The FCC’s Local Media Rule-Making with George Gilder and Hance Haney

Bill WaltonCulture, Economics, Investing, Politics

In the age of Trump, some of the biggest stories go virtually unnoticed.  

While President Trump was rescuing three UCLA basketball players from the clutches of Chinese jurisprudence, then arguing with one over whether he should be thanked for his trouble, his Federal Communications Commission was enacting rules changes that could usher in a new era for how Americans get and consume local media.  

The FCC voted in November to rescind rules that prohibited media companies from owning more than one outlet in the same market. Before the Internet, the rules were somewhat more justifiable, when one corporation might be able to dominate debate by controlling all the media outlets in a community. 

But as Hance Haney of the Discovery Institute pointed out in a recent visit to “The Bill Walton Show,” that this is no longer anywhere close to the case. 

“We now have a situation where a prominent senator has proposed to regulate companies like Google and Facebook as public utilities in order to prevent hateful speech, propaganda during our elections and fake news,” Haney said. “I would argue all of these phenomena are evidence of more viewpoint diversity than we’ve ever had before. Now really the urgent challenge is to protect journalism – real local journalism.” 

Local media is a tough business to invest in. Thanks in large part to Craigslist, which eliminated newspapers’ revenue stream from classified ads, newspaper revenues have declined from $49 billion to $18 billion in just the last decade. I know from my own experience as part-owner of a small rural newspaper that it’s extremely expensive to develop local news. It’s boots on the ground. It doesn’t scale well.  

As it is, on one end of the media spectrum there are neighborhood blogs and small community papers while on the other are huge media companies – with little in between. There are six states in which there are no full-time reporters assigned to the state capital.  

Clearing away the rule against multiple ownership “will enable broadcasters and publishers to cooperate with one another, to jointly invest in conducting investigative journalism for example – and using the results of that investigation on multiple platforms,” Haney said. “In print. Over the air. The fact is, the rule we had dated back to 1975 – before we had the Internet. Today, with Facebook, with Twitter, with blogs, with podcasts, you name it … there are more opportunities to share our personal opinions than there have ever been in the past.” 

The web expands the reach of local media – potentially worldwide – but it does not generate a lot of revenue. That could change too as Bitcoin and blockchain technology comes online. 

Today, local media on the web is a slave to Google ads and the like – who pay them paltry sums by the click. But what if papers could charge a nickel per story to read? Most of us would pay it – as long as it didn’t mean writing a check or processing a payment. Blockchain technology could make these micro-payments possible and economical, which futurist George Gilder said could be a game-changer. 

“The link between the consumer of local news and the producer of local news is direct,” Gilder said. “He pays for his news to the news producer. And it doesn’t get diverted out into some advertising intermediary and dissipated across the Internet.” 

There is no guarantee this will make a lot of difference aside from a few broadcast entities buying up local print/web properties, Haney said.  

But as he pointed out, it could have been significantly worse. The Obama administration had considered direct government subsidies to newspapers and relaxing our nation’s copyright laws to generate media revenues. Now those are some bad ideas.