10 things the US government can do to help digital news entrepreneurs

The US Federal Communications Commission last week released its long-awaited report on the future of local news in the Internet era, “The Information Needs of Communities,” to a collective “meh” from the digital news commentariat. At best, the report seems to have met or at least exceeded the low expectations that many critics had for it. There’s no ill-advised proposal for getting government into the news business, thank goodness, and the report shows a commission that tried to do its homework in analyzing what’s been happening in the local news marketplace over the past decade.

But let’s not dismiss too quickly the federal government’s potential role in promoting good news coverage. Here are 10 steps that the US government *could* take that would significantly help entrepreneurs trying expand the news coverage of their local communities. And none of them involve direct subsidies or payments to the news industry.

1. Protect Net Neutrality

The Internet has nearly eliminated the barriers to entry for start-up publishers, enabling the explosion of new information sources across the Internet. If we need better sources of local information, the solution is not to allow telecom companies to extract tolls and demand payments from publishers to allow access from readers. That will merely reduce the number of voices available to consumers while further enriching telcos. Corporate media was cutting local news coverage before the Internet. Silencing websites won’t bring back that coverage. It will only reduce the possibility of finding replacements.

2. Expand broadband coverage

The smaller the market, the harder it becomes for a local publication to earn the income it needs to operate as a viable business. The digital divide makes small communities even smaller. Universal access to broadband would make every household part of its local digital marketplace, expanding opportunities for publishers and helping increase the possibility that a professional, responsible news publication in that community could be a financial success. The government can help expand broadband coverage not by caving to the demands of telecos (who are holding broadband expansion hostage to kill net neutrality, for example), but by laying its own fiber lines, establishing public WiFi networks, and by demanding more from companies bidding for broadcast spectrum.

3. Digitize public records and put them online in open formats

You might have noticed that we have millions of un- and underemployed workers in America today, many with digital skills. We also have decades of public records that remain available only in printed form, or in archaic electronic formats. Why not create a WPA-style computer workforce to digitize the nation’s public records and to publish them online, in open formats? Not only would this effort put many thousands of Americans to work, it would create a repository of more easily retrievable public information, allowing citizens (and reporters) easier access to our government.

4. Pass a national shield law, with explicit protection for online publishers

The First Amendment belongs to everyone, not just to print and broadcast reporters. Unfortunately, the shield laws that provide legislative support to the First Amendment vary from state to state, and some courts are unwilling to apply their protections to anyone other than old-school print and broadcast reporters. A federal shield law, with an explicit protection for online publishers, could help create a more hospitable legal environment for start-up news publishers.

5. Regulate transaction fees

Like many retailers, I lose a chunk of every payment made by my customers who use debit and credit cards. While it’s reasonable to expect to pay a bit for the convenience of these forms of payment, given the small number of megabanks that now control the credit card industry, we need government oversight to keep fees reasonable. Congress is taking steps to help this happen, which will reduce operating costs for all small businesses, including start-up news publishers.

6. Revisit COPPA

The Children’s Online Privacy Protection Act sounds like a worthy piece of legislation – no online service can collect personal information from someone under age 13 without that the explicit consent of that child’s parent or guardian (and an email or Web form consent doesn’t count). In practice today, however this act is violated so often as to make the drinking age look like a widely respected law. And it’s not the publishers undermining the law. It’s the kids. Many online community publishers spend way too much time finding and deleting user accounts from kids who lied about their age to register on a website. Creating digital media has become a normal part of life for kids under 13. It’s time to revisit this law and create a new solution that protects kids, parents and publishers. The law should mean something. When this many people violate it, the law is reduced to charade and farce.

7. Ditch the FTC’s “blogger endorsement” rule

This attempt to force truth in advertising is a confusing mess and its inconsistent enforcement has become a joke. If payola disclosure’s important, let Congress pass a law mandating it for everyone – bloggers, newspaper reporters, celebrities and anyone else who publishes. But good online publishers shouldn’t have to worry themselves with jumping through legal hoops that less considerate people get away with ignoring.

8. Model zoning reform

Continuing on the topic of widely ignored laws, zoning laws in many communities make running a business from your home (even a remotely hosted website) illegal. With telecommunity becoming more popular, the lines dividing home from work are becoming more blurred. While zoning remains a local issue, the federal government could encourage local communities to revisit their zoning regulations to encourage the development of online businesses. The first step would be to eliminate restrictions against running from one’s home office a business that employs no one from outside the family on site.

