Hostile Takeover: Resisting Centralized Government's Stranglehold on America (8 page)

Like the other czars pushing to expand the regulatory state throughout the Obama administration, FCC Chairman Julius Genachowski—Harvard Law classmate and longtime political ally of President Obama—has ignored both the courts and the Congress in order to impose net neutrality regulations. Using a very loose interpretation of the FCC’s authority, the agency proposed new rules to put the FCC in charge of the Internet, the emerging center of power in the world of information. This led to a sharp rebuke by the courts, which slapped down the regulations, stating the FCC clearly did not have the authority to regulate the Internet; only Congress, not unelected bureaucrats, can write the laws to provide such authority and they have not done so. Undaunted, the FCC took a second run at the regulations, issuing final regulations in December 2010 that provide the agency with control of the Internet. Those rules took effect November 20, 2011.
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This is yet another example of the growing muscle flexed by the executive branch, expanding government power against the intentions of Congress. For the sake of innovation, the courts should remind these information czars just who, under the Constitution, writes the laws of the land.

FEWER EYEBALLS

I
N THE LAST TWO DECADES, THE INFORMATION CARTEL HAS CRUMBLED
. In 1980, more than 52 million people tuned into the networks’ evening news shows. In 2006, 26 million did.
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Recently,
CBS Evening News
, which once commanded the attention of upwards of 20 million viewers, couldn’t muster even 5 million.
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Most of the people who still watch probably do so only out of routine. By late 2011, roughly 75 percent of nighttime network news broadcasts were outside—that is, older than—the important 25- to 54-year-old target demographic.
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Newspaper circulation has been on the decline too, dropping by 8 million subscriptions between 1990 and 2004. Over the same period, the number of U.S. households grew from 93.3 million to 112 million.
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The number of daily newspapers in the U.S. has been steadily declining since 1940, dropping by more than 400 through 2005.
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While the trend had been occurring for years, recent data is no more reassuring for the establishment journalism’s cheerleaders. Twenty-four of the twenty-five biggest newspapers saw a decline in weekday readership between 2009 and 2010. The
New York Times
dropped 8.5 percent. Only the
Wall Street Journal
saw a small increase of 0.5 percent.
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Why this erosion in audience and readership? Simple. The people finally had a choice. The web offered a new way to share information that was increasingly accessible to average people. A modem was all one needed to connect to vast, if still highly unorganized, quantities of information. Indeed, the first industries to recognize the potential of the Internet were media outlets without a national distribution. The Internet negated the need for expensive printing presses, distribution overhead, and the nineteenth-century model of delivering paper copy.

Even more revolutionary was that citizen pamphleteers and homegrown investigative reporters suddenly had a ready avenue to the connected world. True, the promise was still much grander than the reality at that time, but the opportunity was before everyone: plug in, connect, inform.

Slowly but surely, the American people started to realize they no longer had to rely on the Big Three networks, the
New York Times,
or the
Washington Post
for their news. The old model that Liebling wrote of began to crumble: American news consumers didn’t have to spend a day tracking down an out-of-town newsstand to get the rest of the story or hear a dissenting voice. All they had to do was surf to a different website.

Of course, reading different outlets, critiquing old media, and disseminating your own views constituted just the first wave of the “New Media,” which saw the explosion of self-funded blogs around the time of the 2000 election. Indeed, many of the most popular blogs today—like Instapundit, Hugh Hewitt, and Michelle Malkin, to name just a few—all began during this first phase. In time, everyone had his own blog. But this was only the beginning.

DEFENDING THE CARTEL

T
HE ABILITY TO CONTROL THE FLOW OF INFORMATION IS VITAL FOR
centralized politics. Just look at the communist states of the twentieth century, each of which repressed free speech and operated their own media outlets. The new attempts to control the media in the United States are defended through a progressive lens: information must be sorted through by experts, and knowledge vetted by the most knowledgeable among us. Leave it to experts so that nothing is left to chance. This is the “public interest” rationale used by FCC bureaucrats to justify their various Internet power grabs. This, ostensibly, is also the rationale of Democrats who pushed for the reestablishment of the Fairness Doctrine. But in both instances, one suspects another, less noble motive. One of those Democrats demanding radio “fairness,” as it happens, was none other than Senator Charles Schumer of New York. In 2008, the day after the election with Democrats approaching monopoly control of the executive and legislative branches of government, Schumer told Fox News that he supported government controlling the content on talk radio, saying, “The very same people who don’t want the Fairness Doctrine want the FCC to limit pornography on the air. I am for that. . . . But you can’t say government hands off in one area to a commercial enterprise but you are allowed to intervene in another. That’s not consistent.”
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That’s right, the same Senator Schumer who would later anoint himself the sole arbiter of speech content inside the walls of the Russell Senate Office Building wanted to control speech on the radio in 2008. The same Schumer, now chairman of the Senate Rules Committee, who told Senator Mike Lee, through Rules Committee staff, “that the event has to be moved.” He seems eager to try any means at his disposal to control what you can say, hear, or, presumably, think. Schumer saw then, through reimplementation of the Fairness Doctrine, a window to reassert his control over your speech.

I’m not certain of the legal definition of tyranny, but I know it when I see it.

