LAMPpost

When a citizen signs a petition to place an initiative on the ballot, is he or she acting as a voter or as a legislator?

Chime in!

The ABA Journal discusses what it calls “the U.S. Supreme Court’s first major test of whether the war on terrorism conflicts with the free speech principles of the First Amendment.” (…what took y’all so long?!)

“I am opposed to violence of all sorts. It seems crazy to me that I could go to jail for trying to persuade people to use nonviolent means to achieve their rights,” says Fertig, now 79 and president of the Los Angeles-based Humanitarian Law Project, a nonprofit human rights organization begun in 1985. Holder v. Humanitarian Law Project (click for briefs) is scheduled for oral argument on Feb. 23.

Stay tuned!

It’s no secret that I’m wildly, terribly, and insanely in love with Wikileaks.

The controversial whistleblowing platform publishes anonymous submissions of governmental, corporate, and organizational documents, and is dedicated to exposing oppressive regimes and revealing unethical behavior. The great thing is that they’re actually good at it: they released the Standard Operating Procedures for Camp Delta at Guantanamo; Sarah Palin’s Yahoo! adventures to circumvent public records laws; Climate Research Unit emails; internal reports on toxic dumping in the Ivory Coast; Internet censorship lists from across the globe; telephone intercepts of Peru’s “Petrogate”…you name it, and they’ve got dirt on it. Everyone from Julius Baer to the Scientologists have tried to shut ‘em down — whoever they are — and their general badassery has always prevailed.

Until now.

The Paypal-flaunting, UN-report-leaking, The Economist New Media Award-winning, military-grade-encrypted bastion of accountability, transparency, and all else that is good in this world has been brought to its knees by BUDGET CUTS.

Sigh…

There are some things we know nothing about until someone sues someone else.

(I’ll forgive you if you’re thinking about marital disputes…)

In the newsgathering context, this is extremely important. Well-heeled interests make a regular practice of hyper-secrecy as a way to preserve competitive advantages.  Litigation often provides the only vehicle for reporters to find stories on poorly understood industries who operate behind a veil of secrecy, hiding issues of extreme public interest.

Case in point: the New York Times’ recent story on the menopause drug franchise among major pharmaceuticals.  From the article:

The documents that have surfaced in the Wyeth cases offer a rare glimpse inside the file cabinets and hard drives of a major drug company. And the cases demonstrate the importance of litigation in detailing exactly how drug makers operate their businesses, says Dr. Jerome L. Avorn, a professor of medicine at Harvard Medical School who has written about the subject in The Journal of the American Medical Association.

“The information coming out in litigation helps us understand how a belief in a ‘protective benefit’ of estrogens on the heart was able to spread like wildfire through the medical community,” says Dr. Avorn, who is not involved in the Wyeth litigation.

If nothing else, this ought to remind us how threatening sealing orders are.  Litigation is often the only way we learn about matters of pressing public concern, and sealing orders threaten not only potential victims, but professional communities who rely on accurate information about industry practices and products.

Dr. Avorn’s article, “The Role of Litigation in Defining Drug Risks,” should push us to think very hard about a different aspect of the public’s interest in unsealing in the context of medical litigation.  Plenty of sealing cases accept the direct risk to the public as a dispositive public interest–doctor-patient sexual assault cases are the obvious example–but we should not hesitate to consider the derivative benefits to the medical community as well as a compelling rationale for unsealing.

As more Doe cases reach appellate review, I have to wonder if it would be possible for a news website to assert reporter’s privilege to protect the identities of online commenters.

Here’s how the argument would run.  The commenters are “sources” who provide information to the “reporter” in presumptive reliance on pseudonymity. The reporter “collects” the information via the comment platform of the outlet’s website. As local news sites in particular increasingly rely on community commentary to generate leads and developments in stories, this application of a reporter’s shield law may provide news sites with a way to protect contemporary newsgathering practices from being chilled by defamation suits.

More to come–this may bear thinking about.

It’s an honor to be liveblogging the final panel, featuring Linda Greenhouse, David Carr, Marcia Chambers, Bill Mitchell, and Ari Paul, and moderated by Emily Bazelon.

Linda Greenhouse observes that the Harvard Crimson created an endowment to subsidize students who otherwise would have had to do work-study at other parts of the university. Describes the benefits and burdens of life on the web. LG could not be doing what she’s doing now re the Supreme Court without the Internet (e.g., new Guantanamo posts on SCOTUSblog, How Appealing). In the past, there was only the information that journalists chose to write about, but now, through websites and blogs, you can get a nearly real-time idea of what’s happening from court to court, in terms of orders, transcripts, and conversations among people with similar interests. But there are also burdens. (1) Quick turnaround time for reporting precludes having a few hours to think about the opinions that have just been handed down. Have moved from a contemplative posture to posture that more closely resembles coverage of a football game. (2) A second challenge is how to add value: if anyone in the world can read the opinion/briefs/arguments at same time you can, you have to do more than simply duplicate those. Hard to justify paying for something that is free. But websites can create model where you can *read* everything for free and to participate in the conversation, you have to pay something.

