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CONTACT: Mike Wendy
March 25, 2010
(202) 969-2957
PFF Examines Government's Role in the Future of Media
First in a Series of Papers Debunks New Taxes to Support Ailing Media Outlets

WASHINGTON D.C. - Has traditional media met its match, confronted by the relentless onslaught of digital technologies and business models? Do struggling media providers merit government support? Could government support imperil traditional American press freedoms, and raise First Amendment concerns? These and other questions are examined in a series of papers, the first of which is entitled, "The Wrong Way to Reinvent Media, Part 1: Taxes on Consumer Electronics, Mobile Phones & Broadband," released today by The Progress & Freedom Foundation.

This series peels away at the onion, discussing some of the leading proposals that would put government in a greater role toward sustaining struggling media enterprises, "saving journalism," and promoting more "public interest" content. The series will culminate with a major PFF filing in the Federal Communications Commission's (FCC) proceeding on the "Future of Media" on May 7th.

The drumbeat for government support of the media has increased of late. Along with the FCC's "Future of Media" proceeding, the Federal Trade Commission (FTC) has hosted two workshops asking "How Will Journalism Survive the Internet Age?", the Senate has held hearings about "the future of journalism," and Sen. Ben Cardin (D-MD) recently introduced the "Newspaper Revitalization Act," allowing newspapers to become tax-exempt non-profits in an effort to help them stay afloat.

In the first of the series, authors Adam Thierer, President of PFF, and Berin Szoka, Senior Fellow and Director of PFF's Center for Internet Freedom, take a look at an old idea that's become trendy again: taxing media devices or distribution systems to fund media content. By their view, "such media income redistribution is fundamentally inconsistent with American press traditions, highly problematic under the First Amendment, difficult to implement in a world of media abundance and platform convergence, and likely to cause serious negative side effects."

They argue that imposing taxes on phones, broadband bills or consumer electronics will have many unintended consequences, and grow larger over time. Worse of all, such taxes would undermine the FCC's efforts to expand access to digital networks and services. "Increased taxes on broadband bills might discourage some broadband providers from rolling out innovative new services as rapidly as planned," they note. "And once the new service tax is passed along to consumers-as all business taxes inevitably are-they might be less likely to adopt broadband, or might even cancel existing service. How would that benefit media and journalism?"

The paper may be viewed online here. For further information, please contact Mike Wendy at

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. PFF is a 501(c)(3) research & educational non-profit.



The Progress & Freedom Foundation