know what it was like to work in schools because education is such an important issue, both for a governor but also for president. so that was very helpful to me. >> using material from c-span's award winning biography series, first ladies. >> i'm very much the kind of person who believes that you should say what you mean and mean what you say and take the consequences. >> and c-span's online video library, we'll feature first ladies, ladybird johnson, betty ford, roesline carter, nancy reagan, hillary clinton, michelle obama and milania trump, watch first ladies in their own words. saturday's 2:00 p.m. eastern on c-span 2 or listen to the series as a podcast on the c-span now mobile app or wherever you get your podcasts. >> local news executives

testified on the negative impacts of tech giants using their content before senate subcommittee.

thank you, everyone, i'm called tots order this hearing the subcommittee on competition policy, antitrust in consumer rights, entitled "breakic the news, journalism, professionalism and the power ou free press," i want to welcome ourr witnesses, we have votes going on now so scenarioer aileo and i will be going back and forth as with other senators at this time but i want to thank him and his staff working with us to put together this hearing as well as my own staff, mark and avery and kaegen for the work they do everyday. some of you will know my dad was a newspaper man as a reporter

and columnist in the twin cities. heew covered it all in an estimatedro 8,400 columns and about 12 million words in which he interviewed everyone from ronald reagan, senator lee, to ginger rogers to chicago bear's coach mike ditka, i won't say his favorite. he was proud to be a newspaper man and as you can imagine in my house growing up it was impossible to forget the importance of a free press and that is what we are here to talk about today, to talk about the critical work news outlets around the country are doing and explore solutions to some of the existential challenges facing journalism. it is truly local news that reports on the issues that people face in their everyday lives. i think about the fargo forum in my home state, actually, of

minnesota next to north dakota that includes more, when the floods, catastrophic floods hit thegi area. that newspaper and the local broadcasters were the one coveringev it, morning people, giving them the news everyday. i think about investigative journalism at the local level with everything from city council scandals, not that those ever exist, to all kinds of things that would not be covered.y i think about the sports games for high schools and the pride that people have in their local community events. all of this brings the community together in different ways.al they find stuff out, they have common, common information that they can look at in addition to what they see nationally which sometimesto can seem very distanced andad larger than lif. what are local news does is often times tells a story of

what my dad called ordinary peoplele doing extraordinary things. and as i said, this work not onlyly connects communities, it alsone helps policy-makers bett understand how t issues are impacting their constituents and helps them n to figure out what you needs to be done.e that's why it's critical that we ensure that local news can not only a survive but thrive, particularly as outlets face off with some of the biggest companies the world has ever known. local news is o facing a crisisn the u.s., since 2005, about 2,200 local news papers have closed and many that remain are on m life support. between 2008 and 2019, newsroom employment fell by 51%. with muchh smaller newsrooms, surviving outlets are often mere shells of theiril former selves.

i was thinking of that troubling photo from the denver post where the journalists show a picture of everyonee smiling and a few years later show the hallowed out images, silhouettes of the journalists who areen no longer there, less thanre half of them left. as you know, local newspapers aren't m closing or drastically reducing theire coverage becaus of a lack of talent or a passion for the work, and yes, many of them have online presence and theyse have tried their best too that. but inrll fact, the real probles a lack of revenue. ad revenue for u.s. newspapers plummets from over 37 billion in 2008 to less than 9 billion in 2020.? 37 billion in 2008 to less than 9 billion in 2020. what else happened during that time? well, ifpo you see the ad revens of, for the world's biggest companies, you'll see the exact

opposite story being told. facebook and google, worth over $2.6 trillion combined aste i speak became digital advertising tightens during that same time. just yesterday, google reports 61 billion in advertising revenue in a single three month period. a 33% njump. i say to my colleagues a 33% jump from the same period just lastr year. look at those, numbers. 61 billion in just three months for one company. 61 billion and you have u.s. newspaper revenue from '08 to 2020 going from 37 billion to nine billion. as one of my colleagues said during the n presidential race,o the math. it's not a that hard to figure out. do the math. these big tech companies are not friends o to journalism.

they're raking in ad dollars while taking news content, feeding it to user and see refusing toh offer fair compensation, and they're makine money on consumer's backs by usings the content produced by news outlets to suck up as much data about each reader as they can. so it's kind of a daubl whammy, right, they're the big guys, bringing in the content, not compensating forre it as they should andhe at the same time ty are getting the revenue off the consumers that read the content that then don't go to the one that is are producing the contentt so that data really exacerbates what is already a huge divide in where the revenue goes. how much do these companies care about retaining this power over theie news and reader data? they care a lot. enough to even hold entire countries,or industrialized nations hostage as we saw happen last year in australia.

when google was told by the government they'd have to pay for the news content they wanted to use, this is the australian government, the company essentially said we're out of here and y threatened to pull google search out of an entire country. that's what monopolies do, what you do when you can do it because you have over 90% of te search market, google didn't follow through on the threat because in part there was so international pressure to stop them from doing it but facebook actually switched off all news on its platform to protest the law, only reversing course after a few days under immense outside pressure. f and what does big tech's dominance over the news mean for americans? as i already noted, less revenue for localnd news, fewer journalists to i do in-depth, hh quality reporting, more exposure to misinformation ands fewer reliables. sources.

while the rise of these platforms sometimes meant a larger audience for some news outlets that hasn't translated to increase f ad revenue. for years, i've heard concerns about things like the platforms do not provide adequate branding forl news outlets original content on the platforms. that they hoard for themselves all the data on the users that access the news content produced by newson providers through the platform, that they publish large snippets of newspaper content to attract users to the platform without any compensation at all to that news outlet and repeated complaints to google and facebook from news broadcasters are ignored because that's what a monopolist does, ignore things, use the market dominancee to elbow others out

and maintain control, that's why we need to step in to level the playing field as other countries are doing. we're here to talk about how to give these news outlets a fighting chance, i teamed up with senator f kennedy to lead e bipartisan preservation and competition act, our bill gives local news outlets the ability to collectively negotiate for fairnf compensation with compans like google and facebook so they can continuepa to invest in the kind of quality reporting that keeps us all informed, and we're working with t our bipartisan partners in the how's of representatives on improvements to the bill. we're ready to take all ideas and address all challenges raised by our colleagues because we believe there's a way to do this fairly, to make sure that allin news outlets are included to better help correct the better, the imbalance in bargaining power between news

papers and big tech. we're looking at this, a clear frame work for good faith negotiations between news organizations and big tech, mechanisms to help make those negotiations go smoothly, protections tons prevent discrimination against news outlets based on the political views they express, and provisions to better pen sure that the interests of small, independent news outlets are paramount in any joint negotiation. ir also f introduce the future localol news act to help local outlets chart the path forward as theyy recover from the pandemic, and i'm working with mymy colleagues to pass a local journalismav sustainability acto help americans pay for newspaper so all this said, if we were living in a perfect orld where we didn't have monopoly search engines and platforms with some cases over 90% of thebe market and able to pass some of the bills i have, my colleagues haveer on a