David Carr calls it a worthwhile thought exercise to think about what US public understandings of the Supreme Court would be like without the past 30 years of Linda’s work. He will attempt to make sure that his presentation does not “suck.” Where I am as a reporter, things are very murky, and you realize you’re in a barrel about to go over a waterfall. You examine the barrel’s efficacy and preparedness for after the fall; the barrel we’re in is not fine. There’s an air of uniqueness at NYTimes newsroom, but the mood is still one of dread, excitement, and fatigue; people are happy to have a job. File and face-plant paradigm: do a story, video, facebook/tweet about it, try to get into every platform as fast as you can. But you end up being at an event and not experiencing it at all. I love what I do but I don’t want my reporting to be thin and stupid; there’s an explosion of pixels in content, editorial, and advertising, and there’s *so much content*. I can’t make a living doing $20/story rates. A person like me is the result of a legacy business model; Craigslist shot off the back-end of the media biz (classified = 40%); regional monopolies gradually eroded by insurgent technologies. I am overpaid in the current paradigm; this is an artificial construct, as explained by Clay Shirky earlier. Advertisers pay for scarce assets and adjacency, but on the web there’s no scarcity, and adjacency is much broader. In Ken Auletta’s book about Google, search advertising is explained to old media rep, who responds, “you are fucking with the magic.” Other than lining pockets of shareholders, the legacy models produced great journalism; it’s not just expensive to execute journalism, it’s also expensive to defend (e.g., prison innocence articles). All these wonderful hybrid citizen models have to understand: after you write a good story, “you better put a nut cap on and you better hire a damn good lawyer!” I’m a believer in citizens and collaboration, but you have to be ready to defend your work as well. Kraft, Bank of America, etc all produce workarounds to what media does. Holds up laptop: this contains far more resources (if you assume the cloud) than any other newsroom I ever walked into. It makes me so much more powerful than I ever was when entering the business. 17M+ users is a huge audience that we’ve never had, and a very powerful tool in the hands of a journalist. I do 1 minute podcasts from my basement every morning. The problem, though, is that space is infinite and you need to fill it. Both my toolbox and my heart is full. We have been developing a common dialogue over production of news; the web allows you to listen so much better; I have targeted RSS feeds, when something is important, it finds me. I like what I do, and I want to develop new business models; but I don’t want to put on a sandwich board that says “will write for food.”

Marcia Chambers: like LG, I was fellow at Yale, and many of our fellow graduates are out in the field. I made leap, however, from print to web, with creation of Branford Eagle. A lot of the conversations I had were related to political transformation in local politics; I called New Haven Independent and Paul Bass, and I started writing without any clue as to how to write online. Published story called “Dark Side,” that began coverage of what was happening in Branford town politics. People began writing to me and asking me to keep up the good work; I began bringing tape recorder to meetings so as to ensure there was context; many people *didn’t* like this, as seen in story “Enemy of the Press.” One thing I’ve learned is how different the web is; esp w/r/t linking, e.g., property tax article. Annie Le case was fascinating for revealing separate forces in law as pertaining to print (libel) and web (more of a wild west regime). Two separate versions, due to different legal issues. The local press did well because they are repeat players in a case that occurred in our community; we kept breaking stories left and right *because we were here*. In 3 years since Eagle founded, a lot of local stories, and quick comments from audience. People no longer wait for the news. Stories about feral cats in Branford.

Bill Mitchell: as speaker #38, I feel obligation to return to Dean Post’s framework. “Routinized circulation of texts” required as democratic core of what journalism represents in democracy. In 1993, I was working at San Jose Mercury News–we had a paywall in partnership with AOL, for $9.95 for the first 5 hours, and $3.95 for subsequent hours. Didn’t work very well–was owned by Knight Ridder back then. In the undergraduate dorm where I live, I find that 3 of 450 students have newspaper subscriptions. Any debate whether transition has taken old becomes academic, when you look at how people are consuming news. Dean Post’s idea, in context of what’s happening in Detroit & Ann Arbor–news orgs are disrupting old routines of circulating fundamental texts and starting new ones. Penny Abernathy made point that job #1 for news orgs is to shed legacy costs, but these costs must be shed as part of strategy for migrating readers from old to new platforms. It’s harder than just asking people to move, b/c we ask them to change routines that they really care about. Detroit cut back from 7-day/wk to 3-day deliveries. Other option is to read papers & e-editions online. But in Detroit, people are losing not just newspaper habit but also the *news habit*. This interim period is messy: Detroit needs public-service journalism, and we need to wrestle with these consequences. Ann Arbor experiment is even broader: newspaper shut down entirely; quick shedding of legacy costs in move to annarbor.com. Old newsroom had 66 reporters/editors; new had 28, paid less than they were in print newsroom. However, they are thinking more about reader’s experience of the news; newsroom no longer set up as fortress, instead first floor is now set up as a coffeehouse where readers can interact with journalists face to face. So question remains: what kind of routines will replace the old routines, and how we’re going to pay for it.