For good reasons, this attempt to control talk radio never gained traction. But in March 2009, with a number of major news corporations on the brink of default, Democratic senator Benjamin Cardin proposed what the
Hill
described as a “newspaper bailout bill,”the coyly named “Newspaper Revitalization Act.”
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The proposed legislation “would allow newspapers to operate as non-profits, if they choose, under 501(c)(3) status for educational purposes, similar to public broadcasting. Under this arrangement, newspapers would not be allowed to make political endorsements, but would be allowed to freely report on all issues, including political campaigns.”
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Free to report, that is, what is deemed to be “in the public interest,” as determined by the government officials fortified with the monopoly power to make your business go away.

“I haven’t seen detailed proposals yet,” Obama said of Cardin’s proposal, “but I’ll be happy to look at them.” Why? “I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding.”
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There it is again, our top government official slipping easily into a presumption of which news is “serious” and which is mere “opinion.” Do you trust Barack Obama and Charles Schumer, or a free community of bloggers scrambling and digging to get the story first, and to get the story right? It’s the difference between central planning and robust competition that exploits the personal knowledge of dispersed individuals.

The Truth Cartel is pushing back, trying to protect its cozy relationship with the old institutions of the media that limited our direct access to things. But how could any single person actually have access to all the particular facts, as innumerable as they are, and always be able to know better, with certainty, what is legitimate, serious news, and what is just “people shouting at each other”?

(ONLINE) VIDEO KILLED THE RADIO STAR

T
HE DISAGGREGATION OF INFORMATION ONLINE COMPLETELY
changes the way we discover, learn, share, and organize. The new paradigm is a rowdy, decentralized model of exchange in which news consumers bypass the gatekeepers to share facts and opinions directly with each other on a grassroots level. This democratization of information and knowledge formation online is, in effect, radically Jeffersonian, enabling We the People to find out for ourselves what is actually going on inside the government fortress.

Today the New Media, made up of independent newspapers, online news outlets, blogs, radio shows, podcasts, and more, are breaking news and driving the conversation. In an age in which a “citizen journalist” can capture images or video of a news event on her handheld camera and immediately upload it to the Internet, it’s impossible to calculate the reach and impact of the New Media. American ingenuity drives us to continue to find new ways to use the tools we have—whether Facebook, Twitter, or smartphones—and the old methods of tracking influence are no longer applicable. The Old Media’s ability to control the content and flow of information is dead and gone. The nature of the decentralized structure simply won’t allow it.

The American people still turn to traditional media for news, but it’s clear they prefer options less encumbered with bureaucracy and tradition. CNN’s website, which leads other “mainstream” news outlets on the web, averages roughly 8.5 million unique visitors a day,
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compared to 800 million active users on Facebook, more than 400 million of whom log in on a given day.
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Impact is now measured by outcome, rather than with ratings and hit numbers—the way the Old Media calculates their importance even in the new paradigm. Stories the centralized news media and their friends in Washington, D.C., used to be able to ignore are now seeing the light of day, and the grassroots, bottom-up model for dissemination of information is proving to be even more potent than the old guard feared.

Drudge Report
was the pioneer of this model. It began in 1996 as—and largely still is—a one-man operation, little more than a clearinghouse of the most interesting stories of the day, from anywhere in the world. In fact, according to a 2011 report from Outbrain, a content recommendation engine whose clients include the
New York Times
,
The Atlantic,
and the
New York Post
, Matt Drudge drives more traffic to news sites than Facebook or Twitter combined, even though these sites dwarf
Drudge
in unique daily page views.
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This is not to discount the impact of Facebook or Twitter. Rather, it reveals that the “one guy with a modem” power of the Internet still exists even today.

In June 2011, Glenn Beck left his successful program at Fox News (where he helped create a boom in sales of F. A. Hayek’s
The Road to Serfdom
) to start GBTV, an Internet-based live streaming video network. The move represents one of the latest, and potentially the most radical, departures from the one-size-fits-all mentality of mainstream media. It is a logical step in the market-driven evolution of news media, away from the top-down to a decentralized system where the customer is always right. Speaking at a
Business Insider
conference on the state of the media industry, Beck described the high speed with which the world of media is disaggregating as the “most dangerous and the most exciting era of our lifetime.” We used to “go to the Sears Catalogue and get it,” Beck argues, referring to the old centralized model of doing business, necessitated by the pace of snail mail.
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With the Internet, customers now find the products and entrepreneurs they want online, cutting out the middleman, eliminating a need for a Sears catalogue. Our entire society is individualized, publishing, in effect, our own private, virtual Sears catalog every time we choose. We go to print in real time, based on what we do, view, reject, buy, and consume.

“This is the struggle,” Beck told his media-industry peers. “This is the answer for business. This is the answer for the [TV] networks. This is the answer for politics. The individual is the answer. You have the opportunity for the first time in all of human history to connect with the individual. Stop trying to be all things to all people. It won’t work. It worked in 1950; it won’t work in 2050.”
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When GBTV launched, on September 12, 2011, Richard Greenfield, a media industry analyst from BTIG, predicted “a watershed day for the media/television industry, with Glenn Beck set to launch a direct-to-consumer video network utilizing IP-enabled devices called GBTV. Despite the significance of GBTV, top media executives are not terribly focused on what Glenn Beck is doing, let alone concerned by it. Yet,” Greenfield predicted, “we believe they should be very afraid of the disintermediation underlying the launch of GBTV.”
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The new Internet-based network began with 230,000 subscribers, compared to an average of 156,000 watching OWN, Oprah Winfrey’s new yet traditional cable network.
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It’s as if Glenn Beck’s business team, in addition to his Fox viewers, were encouraged to read up on their Hayek as well.

NOT AFRAID OF AUGUST