Future Tense

Congress’ Best Idea to Save Local Journalism Would Actually Hurt It

A blurry newspaper comes out of a printing press.
Bank Phrom/Unsplash

For weeks, congressional negotiators have been considering folding the Journalism Competition and Preservation Act, a bill intended to support local journalism into a larger must-pass spending bill. But as many critics pointed out, the JCPA would have failed to do what it aimed—in fact, it might have ended up hurting local journalism.

Thanks to changing priorities, the bill won’t advance this year, and that is cause for cheer. But in Congress as with any game of thrones, what is dead may never die. The JCPA is the kind of bad bill that threatens to surface in sudden moments because of its good intentions and patchwork of odd bipartisan bedfellows.

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The JCPA would attempt to subsidize dying news brands by creating a type of link tax on social platforms. It would carve out an exception in antitrust law and let publishers across the U.S. band together and negotiate payment from sites that profit from aggregating lists of links on search and social platforms that users can click on to visit news websites. In fairness, the JCPA tries to address two legitimate problems that are deeply entwined: the demise of local news and the power of large tech platforms. The problem is that the bill itself wouldn’t address the underlying problems that have news organizations struggling economically.

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To understand this puzzle requires understanding the advertising-driven news model the internet broke. Pre-internet, consumer information source choices were scarce because people were confined to media within their local reach. The advertising market for local news had a reliable, definable local audience in turn. Then the internet came along in the early 1990s and took a sledgehammer to the high barriers to entry.

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Self-publishing created a host of new digital information sources that forced local news to compete with global sources for attention. But more radical was the linking structure of the internet, which changed the organizational structure of media itself. The essays that spawned the famous Cluetrain Manifesto in 1999 said it best in Thesis 7: “hyperlinks subvert hierarchy.” Pre-internet, local legacy news could be described as hierarchical information oligopolies, with a producer-gatekeeper at the top deciding what would be produced and distributed to waiting audiences who had no say in production choices.

As Cluetrain deftly noted, hyperlinks are power. They are the product of the internet’s vastly reduced publishing costs, but they also let people in networked environments grab gatekeeping power from traditional media. We can’t walk that back without breaking the structure of the internet itself.

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With the playing field full of new, global competitors, local news lost control of its audience, and with that went advertising. According to Pew Research Center, local news ad revenue went from a peak of about $510 billion in 2008 to an estimated $10 billion by 2020. For an industry that in its heyday drew about 70 percent of its revenue from advertising, that is an existential crisis.

That ad money didn’t disappear. Linking created the possibility for new types of products that helped users sort through the sudden flood of information across a suddenly unmanageable amount of news choice. Industries sprung up to meet the demand of information abundance, at the expense of industries built on scarcity. Google (with indexing) and Facebook (with interpersonal information-sharing) capitalized on the power of search and discovery and built ad-supported businesses around it. It’s a “problem” the JCPA aims to fix, positing that the revenue Big Tech gained from this new information structure should go back to the creators they recommend. But it incorrectly assumes Google News or Facebook wouldn’t exist without news.

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JCPA has an eclectic band of 86 co-sponsors, including Sen. Amy Klobuchar, a Democrat from Minnesota, and Sen. John Thune, a Republican from South Dakota, and incoming Democratic leader Rep. Hakeem Jeffries and Republican Rep. Matt Gaetz in the House. Some want to punish or rein in Big Tech, others to promote journalism. So you get unusual allies with different motivations for the same mechanism, a bill that allows publishers to work together to extract subsidies from adtech companies such as Meta and Google.

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Meta reported $114.93 million in ad revenue in 2021, whereas Google reported $209 billion. But determining how much of that publishers should get is difficult—and the JCPA doesn’t even try. One version of the JCPA proposed platforms and publishers negotiate an agreed-to payment, and if they couldn’t come to a consensus, they’d enter forced-arbitration with no formula for what is fair. But whether the money would end up being vast or a modest bump to the bottom line, not every publication stands to benefit if the JCPA becomes law. While the JCPA’s alliances allow for partnerships, exclusionary elements of the JCPA would encourage big brands to unite selectively at the expense of smaller ones and shut out niche independent journalistic outlets altogether.