9. Remove payroll tax cap and reduce rate

My last two recommendations would help create a more viable environment for all job creation, not just in online news. Too many digital entrepreneurs are caught by surprise their first year, when they’re hit with the bill for the “self employment tax” – the share of Medicare and Social Security taxes typically paid by employers. When you’re self-employed, you’re on the hook for that share, as well as your regular share as an “employee.”

These so-called payroll taxes are regressive, as they are charged only on the first $106,800 of income. Eliminating the cap would raise additional money to fund these programs, potentially allowing an overall reduction in the payroll tax rate. That would reduce the self-employment tax, making digital entrepreneurship more attraction to journalists thinking about starting up, just trying to make a middle-class income for themselves and their family.

10. National health care

Even more than payroll taxes, the biggest non-income expense for many start-up businesses is health care. I personally know many journalists who’ve stuck with unsatisfying newsroom jobs rather than starting out on their own because of the health benefits. Ever-increasing health insurance premiums effectively serve as a private industry “tax” on job creation in the United States. A national health care plan that divorces health insurance from employment would encourage people and businesses to create jobs by eliminating health insurance as a direct expense of creating (or maintaining) a job. At the very least, opening Medicare to all who wanted to enroll and pay the premiums would create some much needed competition for companies such as Wellpoint, which enjoy near-monopolies in many communities on health policies for the self-employed.

A flaw in the proposed federal shield law for journalism?

Gerry Storch is editor/administrator of www.ourblook.com, a media analysis/public issues discussion site that bridges the gap between a blog and a book. He has been a feature writer with the Detroit News and Miami Herald, Accent section editor and newsroom investigative team leader with the News, and sports editor and business editor for Gannett News Service. He holds a B.A. in political science and M.A. in journalism, both from the University of Michigan.

The media shield bill that frequently seems poised to whisk through Congress, but has incurred several discomfiting delays, is a bad idea unless it gets one big change.

And isn’t it odd that the shield bill is revving up with its sprint-to-the-finish momentum, and the mainstream media would be gaining a significant new power, just when …

Just when these same media are declining precipitously in readership and finances, are at an all-time low in public believability as measured by the recent Pew research report, and have relatively few reporters left investigative or otherwise who would avail themselves of such a law.

Let’s call it for what it is, a power grab. As many states already have their own shield law, this is an attempt to cram one down the throats of those who have declined to grant the media such a privilege, or have done so in tepid fashion. If it passes as is, the press would have virtually unlimited power in reporting.

Back in the ’80s, I would have been a kneejerk and enthusiastic supporter of this bill. I was fortunate to be the leader of an investigative team at the Detroit News when it was a big, robust paper … the nation’s ninth largest daily, and the seventh largest Sunday edition. I oversaw half a dozen reporters and could tap more if needed. So from the stories we did, I think I’m well enough aware of the need for confidential sources and to protect them. Often, there’s no other way to expose wrongdoing.

That was then, now is now. Now I’ve been out of the journalism biz for eight years and have a hopefully broader view.

The big change I’d like to see is this: if the story goes to trial, the judge should have the discretion to disallow the confidentiality protection of the sources if the reporter has made any significant errors or if the sources’ information is wrong or unfair.

If the reporter has screwed up or been dishonest or been suckered, why should he/she be protected?

Without this change, the law is a bad idea for the public because the rights of the subjects of the stories and possibly others affected are totally ignored. And it might be a bad idea for the press itself because one can easily foresee it backfiring during a libel trial that centers on wrong and harmful information.

Imagine the press attorney smirkingly telling the jury that ha-ha, no we’re not going to tell you where this bad information came from because we don’t have to, and no you can’t hear from these sources themselves to make sure the reporters didn’t goof in claiming what was confided to them. Juries don’t like parties in a case with their noses in the air, or sensing that the deck has been stacked, and the reporter defendants might get an unpleasant surprise when they hear the verdict.

The glitches in the shield law’s consideration in recent years have centered on national security provisions and whether bloggers et al would be included for eligibility in this shielding. The various sides all had worthy considerations, and these aspects have been amply debated.

What’s being rushed through with no attention is the underlying basis of the bill … that reporters are perfect little angels who would never ever abuse the use of confidential sources, and that these sources are always totally honest and aboveboard with no hidden agenda.

Anyone who wishes to openly make that argument, be my guest.

The efficacy of the bill depends upon the public trusting reporters, yet the public doesn’t trust reporters.

More sophisticatedly, the argument is made that only the most experienced, the most talented, the most determined and the most ethical reporters would be doing the investigative stories that would be protected, and therefore the law is needed to safeguard these paragons.

So how do you explain what happened at the Los Angeles Times?