bipartisan basis, senator grassly to even the that playing field, maybe we wouldn't be where we are but we are here because we have a crisis going lost over 2,000 news outlets and that is why we've come upont this targeted approach tog protect the first amendment, to protect the news organizations we believe are so critical to making sure that the first amendment stays stron we need p to recognize what separas the news. from vast majority of other industries is the crucial role in our democratic system of government, that's why our founders tried freedom of the press in the first amendment so when the exercise of monopoly powerth exercises in an industr it's important for our democracy react. it's also important to local communities and economies, the closures ofta local newspapers n lead to higher municipal borrowinge costs and higher

inefficiency, this means less money fortr schools, hospitals d roads. thomas jefferson said our first objective should be to leave open all avenues to truth, end quote, and that the best way of is, quote, the freedomea of the press. end quote. thato rings especially true today. a as elected leaders, we certainly may not always what we read or hear in the news, i think all of us can relate to this but i think weay can all agree ensuri the future of a vibrant and independent free press is essential to the fabric of our democracy and the american waym of life. thank you, i now turn it over to my colleague senator lee for his opening statement. >> thanks so much, chairwoman. i think today's. hearing is important. i look forward to it for a virus of reasons. i think it will be illustrative on a number of fronts, first, involves what ails the news

industry, news publisher do in fact haveva a legitimate beef wh google, facebook, and duopoly, a problem. google e and facebook's unrivald markety power in digital advertising imposes a de facto tax onat every business that places or makes money from ads which is a large swath of the 21st century economy and i'm grateful to you, madam chair, along with senators grassly and blumenthal for working with me in my office to help tackle that two-headed hydra which does need to be tackle and we have a lot of agreement on that issue. i also think that it's important to t ask the question whether that's really news publisher's

only problem. i don't think it is, in fact, i think it's farsi from that. now, our witnesses today may not exemplify it, i'll assume for purposes ofic our discussion toy that they don't. but there are a number of voices in the mainstream news media that these publications are rife with t shoddy and extraordinari biassedd reporting that many consumers simply don't trust or in any event, don't want to spend a money consuming. there are too many exams to cite all of them, but i think it's important to point out, at least a fewig of them. you know, the steal docier a work of purero fiction, across e country, blind by their

empassioned hatred of the president trump helped to prove thein docierre's lies even afte it was proven false. we're still waiting on the restrakzs. or what about the washington post defamation of covington catholic high a school student nicolas salmon or the post's description off islamic state leader adu baker as a, quote, austere religious scholar and who can forget the new york times reporting that russia placed bounties on the heads of american soldiers which was dutifully parroted by other outlets in the run-up to the 2020 presidential election. it it wasn't until after president biden was inaugurated theyow felt comfortable admitti the story didn't hold up. missione accomplished, i suppos. i know senator cotton will recall how his suggestion that

covid-19 may have been leaked from a lab in wuhan was scoffed at and derided with personal attacks against him for saying that and it turns out he was right. so howti did the media respond? well they still had their original reporting to pretend it never happened. this last month, in the last few weeks, salt lakerd tribune's editorial board literally said if you tell a more just, decent place, the national guard would be u mobilized to in effect, ho people under house arrest orders if they were unvaccinated. so the fiery but mostly peaceful protests of the summer of 2020,

the denials that critical race theory is being taught in the schools, these things add to and constitute part of this list, along with quote-unquote, temporary inflation and the list goesou on and on. c look, today's news media is often ay source of misinformatin and it's one of the leading causes when it does this of socialfr discord and political upheaval,, especially when it doesn't even acknowledge its mistake and see its mistakes appear so frequently, so consistently, so constantly, to lean one direction and not the other. self-pro claimed for the state loves to preachma for the masse about democracyha dying in darkness while they themselves turn out the lights. on top of the fact the mainstreamam media is selling something that in many cases

people don't want, there are also the series of poor business decisions that a have been made withinie that industry. during the years in which they make comfortable profits, almost nothing in some of the companies at least was reinvested into the business to innovate and to grow in response to changing technologies. andpe when the market changed wh the advent of the internet, forcing newspapers for the first time to face meaningful competition for advertising dollars, many publishers just went allot in on an advertising-only business model even abandoning subscription revenue for online content. the bottom line here is that whatever a the changes that the news publishers are facing, as a result of big tech's dominance over digital advertising, for some publishers, perhaps for

many, they've got other problems. and for someli of them, perhaps for many, it may involve inferior product quality and failure to take into account evolving technologies to adapt their business model. the second thing that to set straight here is that what we should do about this, or rathers what we should not do also matters. the lasts thing i think we shoud do is to try to solve this or any competition problem by saying that it's okay by just, not, just saying it's okay to accept a cartel, that it's okay to makeub changes to the laws, allow the formation, thereby encourage the formation of a cartel as many publishers are requesting and make no mistake, that is what this is. that is whatt this call is for.

and that is what the jcpa would do. what we're not talking about and arguably pro-competitive type of competitor collaboration on some sort of run-of-the-mill joint venture, this would be competitors f themselves colludg with the approval of law against a common business partner in order to fix a problems that they're facing. now, there's a lot that senator kloveshar and i have agreed on and one of the many things we've agreed upon are a lot of areas within antitrust law. we had a fantastic hearing, back in po2013 i think it was when w talked about cartels and senator

said cartels have no other purpose ought g than to rob consumers and i agree. and i certainly think we're not going to beer better off by givg a cartel formation hall pass to an industry that's been ravaged by a number of other problems that i've identified. thisan ends up passing those problems along to consumers, the very same consumers being forced in many cases to accept inferior product and product hackary goes along withh it. i know publishers, including many witnesses today believe they wouldhe benefit but legislation lukee the journalis account preservation act would do far more to help the new york times and far more to help the washington post than it would the benefit for local journalism in salt lake city or minneapolis. the only way to fix this is by

encouraging competition and allowing it and promoting it, not eliminating it and certainly not giving people a hallpass to engage in contact that would challenge, threaten and undermine it. finally, as i understand the authors in the jcp are rewriting that bill in an effort to mirror reforms in australia and the music licensing system of the united states and i want to mirror my frustration that the majority hasn't shared draft text with it. it's nearly impossible for witnesses to prepare fore a hearing wherere the draft legislationive solution is still floatings around but not publicy available foror senators and fo the american people for that matter to review. with allou that said, i would lk forward to this hearing and

hearing from ourbu witnesses an their contributions. >> thank you very much, i would also note the a venue bill we didn't have any hearing on that and we are here having a hearing on this, and i'm, of course, the lead o author of that, but i thk i went through after our last discussion on my innovation bill and found dozens of bill including led by republicans where thef hearings were either at subcommittee level or there a hearing and we were able to have a mark-up and a discussion of the bill based on hearings such as the one we're having today. so i just think we, after we're done with thiss hearing we shoud look at that history because we would be putting on hold the venue bill and many others if that was our new standard that would be suddenly adopted this week. i'mthin now going to introduce witnesses thathe are before us

todayy from the local news area something near and dear to my heart, why i feel strongly about thists bill, jennifer berteddo, president and ceo of trim total media located outside of pittsburgh, the company operatec daily paper with a circulation of approximately 35,000. 11 weekly community news papers with smaller circulations and a handful of monthly news papers. mr. berted -- ms. bertedo been with the company 20 yearlies, from advising director to chief operating officer to o presiden herrd first job in the news business was taking baseball scores from the local baseball and soccer leagues at the age of 16, also serves on the board of the news media alliance. next up, joel oxley.

