Proposed legislation to tax internet providers for sharing news stories will create new barriers to access information and “break the fundamental structure of the web,” according to a new paper authored by media expert Jeff Jarvis and released yesterday by the California Foundation for Commerce and Education (CFCE).
The California Journalism Preservation Act: Analysis and Alternatives, is the most comprehensive analysis of the potential impact of The California Journalism Preservation Act—AB 886 (Wicks; D-Oakland). The legislation will also force internet platforms to pay publishers for the right and privilege of quoting news headlines and linking to their news sites, and requires internet platforms to submit to arbitration to determine the level of support that would be paid to journalism providers.
“The newspaper industry is struggling and looking for a lifeline,” said Jarvis, the Leonard Tow Professor of Journalism Innovation and director of the Tow-Knight Center for Entrepreneurial Journalism at the City University of New York’s Craig Newmark Graduate School of Journalism (Emeritus as of August 2024). “But the proposed legislation is a fundamentally flawed and counterproductive manner in which to try to resuscitate it.”
Jarvis notes in the paper that by demanding payment for quoting and linking to content, publishers are seeking an extension of copyright and a diminishment of fair use — generally known as “ancillary copyright.”
According to Jarvis, “These so-called link taxes violate copyright law by diminishing long-held principles of fair use. They are constitutionally questionable, impinging on the First Amendment rights of internet platforms to choose what they carry. Link laws are widely seen by internet advocates as breaking the fundamental structure of the web.”
The new paper reviews the history of the news industry, the reasons for the financial decline of newspapers, and the failed attempts by Canada, Australia, and other countries to revive the news industry through taxes on internet use. The paper also presents options and perspectives about what the state needs to support the information ecosphere and the alternatives that are available to set a long-term course for the news media.
In addition to the questionable legal foundation of the link tax, the paper found:
- Links do not harm but actually benefit publishers. According to Jarvis, “When search engines link to news sites and when readers, journalists, and publishers post links to articles on social media, the platforms are not stealing content, as publishers and their lobbyists contend…The platforms are instead sending readers to articles on publishers’ sites; they are giving publishers free promotion. What happens once a reader arrives at a publisher’s site is up to the publisher.”
- The CJPA would primarily benefit national and international media far more than California-owned news outlets, particularly California’s ethnic outlets and community newspapers since the bill does not require that a news organization be based in California or serve primarily California residents.
- The link tax would be susceptible to manipulation by extremist propaganda outlets masquerading as news, setting up a perverse incentive to fill the web with more clickbait in order to receive more funding. Similar to the link tax efforts in other countries, AB 886 would result in greater harm to the information ecosystem and the internet.
The paper offers several alternative frameworks and ideas for California’s newspaper industry and recommends that the central focus of policymakers should be the best interests of communities, not just publishers. Jarvis recommends that the state undertake an independent paper that considers how to transition the industry and encourage growth in quality news. Some of the alternatives include the continuation of state advertising, requirements to use newspapers for public notice, tax credits for hiring journalists, public financing of media, and news sharing resources.
Jarvis is a nationally recognized expert on new business models for the news industry. His experience includes his tenure on a digital advisory board for Digital First Media and working for the Hearst Corporation at the old San Francisco Examiner and the Tribune Company, former owner of the Los Angeles Times.
The paper was commissioned by the California Foundation for Commerce and Education, a 501(c)(3) think tank affiliated with the California Chamber of Commerce.
The report can be found here.