In 2008, the Times was forced to retract a story, and reporter Chuck Philips publicly apologized, after the investigative website Smoking Gun exposed the fact that a jailbird confidential source he had relied on had given him forged documents in the case of an attack on rap star Tupac Shakur in which music executive Sean “Diddy” Combs was implicated.

The story was flat-out wrong and big star Philips … why, he had won a Pulitzer Prize … had been duped like the rawest rookie.

Yet if Smoking Gun hadn’t been around to help, and if the federal shield bill had been in effect, even someone as powerful as Combs would have been helpless to win redress and clear his name, since he undoubtedly would have been classified as a public figure. He and any other innocent person in a similar situation would have virtually no recourse as the victim of a false, harmful story based on false, harmful information from a shielded confidential source.

In two editorials since then that … surprise, surprise … soundly endorsed the shield bill, the Times somehow “forgot” to mention this embarrassing but relevant incident. If the paper cannot be trusted in its explications concerning the bill, how can it be trusted in its operations with unnamed sources that same bill would protect?

Here are three other real-life media situations that if you extrapolate from them, show why the shield law as presently constituted isn’t good.

MICHIGAN FOOTBALL. Last fall, the Detroit Free Press ran a sports expose in which six unidentified current and former University of Michigan football players said they were forced to practice far more than NCAA rules allow.

Anonymous sources should be used only as a last resort … only when there is a significant story being told and there’s no other way to get the information.

To me, in this case it was justified. If the players had gone on the record, they would have been ostracized by their teammates, given verbal abuse by rabid fans for “hurting the team,” and had their lives made a living hell by the vengeful coaches. As a U of M grad, I thought it was an excellent story showing how a once high-class football program is being dragged down into the dirt by a new low-class coaching regime.

So that part’s OK. But suppose … not just in this story, but say a similar story at any paper … that the coach could come up with practice time logs showing he had done nothing wrong, or that the players had some sort of ulterior motive for complaining that wasn’t reported, or the reporter had misunderstood something … the shield law would unfairly protect the slacker reporter and punish the innocent coach.

NYT GETS MCCAIN. In what can only be termed a disgrace and abuse of confidential sources, the New York Times in February 2008 came out with a widely heralded story hinting that the married Sen. John McCain embarked on a romantic affair back in 1999 with lobbyist Vicki Iseman, 31 years younger.

Iseman responded by filing a $27 million libel lawsuit. It was subsequently settled out of court, and the Times … not saying whether it had paid her anything … crowed that it had won a big victory for freedom of the press.

But if the case had been pursued … the paper did not flatly come out and say the two had an affair. There was no straight factual substantiation whatsoever. Indeed, the paper printed denials by both parties … and then rattled on as if the denials didn’t matter, using innuendoes from anonymous sources. It is telling that the Times, in its flimsy response to the suit, said it had been reporting on the “perception” of questionable activity by McCain … i.e., not on any activity itself but the “perception” of it.

Ms. Iseman claimed the story led to “a corresponding deterioration of her interior mental, emotional and physical health.” If she had doctor bills to prove it or any other specific evidence of damage, and the Times couldn’t or wouldn’t produce the sources to justify the story, her lawyers would have had a field day.
Since the Times’ own ombudsman, Clark Hoyt, seemed dismayed by the nonexistent reporting … noting in his column that “although it raised one of the most toxic subjects in politics — sex — it offered readers no proof that McCain and (the woman) had a romance” … Iseman’s lawyers would have enjoyed asking him on the stand to tell the jury why it was justified for the sources to be shielded, and see what he was forced to say.

IT WAS ONLY A MURDER. The Alton, Ill., Telegraph got into a hot spot in 2008 when it received a subpoena from a grand jury demanding to know the identities of five anonymous responders on its website concerning a murder investigation. The state’s attorney believed two of the bloggers could help solve the murder case because from their comments, they seemed to know something about who did it.

The Telegraph, without uttering even a shred of sympathy for the murder victim’s family, or at least any sympathy that was visible in a standard Google search, said the bloggers were “sources” akin to someone making a telephone tip in the old days, and that such sources were protected by the state’s shield law, so sorry, we won’t help you. The paper may have neglected to use the phrase “chilling effect” in its brief; maybe in Alton, they don’t know it’s virtually mandatory that “chilling effect” be posited by the press as a dire warning if anyone dares challenge it legally.

Since then, a judge ruled the paper had to identify the two relevant bloggers but not the other three.

If a family member or good friend of yours was murdered, and an anonymous source in the media knew who did it, how would you feel if the paper not only didn’t care but also refused to let law enforcement interview this source to bring justice?

That’s power of the press, all right, to possibly keep a murderer from being prosecuted. Too much power for my taste.