mr. oxley is general manager of w-top news, anyone in the d.c. area you've heard w-top it is a dc area radio stationon owned b hubbard broadcasting happens to bemr located in minnesota, over 100 local journalists and known for local news programming, the station first went on the air in 2006, mr. d oxley joined w-top 2002 and worked up to the general manager -- dan gainer is a vice-president of free speech the ca and business for media research center, a nonprofit organization working on alleged liberal media bias, a commentator for fox and a spot on the one original news network. prior to joining the research center, mr. gainer was an editor

onng several newspapers includi washington times andor baltimor times. american. next,ho last but not least, danl francis, mr. francis, dr. francis is a lecturer on law at harvard law school where he writes about regulation and competition. his research focuses on antitrust as well as constitutional and other rules thatnt facilitate, constrain an shape. regulatory action and competitive processes. he is of particular interest in digital markets, dr. francis preexistedly served as senior counsel to thee associate director for digital markets and ultimately, deputy director. another witness that's here with usnd virtually, hal singer. dr. singer is an economist who has researched, published and testified onn competition-relatd issues inub a wide variety of industries, including media,

pharmaceuticals, oosports, and finance. late last year he published a pafrp commissioned byy the news media alliance about the impact of google and facebook on news papers,, finding that google an facebook under compensate news papers for content and advertising. if the witnesses would now please stand and raise your right hand. the testimony you give before the subcommittee shall be theiv truth, the whole truth, and nothing but the truth so help you god? thank you. let the record reflect each of the witnesses answered in the affirmative. you may be seated and i will now recognize the witnesses for five minutes of testimony each and as i noted, we invited all the senators on the committee as we always do to this hearing so we will begin with you,

ms. bertedo. thank you. >> chairwoman klobuchar, ranking member lee and members of the subcommittee, thank you for the opportunity to participate in ma today's hearing, my name is jennifer bertetto and i am president and ceo of trim media, delivering new and see advertising to four counties in souths western pennsylvania, ou company is 272 employees strong with dailyly and weekly news par circulation and hyper local communityig websites that compre our news net worry, 88 journalists, photo journalists, editors and designers, our award winning journalism is why our flagship website draws more than 300om million page views each year. trim totalnsfo media's commitmeo delivering high w quality journalism dates back to our founding in the 1800s, our

kpaens was transformed in 1990s with thee purchase of our in company, we remained focus on providing localvi news to our communities, but with the rise of the internet we recognized we needed to shift our focus from print toew digital. having done that, we're proud to present our flagship website for free, our testament to the commitment to the community and making news accessible. i've worked my entire career in the news industry, starting out of college and working my way up to presidentws and ceo in 2015. i've seen firsthand the changing nature ofla news consumption an distribution and can test the news industry faces a dire and insurmountable challenge. leveling the playing field against the vast power exerted by dominant digital platforms. i'd like to discuss three main points. first, local news papers are under incredible financial pressure, and we must ensure that the people who create high

quality journalistic content are compensated for it. withbl the growth of the digita platforms we saw our readership shift to fewer subscriptions and then cancellations. to become n profitable, in 2015 we restructured our business. we closed two news papers, sold three other and see made the difficult decision to lay off more than 150 employees. in 2016, we published our last print edition of the pittsburgh tribune review and moved to market online. these decisions were essential to stay in business, but they have ramifications to this day. several communities inn southwestern pennsylvania are considered news desserts not served byat any local news pape. second, access to news online become concentrated on two platforms, facebook and google which serve as gatekeepers and determine how news is displayed, monetized, without compensating

the journalists who create the content they rely on. techri platforms become gatekeepers controlling access s to news. my company's original content on theirg sites. sadly, most d americans get the news from these platforms who are raking in record profits by simply curating content, suddenly devalued the pain steaking work by real journalists. on google alone, 65% of users don't leave their site to click through to a news paper's website, o depriving the websit of the add dollars it brings. some say they fail to modernize and that's r nonsense, even wit restructuraling and digital we did s, no matter what we was not enough to level the playing field. publishers are stock between a rock and a hard place, we carry no weight in negotiations with platforms, do notrs have the stature to bring

them to the table, but there's a solution,ks the journalism competition a and preservation t would give journalists a seat at the table to negotiate fair terms for use of our journalism, thanks to senator klobachar and kennedy, would develop inrespective off size or politicaled persuasion, to collt from the platforms for fair compensation for theni use of oe content. it's imperative journalists are fairly compensated and jcpa would allow ust opportunity to seek just that. the bill does not prescribe the outcome, but it allows the opportunity to seek fair compensation requiring the parties to negotiate in good faith, to receive fair compensation for our work would enable smallan publishers like company to invest more in communities, hire more

reporters, increase quality, fact-based news. thank you again for the opportunity to testify in today's hearing. >> next up, leers mr. oxley. >> good afternoon, chair woman klobachar ranking member lee, my name is h joel o kbrks ley, w-t news, all owned by hover broadcastings, with 13 television stations located in minnesota,a, new york and new mexico and 50 radio stations in missouri, arizona, washington, florida, washington dc, i appreciate the opportunity to didd testify on behalf of the national association of broadcasters and its more than 6,600 free and local television and radio station members in yourha hometowns. broadcasters represent one of the lastth bastians of truly lol unbiassed journalism, information still respected by all americans. constituents turn to local reporter and see anchors for

voices they trust. legislative action including swiftt passage of the journalism conservationon and presidenter vague act, jcpa is essential for the corner stone of our democracy. journalists face existential threat whose fate increasingly rests in the hands of a few dominant platforms, we continue to engage this challenge and s move for critical journalism, whenti needed most, local statis provided the civic bond for the community we're serve. more importantly, wehe continueo be thema primary source of the community-focusedd information n which your constituents relied on the pandemic from health and vaccine resources to vital information on schools and businesses. i've been in the jee news busin since college, when i wrote for the school news paper and was caster at the radio station,

worked19 with chicago tribune before joining wtop three decades ago where i worked up in sales and management before becoming gm in 1998, i understand the costsc of producing quality journalism, keenly aware of theay resourceso invest in the type of equipment necessary to serve o the public day in, day out, 365 days a year. quality journalism delivered throughhe our uniquely free service only made possible over thee decades through advertisin revenues. as you are all aware, these revenues experienced a freefall inwh recent years due almost exclusively to the rapid, almost anticompetitive expansion of the dominant onlinead platforms who upended the advertising market place. the market power of the tech platforms undermines the online advertisingg model for broadcas journalism in two important ways. first, the tech platform's role as gate keepers stifles our ability o to generate traffic,

second, anticompetitive terms of service and a take it or leave it approach leave local broadcasters with a below market sliver of thosern advertising revenues derived through products. for local broadcasters and our viewers and listeners who rely on localr journalism is a real catchac 22. thegl terms of access dictated onlinep platforms to value our product, for example, not only isay wtop being compensated by facebook and i google for its - not being compensated -- wto is actually paying to make sure its content is being accessed on their platforms. t even more concerning is the degree to which certain platformss commoditize news p content with little regard for the quality and voracity on the story, putting us on par with click bait as we compete for news feeds and search results.

