Murdoch to Washington: Stay out of the way, but please help

Rupert Murdoch is sending mixed signals. Under no circumstances does he think the federal government ought to step in and help float newspaper publishers through their current difficulties. But the key to the future solvency of news organizations lies, he suggests, in government hands.

Confused yet?

Murdoch spoke Tuesday morning at a conference in Washington, D.C., hosted by the Federal Trade Commission titled "How Will Journalism Survive the Internet Age?" The News Corp. (NWS) chairman reiterated his longstanding opposition to federal ownership of or subsidies for media companies.

"The prospect of seeing the U.S. government become directly involved in subsidizing journalism ought to be chilling to anyone who cares about free speech," he warned. "The United States has the most robust press in the world because it's the most free of government intervention."

Murdoch decried the suggestion put forth by some that Congress ought to extend a financial bailout to ailing publishers similar to the ones it's already given to banks and automakers. A bailout "subsidizes the failures and penalizes the successes," he said. "Some newspapers and some news organizations will not adapt to digital realities of our day and they will fail.... They should fail just as a restaurant that offers meals no one wants to eat or a carmaker that offers cars no one wants to buy should fail."

If anything, he said, the government is already doing too much to try to protect weaker players in a "constitutionally sensitive sector." Murdoch added: "Government needs to clear a path for companies to invest and innovate by reducing unnecessary regulation and eliminating obstacles to growth and investment" such as current rules limiting cross-ownership of TV stations and newspapers.

Theft? Not Exactly

So the government ought to get the hell out of the news industry's way? Not quite. That's because the scenario Murdoch envisions for media companies to start making profits from their digital content requires significant government cooperation. Specifically, it requires a rewriting -- or at least a judicial reinterpretation -- of copyright law.

As he has before, Murdoch lit into online players "who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production ... all under the tattered veil of fair use," or the limited repurposing of content allowed by copyright law. "When this work is misappropriated without regard to the investment made, it destroys the economics of producing high-quality content," he said. "To be impolite, it's theft."

The problem is, it's not. Not legally. Not until someone with more statutory authority than Rupert Murdoch decides it is. You can't fault Murdoch for championing what's in the best interest of his company and his shareholders, even if it's not 100% intellectually coherent. But what he's asking for is, essentially, a legislative bailout.

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