Ari Paul: works for Chief (Leader) newspaper covering public sector workers in New York City. Reflecting on conference as someone just at beginning of career, I thought about how 40 years ago I would be perceived as a sort of public sector worker, but now I am perceived more like an actor, or a full-time activist, or a starving artist. One thing not often brought up at this conference, and sometimes avoided, was how news orgs are going to act as employers. W/r/t collective bargaining, compliance with labor law, etc. Yesterday president of CNN commented how many people are willing to do journalism without needing money–this has created wage deflation. In my job as a labor columnist, no one is getting paid for working in my area. The lesson we should take from this is that we should focus less on how to cheaply extract labor in creating revenue streams, and more on how to create real careers for people starting out in their 20s. We need to keep people past their 20s so that they commit to making a new media model.

QUESTIONS FOR PANEL:

Emily Bazelon: one thing we’ve been talking about is authority, how people know about authority, linking/ranking/etc. This is a function of personality: it puts pressure on journalists to be out there with Twitter and fan-feeds and be less anonymous. Is it OK if journalists are becoming more like actors, or is this a perversion of the role in some way?

Linda: The Times used to have a policy that seriously disfavored people appearing on Sunday morning talk shows, etc. Now it’s completely the opposite. During Bush v. Gore, the Times PR people kept feeding me media requests; I finally demanded a raise, which in those days you could still get. Other side: if people are supposed to be personalities, the old constraints–you’re not supposed to have a thought in your head about the event you’re covering–are diminished. When I said Bush admin had created legal black hole in Guantanamo (at private event), was reprimanded by NY Times, but this seems outdated now.

David: In the course of spreading versions of yourself around, no one would have any interest if my last name wasn’t NY Times.

Emily: can’t you take your own brand past the Times, now?

David: that’s not an experiment I would run now. An editor recently called me up and said they didn’t like how I was addressing issue on Twitter, and I said, “that’s not really yours, it’s mine.” My objective has always been to fit in, not to stick out.. but my objective has become more to stick out, recently. Although some of the most important people at the Times, you’ve never heard of and never will.

Marcia: I don’t do much Twitter. If people are really interested in what you’re writing, they’ll read it. It’s all about what you’re covering. I do have Branford Eagle community TV show, where I interview public officials from town and talk about column events.

Ari: it’s more peculiar for me because I’m in niche media market where I’m one of the few people willing to listen to union leaders.

Bill: current NY Times public editor went so far as to make contribution to story funded by outside group. Values changing.

Edwin Baker (from audience): what do you think generally about the conversations at the conference? There have been a number, which fit into different boxes. One kind of conversation is how to have an economically viable business model, a second kind is how to have a media that serves society, a third kind is what’s likely to fall out of all this. In the second conversation, two divisions: Yochai Benkler’s works previous to Wealth of Networks, including works on copyright, show how certain copyright laws favor different sizes of actors & discourses: commodified vs. non-commodified. Some debates are whether we want more or less commodified; other debates are how we can make either of those discourses more ideal.

Bill: a tax break that would reimburse news organizations for # of reporters, might perpetuate journalism as it’s always been done, and not produce the kind of journalism society really needs. We need some pressure to respond to what people are asking for.

Linda: some of the new ways of delivering information are resources, and others are distractions for people trying to do journalism. E.g., PR push, overflowing inbox with requests to quote law firm partners and write about certain cases. Towards end of my time in daily journalism, it was like swimming through molasses to get through the day of a major case. This environment requires different skill-sets of attentiveness–knowing what to ignore; knowing not to go on Google Blog Search to see what someone’s saying about you.

David: as a media reporter, this is extremely exciting time. For 10 years, kept hearing sky was falling, but nothing happened; but now, a grand piano is hurtling towards our heads. Gawker, Pro Publica & NY Times, etc — these are new models and collaborations; we’re in a more-than-theoretical state, and the work is underway. Legacy media is going to have more trouble walking back to a state where they can make a living; there’s going to be more new media forms built on the business. If it’s going to be good, it can’t just be done for the love of it, because you’re going to work your ass off over and over.

Marcia: I’m the only one on the cutting edge; we’re very dependent on gifts, donations, etc. We never know if we’re going to be funded. But I believe that the people of Branford really want and need what I give them; we haven’t given up old-fashioned reporting skills, we rely very little on the Internet. It’s a great new day for journalism. We need a new financial model to get us there.

Emily: Thanks.