there is no doubt the tech platformss prioritize content that is sensationism over hard journalism, the dominant platforms have flourished, siphoning huge amounts of revenue that are the lifeblood of journalism, consider the story that flew through the northeast thisgl weekend, a nor easter, tons of work and time for broadcasters to cover for millions of people but not for facebook, google and the like, simply take our coverage and profit from it and virtually nothing comes back to us, but without local news my guess is a lot of people would not have evacuated places like cape cod last weekend and lives would have beena. risked. we just can't have that. in conclusion, this committee can address these concerns for the passage of the jcpa, we thankg senator klovachar for introducing, strongly support thetf jcpa which would level th

playing field creating a safety harbor for broadcasters and certain t digital publications compete with which the y terms d locations their content is featured online. thank you for the opportunity to appear today, i welcome your questions. >> thank you, welcome mr. francis.tteeee >>me chair klobachar, ranking member lee, members of the subcommittee, as a former antitrust fenforce rs i strong subcommittee's focus on digital monopoly and want to acknowledge the seriousness of difficulties many publishers are facing across the country today while doing some of our most important work, that i cannot think of anything the country needs less now or ever than a national news media cartel. i want to make just three points. point number one, cartels are the supreme evil of antitrust.

they're so reliably harmful that we extradite and imprison people who form them, they're y automatically illegal in civil litigation, and for o decades t justice department had a flagship policy project of fighting cartels and opposing exemptions just like this one. now, congress licensed cartels a handful of times over the 130 years of our antitrust laws but always with great caution and not always with happy results. .2, i think the real complaint i hear from the publishing industry is not so much about monopoly but about property rights on the internet. so i appreciate the publishers complain that platformsyi and users can share links to websites and get fair use previews to news websites a sentence or two long without

paying and argue that's evidence of nonopsony power because platforms are profiting and they're not paying for those rights, but this is not evidence of monopsony power, they're not providing a link for free monopsonous, e it's because our property laws, wisely, don't give a website owner the power to vet oh or tax linking or fair use previewing of that website. and it's pretty easy to see this hasoday nothing to do with monoy power, if somebody had the coding ability in this room could start an app today and link and preview websites without paying for that privilege. our lawe gives everyone that freedom and i think that's a really goodf thing. links are the lifeblood of the internet, imagine how hard it would be to write even a traditional f article or book i

youof couldn't cite a source or quote a sentence or two without paying for thatte privilege. and now imagine the consequences of i that rule for our internet today. r so despite the framing, my strong sense is that this is not really abouto monopoly or monopsony at all it's a request to dramatically expand profit rights on the internet and then allow that property right to be sold by a new national news cartel with major media conglomerates at the hem. i think whatever antitrust reform we need today, and i think we need some, this is not that. .3, i think we're going to hear today about counterveilingot power, i thinknk that's a red herring. it's true inn economic theory i you have a single dominant buyer there is ann argument the total welfare can be improved if you let them form a cartel at least in the perfect worldld of theor

but i think that's not applicable here, number one, i don't see evidence of monopsony power at all, again, platforms aren't linking and previewing for free because of buying power, they're linking because that freedom is theirs under our property law today so this wouldn't be a cartel that would correct buyer power, ity would create new seller power. that's a monopoly sur charge on all the news in the united states, a cascading down the supply chain, driving up prices already too high and second the harm would far out weigh any good, skpiet the size of the platforms it actually doesn't look aop like like they hold monopoly power in news today but a national news cartel sure would be ane monopolist, i thin the subcommittee would be really concerned if even two of the major publishers were to propose ans merger, the idea we'd put tm all together under one roof to agree on rates and terms and

business models strikes me as a consumer's nightmare, the antitrustul agencies here, pret creative, but sometimes fragile black board a economic theories about whyhi we should tolerate harmful conduct, i don't think the agencies would accept this argument and i don't think congress should either. i think it's best thing we can doe for competition in news is significantly increase our funding for the antitrust enforcers, i think that's the most urgent thing we face, thank you and i welcome your questions. >> next up, dr. singer who is here in person so thank you. >> b thank you, subcommittee, thank you to the subcommittee for invitingns me to speak toda on the most serious issue. i want to begin on a slightly lighter note however, giving a shout-out to my mom who turned 90 this month, watching this hearing the old-fashioned way on c-spando and not forgiven me toy for becoming an economist rather than a lawyer. thele concepts here are complex and require a loft ink but i'll try to boil them down, by

answering three questions. one, what is the competition problem this bill seeks to solve?he two, what are the social harms that flowms from the competitio problem, and three, how would a targeted bill address the competition problem is in of? regarding the competition problem,ap two platforms, googl and facebook monopolized the digital advertising industry, capturing 61% of all digital advertising dollars because of their ability to collect consumer data across the web. 70% of referral traffic to news papers originate from just these two sites, this makes news publishers completely beholden to thewa dominant platforms for viewers and advertising dollars and the resulting power imbalance ensures the market rate foror accessing news conte willll always be below competite levels. google and facebook achieve their dominance in the mid oughts, with the countless competitors, like instagram and

youtube, as well as critical input suppliers like double click andrm add mob. also, not by coincidence, newspapers began losing advertising, mainly to the t platforms. according to pew research, newsroom advertising declines from 37 billion in 2008 to 8.8 billion in 2020, and if these trends are left unchecked, we n might not have local newspapers in the near future. now l the reason why google scrapes indexes and posts news publisher content for free is because it can. it's like a school bully eating aew smaller child's lunch. so long as market forces are allowed to dictate the payments forr accessing news publisher content the access price will remain zero and news publishers will remain deprived of the

billions per o year on the platform. turning to my s next question, e under payment to news publishers results in under deployment of journalists and other employees as well as a host of other socialal ills associated with local news deserts including less competent local governments, greater spread of partisanship and misinformation, removal ofdo economic stimulus local economies and reduction in the opposing view points. mire h third, a targeted intervention similar to the negotiating frame work adopted in australia would solve the problemia and see mitigate soci harms by doing three things. first, it could permit a coalition of news publishers to form a joint negotiating entity, no news publisher would unilaterally shut down access to google and facebook, to do so would be suicidal, second, the

bill could put in good faith for access rightht gsz, third, if t good faith negotiation does not produce aragreement, the coalitn of news publishers but not broadcasters could invoke ash concentration rights. at that point, a panel of arbitrators wouldst decide usin baseball style arbitration who's estimate to the platform, was closest to are fair market valur accessing therp content in the absence of the power imbalance. now granting a narrow exemption to antitrustab laws to address underpayments to vulnerable input providers finds precedent in both the labor exemption and farm cooperative exemption to the pantitrust law and other countries such as australia who employed aor similar interventi to whatma i call for here have seen immediatepu rewards to publishers for their interventions. relativeve to australia's model what i'm calling for is more favorable to small publishers as it

would not permit any large individual news paper to unveil good faith, negotiation, or arbitration y rights. only news publishers that remain in the coalition would bey entitled to those rights. thank you and i look forward to answering your questions. quest. >> thank you very very much. and now our remaining witness who is appearing remotely is dan gainer, vice-president, free speech america and business research center. thank you for being with us mr. gainer. >> thank you. chair person klobuchar ranking member leeann members of the committee, thank you for the opportunity today to speak about one of my favorite topics. local journalism. i worked as an editor on three different local daily newspapers as well as editor of two weekly and editor and associate publisher at a third. the best and obviously the most fun jobshi i've had were local news if i could snap my fingers