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For example, the bill excluded publishers with more than 1,500 employees, which consists of the three major newspapers in the U.S.: the New York Times, Washington Post, and Wall Street Journal. But it also excludes organizations with less than $100,000 in revenue, which would shut out some small-town outlets as well as some nonprofit and niche local news organizations doing some of the most innovative work in creating a sustainable local news model. After exclusions, that leaves the bill’s primary beneficiaries: a large mass of big-city, high-revenue publications whose newsrooms have been gutted by hedge funds such as Alden Global Capital. (More than 51 percent of U.S. newspapers are now owned by a hedge fund.) Alden’s model purchases barely profitable news properties, loads them with debt taken on to complete the purchase, and then slashes newsroom personnel to stop the bleeding it created. The bill intended to protect local news would instead reward destructive stewards of the public interest, paying people creating the problem the JCPA’s backers want to solve.

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Worse, the JCPA does not actually require any percentage of the revenue transferred from tech platforms to be reinvested in the newsroom, which is what would help news thrive locally. Organizations that would ostensibly benefit from the JCPA have shown concern or outright hostility instead, including News Guild-CWA and the National Newspaper Publishers Association. The NNPA notes the revenue minimum would exclude many of its members, as does LION Publications, a consortium of innovative local independent news startups.

So local journalists and community organizations touted as beneficiaries of the JCPA are telling us this is a bad bill. Facebook threatened to ban all news content, which would gut the JCPA’s reason for existing. Media critic Jeff Jarvis also noted the JCPA could endanger something like the Google News Initiative, which has poured millions of dollars into training and free tools for gutted newsrooms.

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Finally, it’s important to note that if news organizations are truly unhappy with the status quo, with a few lines of code they can exclude their content from platforms. Except these organizations do in fact derive at least some value from the status quo. Referrals from link organizers such as Google elevate their standing in the ocean of information sources online. It may not be the same amount of money they would have earned pre-internet, but platforms feed news sites with traffic that earn ad dollars and sometimes convert people to subscribers over time. None of this value would be quantified in the JCPA’s revenue arbitration.

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Proponents point to a similar bill in Australia that passed in 2021 as proof of the idea of forced-subsidy works, but on closer inspection it doesn’t hold up. Australia’s bill allows platforms that make significant contributions to news to negotiate separate deals with publishers. Google and Facebook did with the country’s largest publishers. The bill actually hurt smaller players that got shut out of the side deals self-interested large publications cut.

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Would any news subsidy model that transfers revenue from tech platforms to news organizations work? It’s debatable. There is the structural problem: The internet is built in ways that favor free link exchange and news organizations risk not being missed if they are booted from platforms whose business ironically is built to deliver them traffic. There’s no oversight or accountability for whatever money is paid out, to know whether the JCPA actually works as intended. Finally, there’s the innovation problem related to who is excluded. The JCPA would subsidize dying brands and, likely in an effort to avoid weighing in on the tiresome debate over whether bloggers are journalists, creates the $100,000 threshold that leaves behind some of our most promising news startups. The future of news can’t be about propping up struggling legacy players and punishing innovators.

The JCPA’s unusual ally list suggests it could easily surface again, and probably at an unexpected time. Proponents cleverly evolved their rhetoric to call the JCPA a check on Big Tech, which excites partisans across ideologies, even as the legislative mechanism does nothing of the sort. If you’re worried about Big Tech’s massive gatekeeping power, this bill does nothing to address it structurally. In fact, it looks like entrenchment.

Future Tense is a partnership of Slate, New America, and Arizona State University that examines emerging technologies, public policy, and society.

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