Howdy everyone. This is Betsy Cooper, your humble rapporteur for the government subsidies panel. Our illustrious speakers for this panel, moderated by the ISP’s Nic Marais, include:

- Edwin Baker, University of Pennsylvania Law School

- Bruce Ackerman, Yale Law School. His paper is available here

- Stephen Nevas, Yale Information Society Project & Knight Law and Media Program

- Susan DeSanti, Federal Trade Commission

Steve Nevas introduced the panel, and handed it over to Nic, who is listing some of the amazing ways you can keep in touch with our conference, including here and on Twitter. He received the New York Times this morning on his doorstep, even though he doesn’t subscribe. Is that a good sign? Hope so!

Nic notes there have been 230 million ipods sold in the past 5 years. We had no youtube, iphones, and many did not have facebook. It will be amazing to see how things change in the next five years.

Here we’re discussing federal subsidies; Nic is doubtful about the pay models discussed yesterday. He then introduces the panel, and hands it over to Edwin.

Edwin Baker

Edwin first claims that the market cannot provide the professional journalism that people want and need. The claim is not that business models will not provide us some journalism – they do – but will it be as much and as good as we want? His claim is also not related to the current digital age. It relates to the structure of media products. We’re always been dependent on subsidies.

There are a variety of ways in which markets fails. When value goes other than to the consumers, and there’s no relationship between the benefitters and the firm, there is no incentive to provide such a value. If customers are only a small portion of people who benefit, there are inadequate incentives for production. Probably the most obvious way to see this is journalism’s impact on reducing corruption. The benefit goes to all members of the community, not just those who bought the newspaper. News production and consumption result in less corruption, which is a benefit to everyone. But this can even hurt the newspapers; there will be less stories. These are externalities that don’t produce revenue for the journalistic unit.

Similarly, to the extent that journalism produces intelligent voting, it is a benefit which no one pays for. From the beginning of the country, as a result of these pressures there was huge subsidies of newspapers through the postal system. In Morgan v. Lewis, the subsidy cited there today would be worth $6 billion (!) dollars.

This is not due to a lack of interest of the public in news. Most of the decline has not been an evaporation of audience – these have been replaced by online readers. (Though we do not yet have good data on these points). In the last 10 years, the amount of the public that doesn’t pay any attention to news has gone from 14-19 percent, as we hear yesterday. This is a relatively small decline compared to newspaper circulation.

There could be a partial explanation due to a degradation of the product. We might not have an incentive to keep newspapers when the quality decreases. If you fire your reporters and sell for the same or higher price, you should be expected to lost audiences. Costs of keeping audiences may no longer be worth revenue. Those papers which add journalists and keep prices have increased circulation (though not enough to keep at speed of costs). So the key is that it’s not economical to keep up producing newspapers, not that there is no audience for this.

What are the results?
1) Bankruptcy; 2) Closures; and 3) Layoffs.

1) Bankruptcies are irrelevant. This is mostly because of bad debt which the papers can’t pay. They will go through reorganizations.
2) Closures. Rocky Mountain News, etc., are closing, but these are mainly two newspaper towns. That model hasn’t been viable in the past 100 years.
3) Reduction of journalists. We should be concerned about how this affects quality.

There is also the reduction of advertising, unsurprisingly in this recession. This is a short term problem. But there’s also a long-term problem-that there’s a fixed amount of advertising money. If it doesn’t go to media, but onto other sources like Google, then you have a crisis in the media. Google is not creating new media. Similarly, classified ads which do better independently take money away from the media.

What should be done? A tax credit for 1/2 the salary of their journalist. This would decrease the cost to papers of keeping journalists. Assuming a subsidy of $25,000, that would be 1.5 billion. This is much smaller than the 6 billion subsidy by postal service cited earlier. Note that at that time, the problem was more about distribution. Today, it’s more about content.

Bruce Ackerman

He and Ian Ayres suggest putting together an optional box where they can affirmatively click to say the article increased their understanding of public interests. This will then translate to a government endowment. The more clicks, the more payment.

This has only a few exceptions. Government should not support libel. Assets will be on the line, so will require serious factchecking.

To avoid scams, the reader must be a real person. Reader will have to spend exercise answering simple questions or type in random words. Only those which are truly enlightening articles will compel people to do this work.

This will create incentives to publish articles with serious contents. A significant share will go to the political core of articles with serious concern. The point is to modify the market system, take full advantage of the new technology to get decentralized, individual votes.

This is part of a more general project about encouraging citizenship. Another example is patriot dollars; put credit card in and sign up for patriot dollars which allow you to send funds to candidates. We’re creating a context for citizenship. This is especially important in the context of Tocqueville and the notion that citizenship is declining. The citizen army is no more, public education is changing, etc. Other than voting, there are very few contexts where you understand yourself as a citizen.

One might compare this to more familiar models of public subsidy. One is the NPR-BBC model which is vastly inferior to this one. NPR/BBC is under the thumb, in principle, of a tyrannical government. We have to be designing an institutional structure, if we have government subsidy, which is tyranny-resistant. Under those models, the government can control the output of the public press.