and fix local news i would. i would hazard a a guess that every memberle of the committee would do the same. but the competition preservation act of 2021 toes not fix that problem. it's a well intentioned attempt to level the playing field between big tech and local journalism but that's not what it does. it seems petitions premised on a misinterpretation of hertz is that now local journalism was killed by big techs it was not how do i know i was there working local journalism as news all the outing in brought in 20, 25% 30% profits year after year and didn't. newspapers consolidated because delivery came difficult in rush hourth traffic and more readers turntd to tvv news. whereia i grew up went from thr dailies to less than one in a less a decked. i was director of new media for aa weekly chain as the wsh wab watched at nurse organizations downplayed the threat and posted

colten online. secular etic news outletsy unable to respond to the news outlets online. the great recession to the particular toll on local businesses meaning advertisers stopped advertising. restrictions were another example how the t heavy hand of government farmed local news. that's the background bringing us here to discuss the future f journalism. the jcpa allows big many companies to ignore anti-trust laws and work together. that isn't fixing the problem of a big tech advertising cabell it'sia adding another canal to negotiate with them allowing a fewe of the most mouvl media to act as proxies for only ensuring big firms secure deals and benefit them. we want journalism helping to inform the public and hold powerful people accountable. that's now corporate media handled local journalism in the past. local outletsts treated at cash cowsed big corporations milked d

slaughtered remains. this law would serve to support huge existing media and instead of definite media. cost corporateha oranges don't need our help. "the new york times" spent, sr. 50550 in cash purchasing the athletic. which according to one journalist covers 270 plus sports team andet 47 local markets. the times placed itself in direct competition with every local news site from the same pool of subscribers. the times had 8 million paid subscribers. and the. time limit bought the game wordle in the price low seven figures why are0 we helpig them? the washington area had a mcmahon of community week list 1959 grew to 550,000 and the circulation in suburban maryland. they were closed downed by their owners wsh "the washington post" in 20155 np in 2021 the post achieved record breaking digital

advertising. it's also owned by big deck tech billionaire jeff bezos purchasing the company in 2013 two years before it came up with the chain of week ilys. are we helping them corporate media benefit from social medi algorithms and smaller independent out pits. the more advantages makes it moreed powerful. thee jcpa treasured dangerously on areas left abest left alone. independent journalists still make news but they will be squeezed out by corporate media. lastly thise issue needs to be seen in context. there are a few terminals and bills floatingur around in this congress. there is a concerted effort to get government involved in the practice and funding of journalists and journalism. it is sunrealistic to expect journalist funded or supported by politicians to turn around and report aggressively on the same politicians. we can't expect journalists to hold powerful people accountable when they are accountable to

those powerful people for their paychecks. and that happensns at a time wh america's trust in media at epic low. according to gallup american's trust in media to report the news fully accurately and fairy has fall ton 36%. n for republicans that number stands atan 11%. why thenon are we bailing out corporate media when ordinary americans would rather find new sources of information? thank you and i look forward to your questions. >> thank you very much andnd thk you for appearingmo remotely. and i'll get started here. i'll start with you, ms. briteto. google is a search giant, about 90% of severanceis as we know ty havein 95% market on google. and also the largest company in thele online advertising space. something i know that my colleagues senator leesp is ver concerned about. forer small newspapers google takes a large percentage of the revenue generated on the newspaper site. how would you characterize your

negotiations with google over share of the advertising revenue it gets compared to what your newspapers can keep? >>my thank you for your questiop i guess the best way to answer that would be there have never been negotiations between my company and google about the mannerer in which we get paid o how much we get paid. in fact, i've often had my company penalized whenever i have had other advertising services available on trib live to helph fund our free website. we get punished in the algorithm. so if someone goes to search for trib live because we are using other companies that are not google ourur search results are pushed down. when we have reached out directly ton google for help to improve our search rankings, we have been sent to resellers of google products who charge us

anywhere between 12 and $15,000 a month, which iss a lot for ou company, to help us solve our problem. and the problem is always solved byem removing other advertising mechanism that exist on our site.ve so when i have attempted to find otherl ways to monetize our content independent of google i have hit wall after wall with google and in fact the resellers have been as brash as to say to me, look, i would take off these other platforms that you're using on your site. and when i explain that i actually get a higher dollar per click using those -- using thosm resellers they told me well google doesn't like that and google owns everything. >> okay. pretty direct. okay.om mr. oxidantsly in your written testimony you wrot that big tech companies like kwoogle adopted

anti-competitive terms of service and take it or leave it approach whichm leaves local broadcasters with a below-market sliver of the ad revenue derived through products. can you tell the committee what your experience has been negotiating with big tech companies like google? >> there is no negotiation. there is no conversation. there is no emails. there is no back and forth whatsoever. they don't really even give you thatu opportunity in any way shape or form. and believe me we tried every way possible with both of them. the bottom line is that they don't get back to you. and even worse they make changes whenever they feel leak it we often times over a weekend or overnight or in the middle of the afternoon n will all of a sudden have changes in terms of service just come down to us out of the blue. and we just have to deal with it.s there is not any kind of negotiation.su there is not any kind of conversation. >> okay. again, t direct. dr. singer, news aggregators.

apple news. take content from various publishers and give it to consumers and makes it very difficult for newspaper a publishers and other news sites to establish direct relations with theirbo own orders which cs into their ability to retain subscribers and improveai advertising operations. can you talk about the challenges faced by smaller mediaco outlets which find themselves in an uneven bargainingis positions with new aggregators? >> sure. there isba po a- the challenge of course is more acute for the smallerul publishers than the larger. because as a matterr of bargaining positions they have less counterveiling power. but i would say that the asymmetry of the power imway balance extends across the industry not just t smalls but large and media as well. the problem is they can not smumen the about the publishers can't summon to will to do what's necessary to extract fair market payment for access which is to shut down the access to

google or facebook from their site in no would additionally do than unilateral basis. the reason why is they are beholden on google and facebook for travb. 70% of the referrals come from thell two sites. what the bill would seek to do to attack this power asymmetry, bargaining asymmetry ishe first allow the newspapers and news publishers and broadcasters to bargain collectively vis-a-vis the dominant platform. so i think that to answer your question, yes they are facing -- one last question. you heard from i think it was mr. francis and my colleague over here with the use of the wordrd news cartel about what ts bill does. and of course there's been representative buck, conservative over b a in the ho senatort kennedy, not exactly

liberal. senator boseman has been added to the bill and there is a lot of interest in the bill. and i think it's really important as we look at the changes we're making to make clear that there is not going to bebe any kind of bias here. but thatt also could you addres this argument they've made that this creates some kind of news cartel? i'm only -- knowing the supporters of thiss bill in ters of the news organizations that run the gamut from liberal to very conservative, i find this impossible to see it that way. but could you comment about why this is not a news cartel? >> right, the concept of creating a cartel here is laughable and r uneconomic. let me w try to explain why. the newspapers and news publishersnd generally would no be getting coordination rights in dealing with consumers. would not. if they got together and tried to set prices for end users they would go to jail. the coordination rights that are being delivered here are

narrowly tailored to pertain to only the news publishers's dealing with the dominant platforms. they wouldn't have coordination rights with respect to workers thp wouldn't are wouldn't have coordination rights with respect tor buyers or customers. so the notion of a cartel being created is fanciful.kn i want to just make one other point too. i heard plt francis say that the it's going to result in higher prices. as you know the cartel is goin to exercise presumably semg power vis-a-vis consumers. that's false. but just think about what would happen ifha the news publishers got their wayav and got the bil passed andhe there was arbitratn hearing and award given in the billions of dollars the news publishers what would happen you've a a large lump sum payme on the revenue side. there is in theory in kpks or theory in pricings which i happen to deech at gorjt that suggests that a big large increase of a lump sum revenue would ever cause a firm to raise its prices to end users.

