry." He said they have been necessary to preserve diversity.
At the same time, Seigenthaler warned it is "inevitable" that publicly owned newspaper companies will become targets for takeovers by other conglomerates. "I would feel more nervous about Gannett Co. (owner of 78 dailies) if Mobil Oil takes over . . . it is a very real threat," he asserted.
George Kuser Jr., president of American Newspapers Inc., said he also "disagree strongly" with Barnett on the matter of combined advertising rates. He contened that the ad marketplace had changed dramatically in recent years to the point where national advertisers virtually dictate newspaper rates.
James Rosse, an economics professor at Stanford University, said critics of newspapers overlook compeition that exists between newspapers published in other communities. Although a major city may have papers owned by a single publisher, they compete with other weeklies and dailies in their metropolitan areas, he said.
Costs of production makes it inevitable that dominant newspapers will emerge-depending on how well they produce the most preferred product, he argues. Unless a competitor can carve out a separatt market with distinctive editorial services and sell enough newspapers to make a profit, Barnett said, only one large metropolitan publication can survive.