How can you pitch to funders that this is more important than helping the poor, the environment, etc.? The answer is that we’ll be more effective advocates for your cause, as stated in the last panel? This is an affront to the history of journalism. Journalists are supposed to investigate, not advocate. The problem would be that you would not be able to report on the positive nature of the immigration system if sponsored by an immigration reform group.

The market-like mechanism he suggests is very flexible. It has no monopolistic intentions. It is significantly different and better, and should be seriously considered.

What about political feasibility? There are two forms of liberalism: laissez-faire and activist. He believes in markets but he is an activist liberal, like President Obama and Cass Sunstein. This would not be a fair description of Reagan, who is laissez-faire; serious people can disagree about this. The case for activist liberalism is strengthened if you can avoid government pressure, as in this case.

So the political feasibility problem here means we should move to a model which is more market-like but recognizes that the invisible hand is flawed at protecting professional journalism.

Stephen Nevas

Who pays for what you consume on the web? Advertisers in part, but not you or your neighbors. The picture yesterday was the implosion of local news. Thousands of journalists have been sent packing, and the institutional history is disappearing. The “emaciated flesh and bone” of the institutions that protected our democracy have been sent to “the slaughterhouse.”

This can be considered mailure in journalism. This is a market that by definition no one can be excluded. The costs are higher than those who pay for the goods. When the market fails and has an interest in protecting an industry (like finances and the auto industry), government may step in. Here, there are public interests, and the 1st amendment protects against government intervention.

This is not new for government. In the earliest days, postal rate privileges facilitated the movement of media and information. Government has not stood back. Player-piano technology led to new licenses so that those who created piano rolls would be protected. Similarly, copyright laws protects creators, and compulsory licences have been enacted for internet radio.

The problem goes back to paying the messengers. Government can and should act when the market failures. We have substantial precedent to do this.

One option is to enact a compulsotry licence and to register work at the copyright office, and to then distribute compensation like the copyright board. But this is clumsy and inefficient. He instead proposes a hybrid.

This would encourage groups to create copyright rights offices (CROs). This will require Congressional legislation to protect against anti-trust. He suggests that participating content owners should log downloads of sites, which would be cross-checked by sampling. This should involve both national and regional officers. Then distributions would be made to CROs. Content providers will not get full cost, and should supplement income with advertising and additional funding. One can also opt out if can go it alone.

This doesn’t pick favorites. And because money comes from homogeneous source, it will encourage new production. We need to be willing to think outside the box.

Susan DeSanti

Her views are her own and do not represent the Federal Trade Commission (FTC).

The FTC has announced it will hold workshops on these issues. Why are they interested in this topic, and what is the FTC’s approach?

Why is the FTC interested?

On the first question, Federal Communications Commission, Justice, and Anti-Trust all may have jurisdiction here. BUt the FTC has unique jurisdiction over issues of the US economy. The FTC was legislated in 1914. One of its important early functions was to gather facts and write reports, keeping an eye on the economy and publishing materials. In the 20th Century, FTC contributed to Radio Act of 1927 and the eventual establishment of the Securities and Exchange Commission. Since the mid-1990s, her policy shop has been involved in a number of activities. including patent law and brandname/generic drug debates.

The immediate impulse stems from the stories about journalist layoffs and bankruptcies. This phase of creative destruction would not normally produce FTC interest alone, because we ordinary would wait for a new equilibrium in the market. Here, there are market failures. So there might be a need for government policy to help in this area.

This past spring, there were requests for anti-trust protections for news organizations. Given market imperfections, could either respond in usual way (to say no) or to try to understand these markets. The Commissioners decided the latter, given the value of journalism to a functioning democracy.

How is the FTC approaching this?

1) This is not about saving newspapers but about the future of journalists.

2) The FTC is not a regulatory agency – they don’t impose regulations. Their job is to ensure that anti-competitive practices do not occur. Consumer should know what their options are, but they will not say what should or should not be sold to consumers. This is a free market approach with serious skepticism of government regulation. The FTC is not looking for an excuse to regulate in this area.

The first question is whether there is anything to do here. The data can be read in two ways; many newspapers in bankruptcy are still profitable. But there are long-term ad revenue questions as well. Do they need to do anything now?

If the Commissioners became convinced to act, this would follow a cost-benefit analysis for preventing market failures with as few transaction costs as possible. The proposals presented today do the same – looking at transaction costs, effectiveness of solution, difficulties of implementation, etc. The pharmaceutical drug debate was very similar. They are very aware of the complications of market failure.

Question and Answer

Bruce Ackerman suggests there are three models suggested here: tax law changes (Baker), public law model (Ackerman), and property rule model (Nevas). The question is what is the form of intervention that will best express the right values?