doesn't make any sense. as an economic matter. if someone in my class suggested as such they would fail. >> all right. don't worry, mr. francis when senator lee or another senator returns i myself will give you a chance h to respond. hold your beer. we have next up senator durbin. we o are thankful he is here as the chair of the judiciary committee, honored to have him here since he is notey a memberf the subcommittee and he is our chairman. we thank senator grassley the ranking member for his constant interest in this issueha and he. senator durbin. >> thankth you, madam chair i he to leave shortly andhe i appreciate your putting me in thero queue. i recently p read about the bro headed cow bird is a brood pair site meaning it lays eggs in the nests of other species. a female cow bird quietly severance for female birds of other species actively laying eggs. oncece t she found a suitable h the cow bird sneaks in the

resident ubird's necessary whe it'sex in which. damage one or more eggs and replace it with one of other men. the forest parents sounknowingly raise the young cow birds at the expense of their off spring. an anomg nalg to something we're talking about here. it appears news sources are createth information which is being used by others that they don't pay anyea money to create. but they advertising revenue comes their way when they steal the content and put it on their own tech boards and such. so i wonder here, is there a way to the deal with this? let me -- let me quote one of the friends of mine. dennis lyle, you may know denns president of the illinois broadcasters association. he he said to me the economic harm the tech giants are inflicting on local broadcast journalists around the country is brought out in this testimony. where advertising revenues for radio broadcasters that experienced a free fall in recent years. dueat to almost exclusively the

rampant expansion of dominant online platforms who have devoured advertising market shared in the digital marketplace and devised anti-competitive practices to protect it. so we're -- we're discussing the passage of jcpa to level the playing field. i'd like to ask mr. oxidantsly can you discuss how the proposal and negotiation framework with boost small illinoisen broadcasterers like those dennis lyle represents. > absolutely. papever -- and i appreciate the question. absolutely it would help us to have all kind of news operations to have at levelbe playing fie. i think that's all we're asking for is a seat at the table. we want to be able to negotiate, have a conversation. we want y to be able to jointly work together to try to have a -- an outcome t that will hel small journalistic outfits, including broadcasters but also including the newspaperwe industry. but in terms of broughting, we

desperately need this. because we're -- we're fading away. we're having fewer and fewer people involved in the news business. seen such a dramatic andw steep decline in people involved y in news that broadcasting now has seen tremendous amounts of people leave the industry. >> you know chicago. >> yesra i do. >> you've worked in chicago. >> yes. >> i can tellw you in my senate career of a little over 20 years there'ss been a dramatic change. a press t conference in chicago you're lucky to draw one reporter. lucky. instead a bank of a cameras andy uniont' rules or by tradition cameramen don't ask questions. so you make your statement. and they look at you and they look back atse them that's the d of thet story unless you you wat tots volunteer information and k yourself questions that's what it's come to in terms of what usede to be one of the most and nt news markets competitive news markets in america. it's just disintegrated. we now incidentally have a new experiment announced this week

where wbez, the npr station in chicago is joining up with the chicago sun times in a not for profit venture to deliver regular newspaper journalism radio journalism through npr. i wish them well. we need some competition. we need some people that are asking tough questions of politicians like myself. and it's just not the case. and if nothing is changed it's all goinghe to go away. and just going to disappear. >> and that is my big concern is that without something like the jcpail to help out these journalists we're not going tow bes able to comp council meetings, not able to cover press conferences, not able to cover local weather emergencies ors traffic. or, you know, all the things just are goingak away. what are you going to rely on then?ig your local list serve? and the way it's set up over the years is that to make if a go at it from thee digital business a i know jennifer could go into great detail about it's very

difficult. the profits aren't there. you're lucky if you break even. so something has to change in we want localal journalism to surve and thehe jcpa i believe can ge that started by having -- let us have a seat at the table so that we can at least even the playing field. >> if we don't do something the cow birds won't find any nests to raid. >> they will not. >> thank you very much. soo. >> mr. francis first i'd like let you respond to a point mr. singer made a moment ago. i was out in the hall i didn't hear allha of it. but b he described -- i think t word t was laughable, the point was making earlier this this bill would authorize s cartel behavior. do you want to respond to that? >> thank you. yeah. for sure. so i understood dr. eng isser to suggest two things beth of which were surprising to me.

and i think anybody sort of in the anti-trust enforcement space.y thing number one is the idea that a cartel is it only a cartel ifnt it deals with your dealings directly with consumers or workers that's not right and that would be news to thent department of justice. i think some of the flagship cartel enforcement actions have dealt with cartel agreements to harmonize on prices for sale to intermediate suppliers. i think the wire harness cartel. auto parts cartel lcd cartel. people went to prison for a long timeme for these things event though they didn't involve consumer dealings where workers it's a cartel piece of enforcement. >> his court costs $conclusion is based on a distinction is not one recognized by the anti-trust enforcers at the department of justice. >> certainly the department of justice in cartel enforcement, absolutely does notes distingui betweenn cartels for sales diret to consumers and cartels for to an intermediate seller

like aen platform. they are equally illegal. >> that won be a defense then. >>er that would absolutely not a defense. second -- i stund dr. singer to suggest that theou cartel overcharge here wouldn't increase prices. it is absolutely true for sure that the a one-off lump sum payment would not have any effect on downstream prices if what we are talking about is just cutting a check a one-time check to google and facebook, and then it's back to business as usual forever, that would not as such -- sorry from google and facebook that a alone is unlike to impact downstream costs. but i understand that what we're talking about as it is an agreement that would lead to a rolling payment from google and facebook onnd an ongoing basis r news related activity on search engines or social media. and i think it's a pretty elementary piece of textbook microeconomics that ific you ta a month op list and you increase

their costs and the profit maximizingu, price to the monthp list will increase. i understand that not a single one off lump sum payment to be what's contemplated here. >> thank you. p that's helpful. and just to be clear, getting back to the earlier point about the cartel it's not like anoff shoot ram fix of this. that's the point of bill. isn't that the primary of the bill to make that which is currently unlawful. >> that's exactly how i would i understand it. .. getting competitors together to agree on the prices and terms with which they'll deal with the trading partnermp that's a clasc cartel. >> thank you, mr. gainer, isn't the problem forge news publishe simply that their value as an advertising venue has been diluted by the advent of the internet and targeted digital advertising? >> well, it's been diluted even before the internet. you know, the congress passed newspaper preservation act in 1970 trying to stop b newspaper

