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All the News That’s Fit to Control

June 4, 2010 ,

Last week, the Federal Trade Commission released a draft report on the future of journalism.  This report consists of a summary of various policy proposals, ostensibly to save journalism, submitted by stakeholders and participants.  Unfortunately, three of these proposals would “save” journalism by improperly expanding IP rights in news and in facts.

At the root of all of these proposals and the FTC’s inquiry is the reality that many major news organizations are simply unwilling to alter their business models to thrive in the digital age.  Worse yet, they are seeking government protection to preserve those business models.  Yes, the Internet has implicated IP rights for news organizations and others alike.  But what is truly threatening traditional news organizations is the increased competition the Internet has cultivated.  In reality, however, news organizations are not the only ones who now have to compete with more content providers.  Radio stations, musicians, and artists all have to compete with large and small operations from around the globe.  But robust competition leads to better content and more efficient, dynamic content creators.  The FTC should welcome this competition, as it means that the market is working.

Instead, the FTC’s endeavor is more about preserving the antiquated models of news organizations, devised when news traveled over telegram before hitting the presses then landing on a subscriber’s front step, rather than preserving journalism.  The increased access to information and connectedness that the Internet provides should inaugurate the golden age of news. Unfortunately, the unenlightened policy proposals laid out in the report make it clear that, as for now, the major news players are not ready to enter the 21st century.         

Extending the Hot News Doctrine

Under the first proposal, the Copyright Act would be amended to either encourage development of hot news protection at the state level, or to create federal hot news protection.  Hot news protection essentially grants a “quasi-property” right in not the expression of news but, instead, in the facts underlying news.  In other words, a news organization is granted exclusive control, for some limited period of time, over the facts it collects or uncovers. 

Extending property rights over facts would have some troubling consequences.  Public discourse would be stifled, as a discussion of the latest headline could mean a transfer of facts in violation of a newspaper’s hot news rights.  Furthermore, extending hot news rights might, in grim irony, inhibit the development of the news industry itself.  News organizations often build off of the facts reported by other news media.  Extending property rights would injure both established news organizations and new entrants alike.  In inhibiting the spread of news by both news organizations and individuals, the extension of the hot news doctrine may also run afoul of free speech rights.  Creating property rights in facts would inhibit the free flow of information, leaving all more intellectually impoverished.

Limiting Fair Use
 
Under the second proposal, the Copyright Act would be amended to limit the fair use doctrine.  This would leave both aggregators and search engines without a powerful defense to infringement claims (and would reject the Ninth Circuit’s holding in Perfect 10 v. Google).  It is even noted in the report that one participant suggested legislation that would place caching, essential to efficient computing and browsing, outside the protection of fair use.

As with the extension of hot news protection, limiting fair use could also inhibit the development of the news industry.  Furthermore, as fair use extends to uses beyond news reporting – criticism, comment, and teaching, for example – the ramifications of this move would not be limited to the news industry.  While some news organizations may benefit from this limitation on fair use, innumerable artists, teachers, scholars, and others will be harmed.  Denying search engines the protection of fair use, and thereby limiting their functionality, would also severely damage the public’s ability to find and access information. 

Additionally, inherent in the proposal to deny fair use to search engines and aggregators is the assumption that these services are actually infringing.  This is a flawed assumption on the part of the FTC.  A URL is merely a fact, and thus does not violate copyright law.  It is a road sign providing direction to the content, not copying, performing, or executing any other sort of infringing activity.  It is true, however, that some aggregators may go beyond just linking, and instead just copy articles wholesale.  In these cases, an already existing right has been violated, so no adjustment to copyright law is necessary.

Licensing the News

The final proposal set forth by the FTC is to create an industry-wide news licensing scheme.  In order to ensure equal application and enforcement, such a scheme may be government run.  One proposed manifestation would require ISPs to make payments (which would come from increased fees to consumers) that would ultimately be disbursed to news content providers, if their content is used.

This proposal raises concerns that require further consideration.  First, this scheme could be merely an alternative way of limiting fair use.  The licensing scheme would extend control over uses of news information that would otherwise be fair uses, improperly limiting this defense.  Furthermore, this policy runs the risk of becoming overgrown.  We might be convinced that a single, low-fee licensing scheme that encompasses all content serves the public interest.  However, if every content provider begins to seek its own licensing regime, each with its own fees to be paid by the subscriber, the cost of Internet access will skyrocket.

In light of these proposals, we need to ask why the FTC is engaging in this enterprise.  The FTC has no copyright expertise.  It has no legislative power, so it cannot alter the copyright law.  Preserving antiquated business models is a mistaken end.  Ultimately, the FTC’s report, though supposedly providing answers, leaves us only with scores of questions.