Edwin Baker suggests that Nevas’s proposal may not respond to the problems of market failures. There are merits to both his and Ackerman’s approach as well as disadvantages of each.

A commentator suggests that there is an icopyright program which embeds work with a tag. Nevas responds that this is before the Supreme Court.

Another commentator inquires how much of a ‘watchdog’ function is enough. We can never entirely prevent corruption. How do you decide?

• Ackerman responds that one should look at professional journalism. One benchmark is whether that practice is sufficiently sustained to sustain itself. This is not information, but about a professional journalist’s obligation and practice. If it sustains itself, that is the goal.
• Baker responds that one should look for responses to market failure. There will be disagreements about what level of corruption a greater marginal investment of journalism will prevent.
• Nevas suggests this is difficult for the government to do because we’re dealing with the market, so perhaps is best left to the the market.
• DeSanti suggests that while the FTC would normally be inclined to follow the market, the market failures make this problematic, not least because of existing monopolies. One should look at the product, revenues and costs. We’re not taking into account the positive externalities here. This is a conundrum. As a famous economist once said, there’s not enough evidence to get rid of the patent system, but there wouldn’t be enough evidence to create this system either.

A questioner from the FCC asks Ackerman, one funded out of general tax revenues, another from user fees. How would his be funded? Ackerman responds that he is moderately indifferent. If through the tax system, can be seen as a tax gimmick where actors can rip off the money. His program will be much more visible and represent the public commitment to citizenship public choice. On the revenue side, he would prefer taxing the internet connection in one way or another since that network is generating the revenue, but you could also sustain it with general revenues. The FCC questioner thinks financial feasibility is important, and that it seems like if everyone benefits based on the theory, everyone should pay. Ackerman clarifies that he is talking about the ideal professional journalist – which would be a force for reason in society. The language of citizenship is a distinctive language, and there is an interesting dialogue between these ways of talking.

The questioner says he has been raising money for public television from the government for most of his life. He is uncomfortable with the proposals. He thinks it’s fine to give tax breaks for journalists. But the other proposals have an odor of manipulation. by giving a reward for voting, as per Ackerman’s idea, you have to spend the reward in a specific way. He argues that if you want to give a present for voting, let the person spend it any way they want. Nevas’s proposal similarly makes everyone pay a hidden tax dedicated to serve a particular public interest. An appropriation would most explicitly point out how these are. Hiding taxes is problematic. Nevas and Ackerman respond by focusing on the development of the media industry and citizenship. Ackerman suggests that this is not manipulation, but creativity.

An audience member suggests the mechanism for funding in Ackerman’s proposal, clicking on publicly useful articles, is substituting consumer choice for public interest. Ackerman responds that you won’t do it unless you care because it has no value to you. Some have suggested to him that he should get funding for an experiment.

The final questioner suggests Baker’s proposal is a production subsidy to reduce the cost of journalism, when the externality is consumer-based. Would we be better subsizing consumers? For the panel at large, the questioner asks whether it is hard to identify who should be receiving the payments.

Baker responds he is not sure of the consequences of a production subsidy; because you can sell at a cheaper rate, it is essentially subsidizing consumption. Both he and Ackerman are trying to get more money into the production process. Baker’s is more confident in the professional editorial role. Under professional journalism, one characterization is that Ackerman’s proposal promotes pandering to the public rather than editorial decisions, even as it gets people more engaged. If you take into account benefits, Ackerman’s model benefits the consumers. Baker’s gives benefit to editorial staff. One would have to work out which one will best get at the problems, as well as which would be more politically viable. Ackerman’s public project and institutional requirement may be less viable administratively, even if it does engage the citizenry. Tax manipulations, made thoughtfully, can be more beneficial.

Ackerman responds that the advantage of his proposal is that it encourages non-traditional news organizations and collaborations. Clicks goes to news organization(s) that are creators of the content. It is easy to imagine collaborative transactions. The notion of the editor has the disadvantage of reifying the ‘newspaper’ which has organizational consequences.

We’re out of time, so thanks for reading. We’re now on a 15 minute break. Thanks to Nic and the panelists for a great session!

Greetings and salutations. This panel, moderated by Douglas Rand, will discuss the role of not-for-profit models and funding in the emerging ecology of news. The panelists are:

David Westphal, USC Annenberg
Bill Buzenberg, Center for Public Integrity
Robert Lang, Mannweiler Foundation
Patrick Kabat, Yale ISP
Nabiha Syed, Yale ISP
James Cutie, Connecticut News Project

Doug Rand: A conversation about the past, present and future of philanthropic funding in journalism.

David Westphal: This is a period of rapid change in world of non-profit news. Projects such as Voice of San Diego have captured  mainstream attention (and in mainstream media). Community news sites are one center of gravity in non-profit journalism; investigative journalism is another, even at the local level. Non-news organizations, including established NGOs like Human Rights Watch as well as universities, are operating substantial newsrooms.

