Can Washington Help Ailing Newspaper Industry?

Lawmakers on Capitol Hill are looking for ways to shore up the struggling newspaper industry. Bills have been introduced that would allow newspapers to operate as tax-exempt non-profits and loosen anti-trust laws. Senator John Kerry held a hearing recently to come up with answers.

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The future of newspapers is also in doubt as major metropolitan dailies have filed for bankruptcy. A Denver newspaper closed. A Seattle paper went online only. And the future of the Boston Globe is still in question. Now members of Congress are trying to figure out what, if anything, they want to do about it. NPR's Audie Cornish reports.

AUDIE CORNISH: No one is talking about bailing out the news industry, not even journalists. Here's former Baltimore Sun reporter David Simon, now a TV producer.

Mr. DAVID SIMON (TV Producer): There can be no serious consideration of public funding for newspapers. High-end journalism can and should bite any hand that tries to feed it, and it should bite a governing hand most viciously.

Senator BENJAMIN CARDIN (Democrat, Maryland): I also would oppose any government direct bailout to our newspapers. I don't think that's an appropriate way for us to move forward.

CORNISH: And that was Democratic Senator Benjamin Cardin of Maryland. Cardin has filed legislation that would let newspapers choose to operate as tax-exempt, non-profit organizations.

Senator CARDIN: Why? Because it gives an avenue for local supporters, whether they be individuals, whether they be foundations, whether they be educational institutions, to be able to come together under a (unintelligible) model and preserve the tradition of their local newspaper.

CORNISH: Cardin made his case at a commerce subcommittee hearing led by Senator John Kerry.

Senator JOHN KERRY (Democrat, Massachusetts): I wanted us all to sit down and talk about it and try to figure it out together. Is there even any government role at all? I don't know the answer to that.

CORNISH: Invited guests included Web publisher Arianna Huffington and the CEO of the Dallas Morning News, James Moroney. They painted a picture of an industry built on advertising revenues that are drying up. Simon said readers can find newspaper content online, so they don't buy papers.

Mr. SIMON: Readers acquire news from aggregators and abandon its point of origin, namely the newspapers themselves. In short, the parasite is slowly killing the host.

CORNISH: Huffington sees it somewhat differently.

Ms. ARIANNA HUFFINGTON (Web Publisher): They are not losing their revenue base because of the Internet. They're losing their revenue base because of Craigslist, because the advertising is down, because of the economic crisis, and because of the changes in consumer habits. They're not losing it because of other aggregators.

CORNISH: Journalists and lawmakers had some suggestions - temporary tax relief for newspapers, relaxing of anti-trust regulations to let print and broadcast operators merge, or to let newspapers get together and insist readers pay for online content. Dallas news publisher James Moroney asked lawmakers to review copyright laws.

Mr. JAMES MORONEY (CEO, Dallas Morning News): We don't want to pull out of the digital ecosystem. We're not against what Ms. Huffington does and we're certainly not against what Google does. We just simply want to have a fair compensation for the content that we publish.

CORNISH: But others argued it's too late for papers to start collectively charging for content, and it won't help. Online news supporters argue that money should be spent to provide universal digital access, bringing poor and rural areas online, or that the government should encourage private investment in regional and independent investigative journalism groups. David Simon warned of negative consequences if journalistic watchdogs can't do their jobs.

Mr. SIMON: The next 10 or 15 years in this country are going to be a Halcyon era for state and local political corruption. It is going to be one of the great times to be a corrupt politician.

(Soundbite of laughter)

CORNISH: That's uncomfortable laughter from lawmakers mixed in the crowd. After all, they love having their photos on page one, usually. Now that they've heard more options, the question is how much appetite they have to help.

Audie Cornish, NPR News, the Capitol.

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