FTC to Examine Possible Support of News Organizations

By BRENT KENDALL And THOMAS CATAN

WASHINGTON –The head of the Federal Trade Commission said Tuesday the agency will study whether government should aid struggling news organizations, which are suffering from a collapse in advertising revenues as the internet upends their centuries-old business model.
FTC Chairman Jon Liebowitz's comments came during day one of a two-day "workshop" sponsored by the agency that became a forum for arguments among the heads of a diverse array of news organizations over the future of journalism.
Mr. Leibowitz said his agency will examine whether government should change the way the industry is regulated, from making news-gathering companies exempt from antitrust laws to granting them special tax treatment to making changes to copyright laws.
The Federal Communications Commission is already reconsidering rules that prevent a company from owning newspapers and TV stations in a single market.
Mr. Leibowitz said other ideas include extending government subsidies to commercial news organizations, granting them special tax treatment or an exemption from antitrust regulations
While cautioning that changes in the news business must be much better understood before any policy changes are made, Mr. Leibowitz said: "We should be able to take action if necessary to preserve the news that is vital to democracy."
Mr. Leibowitz's wife, Ruth Marcus, is a columnist for the Washington Post, a fact he disclosed during the meeting.
Media executives said they might welcome some relaxation of antitrust and tax rules, but they also expressed wariness of government intervention in the news business.
"I think the message from today is be very, very cautious before you do anything," Mr. Leibowitz said in an interview.
News Corp. Chairman and Chief Executive Rupert Murdoch said at the FTC workshop that media companies need to do a better job of convincing consumers that high-quality journalism isn't free. "Good journalism is an expensive commodity," he said.
Mr. Murdoch created a buzz last month by saying that News Corp. may block Google Inc. from searching its news sites. He didn't mention the company by name Tuesday, but criticized Internet sites that profit from reusing news articles published by others without bearing the costs.
"To be impolite, it's theft," he said. News Corp. owns the Wall Street Journal.
Arianna Huffington, editor-in-chief of the Huffington Post, followed Mr. Murdoch and blasted his criticism of Internet sites like hers that collect and link to news content from other providers. Ms. Huffington said her popular Web site drives a great deal of online traffic to The Wall Street Journal.
"It's time for traditional media companies to stop whining," she said.
Google and other Web companies say they help news organizations by referring Web users to their sites. "The reality is that the vast majority of publishers want to be discovered," Josh Cohen, senior business product manager for Google News, said at the FTC event. Mr. Cohen said it was technologically very simple for a publisher to instruct Google's Web crawler not to index its news site.
Federal and state officials this year have explored how the government might play a role in helping ease the financial travails of news organizations. Sen. Benjamin Cardin (D., Md.) this spring proposed a bill that would allow newspapers to operate as tax-exempt institutions. Congress has held several hearings about the financial challenges facing the industry.
Previous government salves for the news industry have had limited success. The Newspaper Preservation Act of 1970 paved the way for ailing newspapers in the same city to share costs. Critics of these "joint operating agreements" say the law helped preserve multiple newspapers in cities that no longer were able to support them, reducing both papers' chances for survival. JOAs in cities such as Denver and Seattle have been among the first casualties in the newspaper industry's recent woes.
—Shira Ovide contributed to this article