Why are so many going into non-profit journalism? First of all, they can; barriers to entry are very low. It’s an appealing endeavor for both out-of-work and aspiring journalists. And individual philanthropists perceive the need to sustain original news reporting.

What’s not to like about this model? First, is it sustainable — what happens when foundation money runs out? Second, will non-profits prove adaptable enough for a mercurial market? And lastly, good intentions aside, are these philanthropists impeding the emergence of market solutions?

One key to understanding philanthropic interest and activity is that we simply don’t know what the news environment is going to look like in five or ten years; it’s fair to wonder whether in the short term the market can produce the news we need. Another is that non-profit journalism offers an outlet for people and institutions which have sought a voice but didn’t have one in the old world of news production. Investigative work by unions such as SEIU offers an excellent example: we’re increasingly going to see non-news organizations moving into news productions. This is one answer to the question of who is going to pay for news, though this may be supplemental to a core of professional journalism.

Bill Buzenberg: CPI is 20 years old, and clearly the ecosystem is changing; new models of collaboration are certainly possible; but people may not understand how much work is involved in doing investigative journalism.

List of where CPI reports have shown up in last month: BBC, CBS, Daily Telegraph, Google News, Politico, Reuters, AP, TPM, Yahoo News, Sean Hannity, and on and on and on. This is the new ecosystem: There’s a void in investigative journalism, and CPI exists to fill it. You may not know CPI but you know their work — from the Lincoln bedroom story under Clinton, to Halliburton exposes during the Iraq war, to establishing which companies were responsible for the financial meltdown. Much more work forthcoming on this front to show city by city who were the worst predatory lenders. Another ongoing story: the Murtha ethics investigation, which used database journalism to reveal revolving door between congressional staffers and military contractors.

Another endeavor: ICIJ, network of investigative journalists around the world. For instance, exploring illegal tobacco trade, identified factories in Russia, China, Paraguay; stories ran in papers around the globe, also produced ebook version.

Another project: ujima.project.org, collecting UN data on arms sales and aid flows across Africa; data provided to regional journalists; similar projects in Asia, Latin America.

Tranparency is the new accountability, but it takes work.

Domestically, many projects afoot; for instance have sued federal government to uncover “medicare millionaires,” which may result in investigations at the state level. Another project, “states of disclosure”; comparing ethics laws state by state. 24 states have changed ethics laws since project began.

Now on to revenue — this isn’t cheap! Take money from foundations, from individuals; seeking paying relationships with news outlets, though this is proving difficult; 30 to 35 people at the Center, which requires a lot of funding. Center has been sued 3 times for libel, always won, but costs millions; 5 law firms offer pro bono services.

The goal is to keep creating this value — somehow we’ll figure out how to pay for it!

Robert Lang: Only $40b given out in nonprofit sector every year; by comparison private equity adds up to $60 trillion. Private money has to come back into the equation. Consider small counties which are neglected by high-profile philanthropic efforts — who’s going to pay for journalism there?

One answer is a hybrid vehicle, the L3C: low-profit limited liability company. Offers a for-profit vehicle which can draw on private equity pool, but on modified terms: the mission comes before the profit. Foundation money can also play a role in these companies: foundations can invest in for-profits if they also have a non-profit mission, and as long as they’re not engaged in lobbying, more about which later.

This inverts the normal investment scheme for venture capital: VCs will provide money at a fairly low rate of return, in a way that greatly stabilizes the entire endeavor and sustains news for small communities. What you need is patient capital to provide the necessary journalism during this period of transition. The L3C structure allows for different sorts of stakeholders to offer different kinds of support on customized terms. Crucially, this hybrid model preserves a role for advertisers, who are a critical element in local journalism and in small communities.

On the question of the ban on lobbying by non-profits: A project is afoot to redefine newspaper editorializing as falling outside of the definition of lobbying, which would permit newspapers to tap into non-profit funding more easily.

Patrick Kabat: We talk a lot about what markets do well and what they do poorly, about market failure; he and Nabiha will talk about one component of the emerging nonprofit role, the protection and pursuit of “press entitlements.”

The press traditionally stands in for the public’s right of access to information and documents, a long history of jurisprudence establishes this. However local enforcement of press entitlements is eroding along with the revenue base for local journalism; there’s a shortage of capable litigants to pursue press entitlements. Meanwhile, new questions of law are presented by emerging technology.

We’ve always gambled that newspapers would pay for the pursuit of press entitlements, that they would the the litigants of last resort. That gamble is especially dangerous today.

One way to address this is via transparency, via new norms and procedures for making public information available, but this will always fall short. There will always be a need for lawyers to pursue public information. Not-for-profits are perfectly positioned to address this need, to pay for the lawyers who will pursue public information.

Nabiha Syed: Taking the baton from Patrick: a new clinic at Yale provides legal services and support to journalists in pursuit of public information. The volume of work even after a few weeks has been tremendous.