from goingng out of business ba then. ended up with i think more than 2 dozen joint operating agreements back then. look, people live their lives online in much of the country righte now. and two years of covid restrictions have further encouraged that. but people aren't going to advertise -- they are going to stores. aren't going to restaurants. the restaurants and stores stos stopped buying ads. that affects everybody, the business that is we're talking about here. >> so i've got a chart up behind me. i don't know whether you can see it tp but digital advertising revenues have increased several fold while the areas where newspapers nowec face more competition. classified ads, and retail ads. have declined precipitously. how much of it is a big tech problem versus how much of it might be a matter of -- of business choices and how they interact with -- with emerging

technologies? >> i'd asay it's a mix of both. you look at those numbers here. we're all declining pl as i said in baltimore where i grew up had threee newspapers. and newss america died in 1986 before the internet. the evening sun shut down soon after the internet. that wasn'tfi caused by the internet. you know, so the problem also wasne news publishers, the biggt ones didn't reinvest for the future. and, you know, now we have seen that the ones that are really doing well are what are called verticals that are very specialized. "new york times," political vertical, “washington post”, the same, sports, other things lik that.. local news isn't doing as well because it's just not doing well across the board. >> thank you. mr. francis, to be clear, when we're a talking here about whats

it -- whats a the risk what's at stake what's w suffering? j we're not talking about the death of i journalism itself. we're not talking about the idea that journalism itself can't be economically viable in the absence of this. we're talking p more i think abt whether certain business models followed by some in the news publishing industry are viable. is that -- is that correct? is that consistent with your understanding. >> i think that's exactly right. i think localhe news is clear critical.oc i grew up in a very small english village where when the life magazine or the villager or the town cryer or local newspapers would land through ourth letter box, everybody in e house at some point that week would read it. and we would learn a bunch of things we i wouldn't find throu alternative channels. local ermedia, and news are critical. but exactly as you describe, what's at stake here is the

manner in which local news will survive. >> right. >> and it's very clear the business monthlile is responding to ketive pressuring. >> what that suggests is that some -- it's not journalism itself at stake but some business model, some businesses will fare are the than others in that environment. and so if we -- i have no idea -- i'm not a business an on i'm certainly not expert in the news publishing business. never purport to know the ins and outs of that business. but i think it's fair to assume that you a can identify a certa subset -- i don't know how big it is. a certain subset in the news publishing industry that hasoo adopted a business model that's not succeeding. it's not going to succeed. is it generally good policy from a --on the standpoint of promotg competition for the government to step in and sanction the formation ofos a cartel in orde to save a particular type of model that's dying?

>>he it's almost always not.ti and that is not to say that we look with anything other than horroror and sadness at the rea difficulties that competitive changer, brings. so particularly with a transition to digital business models, we'vean seen from one sector tos another legacy businesssu models experiencing real difficulty as they transition to something that makes economicex sense and is sustainable in the economy as it's s emerging today. >> horse and buggies to automobiles. >> ed wexactly, video rental st film and camera appear we see the story there is real suffering associated with that. but if you believe in anti-trust you have to believeow in the competitive process that anti-trust is there to guarantee. and withoutre tolerating and allowing some degree of failure, some degree of discomfort, even market exit sometimes, then you don't have a i ketive process. and then it's not clear what the

anti-trust project is for. so as -- ass>> difficult as it the pain in the way you describe are a necessary part of the competitive process. >> i like your comparison of the home video industry. the consumption of home video entertainment didn't die. netflix emerged long before it was an online streaming company. and -- and it survived. where blockbuster didn't. they had a different delivery mick t mechanism one worked tho didn't it wasn'tyo the industry that died. business monthly 340dles succeeded over others. mr. blumenthal. >> thank you very much, senator lee. thank you for being here today. there are moments in the united states senate i've found in my ten years here that america comes to one of our hearings, literally america comes before us. i and i think we have that moment

today. it is a moment for america about a failing industry that has been the life blood of america going back to the founding of our republic. and it is part of a genius of that we have local journalism which covers local stories and provides a local forum for people to be informed. one of the ironies here is that big techd is using information n effectth to dominate. and it's information that is collected in all kinds of ways thatff local journalism simply doesn't have the power to do. and then it is used in effect to suffocate other sources of information. namely local journalism newspapers, and now increasingly

broadcast. to all the sophisticated economic arguments that might be made against in act, i think ms. bertetto ine recounting what wa told to her, i think, by someone who was asked, google doesn't like it and google owns everything. that's the nature of the power here. and so i would -- i would like to say that the market will self-correct, that we can use existing anti-trust law. but it ain't working. itn isn't working for the hartford current. which was weakened and then taken over. and its fate is uncertain. it was taken over by a vulture hedge fund, baldwin capital, which has been seemingly selling

off its assets, taking advantage of its real estate, of other assets, in no way caring about seemingly itsor journalistic stf or even quality. anded they've cut staff in factt twice the rate of their competitors one the bright side. the connecticut mirror in connecticut has enabled vibrant democratic debate and discussion. but it is a non-profit. it depends on donations. it has discussed in recent times the importance of local elections and local reporters hold public officials, including myself accountable to the people that we serve. so, mr. singer, let me ask you and any of the other panelists that want to comment, i'm a

supporter of in measure. but i wonder, are we too late? can we still rescue american journalism? >> i don't think we're too late, senator. what we -- what this enforcement mechanism would do would provide for a payment to a collective or a coalition of newspapers or news publishers that would attemptke to approximate the fa market value of what they are contributing to the platforms in terms of users and clicks and the like. and so if we can -- if we can put money back into the pockets of the news publishers, i think wet can breathe life back into the industry. p and the money would eventually redound to the benefit of journalists and all the other workers and input providers that go into the production of news. >> ms. bertetto and mr.

oxidantsly same question to you. >> neyeah, i certainly want to respond to that. because i think what's at risk here is local news. that's what's really at risk. the huge news operations, yes, they will be justd fine. but when you talk about local news, local news is in a lot of trouble. whether it's broadcast or print. and i have experienced it even in watching the d.c. area, there is not a viable economic model that i have ever seen for local news to bear all digital.oo it just doesn't work. the money is not there. and so that's very distressing. and over time i think while -- are we too late? no, i don't think we're too late. but getting close. we might be in the 11th hour because it's getting there. this is getting very dire. and i look at it, you know, we're also a platform too. we're aggregators. and we're good with that. and we understand that. and we're a platform that pays

for the news content. i don't think the associated press would like it very much if all of a sudden we didn't fay for their content. and in many respects i think that's what'sf happening here i you know the facebooks and googles get all the advantage but don't have to pay for any of content. andst to me that's just not fai. and it's the downfall of putting out localnd news you're not abl to find a revenue model. >> ms. bertetto. >> you know, iat can't sit here and pretend that as an industry we have done t everything correctly. you know, there are certainly things that over time we have made fmissteps. but -- and i feel like the jcpa is one aspect of what needs to happen for our business models to be corrected in the future. but it is one piece. and there is responsibility on each of us as publishers to work on other solutions that make our business successful.