P.S. Please, please don’t bother bringing up the supposed plight of the Northwestern University journalism students as a justification for a shield law.

Let’s see now, these are the students who gave a guy money some of which he used to buy cocaine after he obligingly furnished them the murder confession they wanted to hear in their quest to free a convicted defendant of that crime so they could get good grades, only afterward the gentleman inconveniently recanted his confession and the district attorney’s office has started investigating the students’ investigation, which is wrong wrong wrong because while the students can investigate anybody they want, nobody can investigate them because they’re so goshdarn special and if anyone tries, it’s wrong wrong wrong because it will have a chilling effect on reporters throughout the universe.

This isn’t a reason to have a shield law. It’s a reason to fix the one that’s being blasted through with too little discussion, too little attention.

Can a source make your published scoop go away?

So you’ve got a juicy scoop?

If you worked for a newspaper, it’d get set on the page, printed up and distributed throughout your circulation area. Once it was out, there would be no taking it back.

If you worked for a TV or radio station, you’d sked it for air; put it out… and there would be no taking it back, either.

But let’s say you work online. You get your story and upload it. But unlike in print or broadcast media, online stories can be “taken back.” If your website is hosted by an outside ISP, a letter or e-mail from an angry source might be enough to knock your story off the Web.

That’s what happened to a blogger in Claremont, Calif. this month. The anonymous blogger who posts as “Claremont Insider” had found the salaries and benefits of city employees on the city’s website. He published what he found in a Labor Day post on his blog. (Thanks to Kevin Roderick’s LA Observed for the tip.)

Soon after, according to a follow-up post on the Claremont Insider blog, Google, which hosts the blog through its Blogger service, pulled the post, in response to a note from the city claiming that the salary information was confidential, which would make its publication a violation of Google’s terms of service for Blogger. Claremont Insider followed up, disputing that public employees’ salaries could be confidential information.

The city came back with another argument, according to Claremont Insider. It claimed copyright over the images of employees’ paychecks published on the blog. The blogger accommodated by publishing the data in text form, and Google allowed the edited post to stand.

Attorney Michael S. Overing, who has taught media law at the University of Southern California’s Annenberg School for Communication and written for OJR, questioned the city’s claim.

“This would be a mighty thin copyright. Forms are not copyrightable. So, only the filled-in information would be potentially copyrightable. But, even then, those checks would be public records, subject to FOIA requests, subject to public scrutiny,” he wrote in an e-mail.

Overing cited a 1996 case, Richard E. Lindberg v. Kitsap County, that held a city could only use copyright to withhold documents from public view in very limited circumstances. [Corrects to note that the court did leave some room for very limited circumstances.]

What should you do?

Although the Digital Millenium Copyright Act mandates that online hosts, such as Google, take down infringing content when informed of its presence on their servers, the DMCA also includes protections for online publishers.

Most major online publishers are familiar with the “safe harbor” provisions of the DMCA. Designed for publishers and other online service providers who provide forums for users to publish content online, the procedures for challenging a take-down notice also can help a blogger, such as Claremont Insider, who faces a challenge over the legality of his content.

ChillingEffects.org offers a FAQ about the DMCA’s safe harbor provision on its website. The questions about counter notice and putback procedures are relevant to an incident such as this, put the entire page offers rewarding information for any online journalist.

A well-supported putback request can help you get your story back online, and quickly, if you respond as swiftly as Claremont Insider did. But how can news publishers prevent improper take-down requests?

The DMCA might offer some help with this, as well. In 2004, Diebold, the company behind most of the United States’ electronic voting machines, lost a DMCA case when Electronic Frontier Foundation (EFF) and the Center for Internet and Society Cyberlaw Clinic at Stanford sued on behalf of publishers whom Diebold had targeted with DMCA copyright takedown notices.

From the post on LinuxElectrons:

“Diebold sent dozens of cease-and-desist letters to ISPs hosting leaked internal documents revealing flaws in Diebold’s e-voting machines. The company claimed copyright violations and used the DMCA to demand that the documents be taken down. One ISP, OPG, refused to remove them in the name of free speech, and thus became the first ISP to test whether it would be held liable for the actions of its users in such a situation.”

In Online Policy Group v. Diebold, a U.S. District Court in California ruled that [PDF file] “Diebold sought to use the DMCA’s safe harbor provisions—which were designed to protect ISPs, not copyright holders—as a sword to suppress publication of embarrassing content rather than as a shield to protect its intellectual property.”

Diebold ultimately agreed to pay damages and legal fees of $125,000, according to the plaintiff.

So even if a source manages to get your ISP to take down your scoop, if your information is appropriate, their action against you could turn out to be a very costly mistake.