We Won't Save Newspapers By Giving Them A Big Dose Of The Poison Killing Them

Hmm. I think that newspaper preservation does not mean what he thinks it means: WASHINGTON, March 18 (Reuters) - U.S. Attorney General Eric Holder sa

Hmm. I think that newspaper preservation does not mean what he thinks it means:

WASHINGTON, March 18 (Reuters) - U.S. Attorney General Eric Holder said on Wednesday preserving a healthy newspaper industry was important and he was open to adjusting antitrust policy if it could help.

"I'd like to think 20, 30, 40 years from now people will still be reading the newspaper," Holder told reporters.

He was responding to a call by House of Representatives Speaker Nancy Pelosi, urging the Justice Department to give newspapers more leeway to merge or combine operations.

The industry is reeling from declining circulation, economic recession and a shift in advertising and reader attention to online media. Venerable newspapers have closed or -- such as the Hearst Corp.'s Seattle Post-Intelligencer this week -- gone to Internet-only editions with reduced staff.

"I think it's important for this nation to maintain a healthy newspaper industry. So to the extent that we have to look at our enforcement policies and conform them to the realities that that industry faces, that's something that I'm going to be willing to do," Holder said.

Some struggling newspapers in multiple-newspaper cities have limited antitrust immunity under the 1970 Newspaper Preservation Act, allowing them to combine business activities while maintaining separate news operations.

Well, here's the thing. That 1970 Newspaper Preservation Act (passed under Nixon, who I can assure you, was not interested in "preserving" newspapers) was the first major step in the media consolidation that brought us here today. The act allowed newspapers in the same town to be owned by the same corporation, and that led to what in many cases was only superficial editorial independence.

Instead of preserving editorial voices, it preserved profits. That was the real purpose. It led to price-fixing, and the consolidated business operations took full advantage by jacking up the advertising rates. After all, where else could advertisers go? (Those high rates - which sustained hefty profit margins for years - ultimately made Craigslist an immediate and smashing success.)

The joint operating agreements (JOAs) under this Act allowed parent companies to adopt financial policies that did actually affect each paper's resources - and thus, their ability to cover the news. Trust me, this did not serve the cause of democracy.

So while this may sound like a good thing, the solution to dying newspapers is not to allow ownership to be concentrated even further. Remember, most of these "failing" newspapers are still turning a profit - they're just not making the same obscene profits Wall St. has demanded in the past.

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