May 2009

Communications attorney Matthew Leibowitz has written the Federal Communications Commission a warning of what he says is a "First Amendment Perfect Storm" that the FCC must take steps to avoid. Leibowtiz, principle at Leibowitz & Associates, said in his letter, a copy of which was also sent to Multichannel News, that the storm will be created when the decline of newspapers is combined with potential bank/government ownership or control of TV and radio stations. He wants the FCC to open an inquiry into how to protect the First Amendment by protecting banks' interest in broadcast properties and the liquidity of those stations. If you don't protect that bank interest, he says, "there will never be another bank loan to broadcasters." And the government could wind up controlling more than a station's license. "We now have a potential seismic restructuring of broadcast ownership he warns, "with bankers acquiring significant interest in numerous broadcast stations. The concurrent de facto nationalization of these lenders may, in turn, lead to significant de facto government ownership of the commercial broadcast media," he said.

The race is crowded, but San Francisco stands a fair chance of becoming the first major American city without a daily newspaper. The San Francisco Chronicle, founded in 1865, is trimming its already pared-down staff in an attempt to avoid closure. And if it does disappear? "People under 30 won't even notice," says Gavin Newsom, the city's mayor. Most industries are suffering at present, but few are doing as badly as the news business. Things are worst in America, where many papers used to enjoy comfortable local monopolies, but in Britain around 70 local papers have shut down since the beginning of 2008. Among the survivors, advertising is dwindling, editorial is thinning and journalists are being laid off. The crisis is most advanced in the Anglo-Saxon countries, but it is happening all over the rich world: the impact of the Internet, exacerbated by the advertising slump, is killing the daily newspaper. Does that matter? Technological change has destroyed all sorts of once-popular products, from the handloom to the Walkman, and the world has mostly been better for it. But news is not just a product: the press is the fourth estate, a pillar of the polity. Journalists investigate and criticize governments, thus helping voters decide whether to keep them or sack them. Autocracies can function perfectly well without news, but democracies cannot. Will the death of the daily newspaper—the main source of information for most educated people for at least the past century, the scourge of corrupt politicians, the conscience of nations—damage democracy?

About $5 billion of the estimated $19.5 billion in eRate funds committed to schools and libraries from 1998 to 2006 were never used, according to a recent report from the Government Accountability Office (GAO). In some cases, funds were not claimed because the applicants' needs changed from the time they applied until it was time to file a Form 486, which releases the funding to applicants or their service providers. In other cases, the actual expenses that applicants incurred were less than the amount of funding they had applied for. Often, the sheer complexity of the program caused applicants or their service providers to leave money on the table. Whatever the reason, more than 25 percent of the available eRate funding that was committed to applicants during the program's first nine years has not been disbursed.

For the devout antitrust faithful, the Department of Justice this week unveiled its new patron saint, Thurman W. Arnold. In three speeches in as many days, Assistant Attorney General Christine Varney, who leads the antitrust division, and her top economist, Deputy Assistant Attorney General Carl Shapiro, have invoked Arnold and his determination 70 years ago to bring antitrust cases to improve the state of the economy to the benefit of the American consumer. President Franklin Delano Roosevelt appointed Arnold to lead the antitrust division at DOJ in 1938, when the Sherman Act, the cornerstone of antitrust law in the US, was unproved.