HOW TO COMPETE IN THE NEWSPAPER INDUSTRY:

]]]]]]]]    HOW TO COMPETE IN THE NEWSPAPER INDUSTRY:    [[[[[[[[[
                     SUPPRESS COMPETITION             (12/13/1989)
                       by Michael Kinsley
  [Michael Kinsley is a senior editor of The New Republic.]
      [From the New York Post, 12 December 1989, p. 27:1]

            [Kindly uploaded by Freeman 10602PANC]

   Eight years  ago I  wrote an  article about  how the newspaper
industry was trying to prevent  AT&T -- then a national telephone
monopoly --  from going into  electronic publishing:  the sale of
words printed on TV screens instead of on paper.
   The newspapers argued  that AT&T would  smother competition in
this  burgeoning  field.    I  argued  that   the  newspapers  --
themselves mostly monopolies -- were just trying to protect their
lucrative classified advertising from  the advent of ``electronic
yellow pages.''
   The papers  got their way.   The AT&T break-up  decree of 1982
forbade  both the  national long-distance  company and  the seven
regional  Bell  phone  companies  from  offering  any  electronic
information services -- even their own telephone books.
   The field, far  from burgeoning, has  gone nowhere.  Newspaper
companies  are   not  even   trying  to   break  into  electronic
publishing.  Meanwhile their classified  ads are safe and brought
them $12 billion in revenues last year.
   Federal Judge Harold  Green, who supervise  the AT&T break-up,
freed AT&T itself  from the electronic  publishing ban in August.
But  the ``Baby  Bells'' are  still banned  and are  lobbying for
legislation  to  let  them   in.   The  newspapers  and  cable-TV
companies are lobbying to keep them out.
   According to  the National  Journal, the  big newspaper chains
met  in  the boardroom  of  the  Washington Post  last  spring to
organize  their  fight.   The  chairmen  of  Gannet  (USA Today),
Times-Mirror (Los  Angeles Times,  Baltimore Sun,  Newsday, etc.)
and  the  New York  Times  Co.  were assigned  to  buttonhole key
members of Congress.   Every industry does this.   But it's a bit
different when the owners of your  local newspaper, or of The New
York Times, comes calling.
   And newspapers have a unique  lobbying tool.  The Detroit Free
Press, for example,  editorialized a few  months ago that letting
the  phone  companies into  electronic  publishing  ``would place
information  providers  -- such  as  newspapers --  at  an unfair
competitive disadvantage.''
   The  Free  Press,  owned  by  Knight  Ridder,  recently  got a
government-approved  ``joint   operating  agreement''   with  the
Detroit  News, owned  by Gannett.   This  is a  special antitrust
exemption for  newspapers allowing former  competitors to operate
as a business monopoly.
   It's almost a certain rule that when businesses ask government
to save them from ``unfair'' competitors, the result is to stifle
technological progress.
   Corporate  Luddism  is  most  common  in  trade  policy.  Auto
companies,  steel  companies  --  now,  most  shamefully  of all,
microchip companies  -- say,  ``Just give  us a  bit of breathing
room from foreign competition, and we'll shape up.''  Invariably,
it becomes an opportunity for complacency instead.
   A  free-enterprise  think  tank called  Citizens  for  a Sound
Economy recently recounted the tale of the ``Biltmore Agreement''
of 1933, in  which the newspaper publishers  -- by threatening to
lobby for government ownership of  the radio business -- actually
coerced  America's radio  industry  into shutting  down  its news
departments.
   Radio stations agreed  to limit themselves  to two five-minute
newscasts a  day, using  information supplied  by the newspapers,
with no sponsors, no  single story of more  than 30 words and the
announcement: ``See your daily newspaper for further details.''
   The  agreement  broke  down  within   a  couple  of  years  as
newspapers discovered how profitable  owning radio stations could
be.
   The telephone  company, back  in its  monopoly days,  used its
political clout and a lot of fatuous legal and economic arguments
to delay for a  decade -- from the  mid-1960s until the mid-1970s
--  the widespread  use  of communications  satellite technology.
AT&T  wanted  to  protect  its  monopoly  and  its  investment in
underground and underwater cables.
   It is now  almost a decade since  the newspaper industry began
suppressing its major competitor in  the name of competition.  In
that decade, electronic publishing has gone almost nowhere.
   Who knows?   If competition had  been allowed  to flourish, we
might even have had  the crucial innovation by  now: a screen you
can take to the bathroom.

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