However in some cases journalists haven’t come knocking yet — is it the lawyers’ (or the law students’) role to anticipate issues of importance, to go after public information, and to begin to expose controversies, even before reporters are writing about them? This question demands scrutiny.

James Cutie: The Connecticut News Project will launch publicly in January of 2010. As a veteran of the private equity world he can confirm that the amount of money available is vast. Even on the business side, he has a journalistic sensibility: The always-difficult relationship between the business and editorial sides of news is even more perilous in this new environment and will need to be tested and rethought, though journalism may emerge stronger as a result.

He has been in the media business for 35 years; here are three general observations. 1) At the heart of this discussion over journalism is the well being of democracy itself. 2) The conversation about the future of journalism is itself a democratic one, one which will hear from many voices and see many experiments, and won’t be over anytime soon. 3) Good journalism is a smart business strategy and worthy of long-term investment. Successful journalistic start-ups tend to be driven by passion rather than by an exit strategy.

The CNP will try to reflect all three of these lessons. The CNP is a non-profit, independent journalistic outlet aiming to provide the news and information and opinion critical to the exercise of democracy in Connecticut. A combination of original reporting, links to outside work, and links to original documents; the goal is to increase transparency and accountability for all branches of Connecticut government.

While the website is the flagship, the CNP is not burdened with the advertiser model and can push content to outside partners and platforms, including community organizations and other news outlets.

Key partnerships are with universities and with journalism schools; the CNP will also run an outreach program to mentor (aspiring journalists?) across the state. Funding from private foundations and individual contributions, but eventually also from syndication.

The mission is to remind CT residents that what their representatives do in Hartford and Washington has direct a impact on their lives, and to give them the information needed to hold those representatives accountable.

Questions and answers:

Q1: Do we think that going forward the new models will be sufficient to cover state and local government? Will they do a better or worse job than what we’ve had?

Lang: Accountability will be stronger in a nonprofit world, because there’s less concern for building an audience.

Buzenberg: We don’t and can’t know. It’ll take a lot of foundations and a lot of money to fill the gap.

Kabat: In addition to accountability reporting, we’ll see a lot more advocacy and issue-oriented reporting, unconventional forms of reporting. For instance prosecutors’ offices are essentially newsrooms, and can contribute to the information ecology.

Syed: There’s no shortage of students, and not just journalism students, who will be interested in doing the work of holding government accountable.

Westphal: Some expect a flourishing of corruption. However, we’ll see many different approaches — accountability reporting will be done at much smaller scales than it has in the past, so the potential is there for a richer ecology of accountability.

Cutie: There’s a finite number of actors in a state such as CT, and partnerships will be crucial to doing what’s needed.

Q2: What will hiring practices be like at new endeavors such as CNP? Aren’t different skills necessary than in traditional newsrooms?

Cutie: A diversity of backgrounds and experience is essential. Internships and fellowships play an important role. And CNP’s content will be distributed and developed beyond the newsroom, not locked down. Give me your business cards! We’re focused on the quality of the journalism.

Q3, for Bill Buzenberg: Are you aware of NYT’s DocumentCloud effort, in partnership with ProPublica?

Buzenberg: We’re part of it. CPI’s new initiatives may tie into that as well.

Q4: What about competition with other foundation priorities? Why should a foundation support an ephemeral activity like news, at the expense of its anti-poverty programs for instance?

Buzenberg: It’s not either-or. In fact supporting journalism about an under-covered issue may lead to public action, remedies, solutions.

Lang: It’s true, there’s not unlimited money in the foundation world. That’s why news projects need to use as little of that money as possible, and not to become dependent upon it, because foundations get funding fatigue. You don’t want the smartest person in your organization to be dedicated to raising money.

Westphal: You can make a big difference in non-profit journalism with a fairly small investment, which may appeal to funders who want to make a name for themselves.

Cutie: Good journalism covering the capital, covering schools, etc., really drives and affects public action. Well-articulated, there’s a direct correlation between journalism and traditional foundation missions.

Kabat: Education is the most secure sector in the foundation world, and it’s not too difficult to couch news non-profits in the language of an educational mission.

Q5: The role of universities in journalism will be an increasingly important question — witness the ongoing controversy over the Innocence Project. A mini-conference about this is in the works for the AEJMC annual conference slated for early August, 2010, in Denver. Leonard Witt of the Center for Sustainable Journalism invites queries at lwitt@kennesaw.edu.

Q6: Chitown Daily News failed because it didn’t become sustainable — what are the lessons to draw from its experience?

Westphal: It was a simple matter of not coming up with the transition plan to sustainability. The founder’s own conclusion was that he needed to scale up more quickly and effectively than he was able to.

Lang: There’s a new group in Chicago that’s going to reproduce Chitown’s mission, but as an L3C, precisely in order to better manage that path to sustainability.

Applause! Thanks to all for participating and listening; we’re off to lunch.