FTC Leaders Shoot Down CE Tax Proposals in Discussion Draft

FTC officials took issue Tuesday with media descriptions of how the agency works. It had come under fire from some bloggers and industry executives for including in a discussion draft for a Tuesday workshop proposals to change copyright law and to tax some CE devices to help subsidize the ailing newspaper industry (CED June 10 p6). “The authors of those articles and blogs don’t know the agency, and they've misdescribed what the agency has done and what the workshop is about,” Commissioner Thomas Rosch said at a workshop about journalism’s future.

The proposals were in a staff discussion draft that collected ideas presented to the commission, Chairman Jonathan Leibowitz said. The FTC hasn’t endorsed any, and some aren’t being seriously considered, he said. “Taxing anyone to subsidize journalism is just a nonstarter,” Leibowitz said. As a competitive watchdog agency, the FTC is “allergic” to antitrust exemptions and broad changes to copyright law, he said. Underscoring his point, Leibowitz said, “The commission would oppose any taxes to support journalism or subsidize any particular kind of journalism."

Confusion about the FTC’s draft had spread outside the commission. Gannett’s management heard from a shareholder concerned that the company was endorsing the proposals in the discussion draft “simply because I was appearing here,” said Barbara Wall, senior associate general counsel. She said she thought it was clear that the document didn’t endorse any of the proposals in it but still wanted “to set the record straight."

"Everywhere I go, when there are lights on, I have to say the following” disclaimer, Newspaper Association of America President John Sturm said: “'For the record the newspaper industry does not seek any direct or indirect subsidy.'"

The reaction to the discussion draft was typical of the distorted frame of reference many critics bring to media policy, said Steve Coll, president of the New America Foundation. “If you want to argue against changes in public policy, then you have to make a case for the status quo,” he said. “Do we really have a national consensus that the policy we've inherited is adequate to our needs? I think the answer is no.”