so our company, for example, you know,or we have gone to great lengths o to diversify our revee streams. and i think it's creative solutions like thatpa that wille necessary from all of us. jcpa won't fix all of our problems, but it will fix one ever them. >> thank you. my time is expired. this topic is urgent in my view because i agree that we are in the 11th hour, maybe even toward the endnd of the 11th hour, because once these executions are gone they are gone. there is no reconstructing them, at least with the quality of excellence that we have seen over so many years. inin exposing corruption, and enabling information about school boards, and holding accountable public officials. so importantly at the local level. because it isiser irreplaceable

indispensable thank you. >> thank you very much senator blumenthal. i think senator blackburn who was here diligently early. is remotely and then i think senator pad i willa should be fine for voting. okay. senator blackburn. >> thank you adam chairman. and thank you all. what an interesting panel. and i really appreciate the testimony that youou got to us d that you came to give today. mr. gainer, i think i want to start with you. because your organization has really put a lot of attention -- a lot of attention on bias. and the mainstream media and how bigg news and big tech team up andne filter the news. and really take control of what you hear andss what you see whe it comes to news. so when i go to tennessee i hear a lot about this, from tennesseans, and they don't like

it. they feel thatt their views are not being represented. and that they're very concerned about if they can or cannot trust mainstream media. so we thank you for the work that you're doing on this front. but i'd like for you to touch on what small news outlets are doing that will help to combat thech bias. what you all are seeing that they are doing. i think it's important that they do that, so if you will just very quickly touch on part of the bestt place efforts for combatting this bias from the coziness of big tech and big news. >> well, first of all thank you very much, senator. we've seen examples all through even recent presidential election of the problems of big tech andpo then followed up by g journalism not covering major issues. and it's the to note the differ

between corporate media, which what -- you're talking about there. and several people on t the pan right now. local journalism is something i think we all love. and, you know, the heart of a community. but on national level, yes with, there is winkrbl bias from the traditional media, the legacy media, and working hand in hand with the same people that i think we all want to beat up on right now withea google and facebook and others. and soso the -- the scary idea here of creating you know a cartel or whatever you want to calle it, some sort of organiz unit s where the major players d in journalism, "the washington post"en a "new york times," who didn't stand up during the hunter biden story and cover that story while -- while "the new york post" was being censored that they are going to stand up. and represent. >> okay, let me jump in there.

because, see, it is -- what we want to do is make certain that local news -- that you're going to give localal news what they need to be competitive. that you're not going to cut them off. i think everyone wouldld agree with that. but what we don't want to do is do something that is going to have the -- the unintended consequence of the reverse effect,ke to that. so, mr. francis, let me come to you, do you think thatit compans like facebook, like instagram, youtube, would stand to benefit from an anti-trust exemplars? and what bad behaviors could they get away with if they did get that exemption? >> so, my understanding, senator, is that this proposed exemption would workk the other way around. so in the event that this were created, two things would

happen. so the first is that the most immediateme beneficiaries woulde the participating media companies, obviously including some very large conglomerates as well as theee small are publishs that we're talking about. and certainly the cartel overcharge that would emerge from agreements onrm prices wou be paid in the first instance by goingle, facebook and then transmitted most likely in the form ofds higher prices for advertising down the chain to consumers. >>g okay. soso basically what you see is more hands in the pot for the money that is there, adding extra layers of fees, so in the end you're going to have the -- the originator of the content gets no more. but you're going to have the conglomerate reaping more profit off of that content. am i following what you're

saying there. >> that's exactly correct. there would be a new monopoly charge at the top. >> yes. let me ask you this. thee music industry. when it comes to royalties and someme really tricky royalty issues, whatt we have done through the years is look at how they operate under consent decrees. en a a few years ago we had to work diligentlyy creating the music modernization act. it was something very important to a lot of my tennessee constituents.. so do you see something like the music consent decrees being needed if congress grants an anti-trust exemption? >> so, my sense is ---en a i am not an expert -- it's been many years since i worked on music licensing and the process under the consent decrees that you mention. but i'll say a couple w of thin. so thinge number one, i think that has been an i extremely

complicated, difficult and controversial process for a very long time in a way that i think bols exemplify some of the difficulties if we wereio to embark on a similar price setting mechanism, for example with a a compulsory arbitration mechanism. and thing number two, all the -- or many of the music licensing examples are distinctively situated becausese there is a compulsory licensing obligation. in other words, the licenser has ha statutory obligation to issue the license. and obviously that has all kinds of complicated effects for how you want to set up your system. i don't think anybody is talking about creating a statutory obligation here on news publishers to issue aom license. but i am really not an expert on music licensing in particular. so everything that i say about it should bebe taken with some caution. >>ll i appreciate your candor. thank you all. thank you,nk madam chairman. >> okay, very good. thank you. senatort' padilla. >> i want to thank all the

witnesses for year testimony on this very important topic.n it is not an understatement to say that our democracy depends on the healthy and vibrant information ecosystem. and it's required for example that all of our communities can readily access online news via a high-speed internet connection. reliable internet connection. that people arere equipped with information and media literacy skillsin responsive to today's complex content streams. that -- that they're serve by a thriving free press. that includes media outlets, journal ivrts and broadcasters that both reflect and are responsive to the diversity of our t nation. economic recessions and a loss of advertising revenue has devastated thehe news industry. in thend last 20 years more thaa quarter of the country's up ins have disappeared. local, regional, community and

independent media are understaffed, under-resourced, and in need of assistance as they work to identify new sustainable businessoo models. it'ssi critical that congress explore how we can assist the news industry as it tries to find itt footing during in transitions period. bertetto, i know from personal experience that locale news is so vital to keeping communities in california informed, particularly during elections, for example, or an and after natural disasters. you touched on it in theub openg statement. but can you discuss if local and community-facing news outlets disappear, particularly when it comes to our democracy or public safety. >> of course. so. of course. so our radmann readers being a publish they are

southwestern pennsylvania rely on usse for the information the are literalal lir not going to t anywhere else. so that is covering school board meetings,m covering city government. letting them know when the bridge is out in their community. that is letting them know when the senior citizen center is going to be open during the cold winter months as heating stations. we often provide that very content as well to the television broadcasters. so often they're relying on us to inform them so they can spread the message through their channels. obviously as newspaper staffs continu to dwindle, what will become very problematic is there will be no one, you know -- "the "the new post" and york times" will probably be fine no matter what is decided. but new kensington, pen opinion, won't be.e. who is going to report on new

kensington, pa if my company isn't doing that? howal are we going to have an informed electorate? how areot we going to have a society thatre understands whats happening in local government, state government and national government if my company is not resources.hem those >> thank you, those are great examples. appreciate that. not every bridge failure makes national cable news. >> exactly. >> good only knows how contentiousac school board meetings are in this day and age. given the importance of local newsrooms to our democracy. i'm concerned that newsroom employment in the united states has dropped t by 26% since 2008. miss bertetto you stated that the jcpa would help small publisherser make additional investments into the community and hire more reporters. apl question for both miss miss

beretto and t mr. oxidantsly ca you discussion the importance of kaio ties benefits from the bill to job retention and creation? >> presently in our company, about $7 million is paid out in salaries to journalists on staff. to i give you some sense of wha we earn presently from google, it is el$144,000 a year. so i really feel i'm starting at zero. and any additional monies that couldec come in could certainly help to keep -- first keep reporters on so we can stop the decline. because it's -- t it's astronomical the number of reporting positions i'm seeing leave our market. i also think that with -- when you're looking at 144,000 dars

and say i can get 6 hup thousand, just for example, i could cover more community. i could add beats. i'm presently making decisions every singleve za about which communities we can afford to have a reporter in on a full-time basis. and where we have to decide to have a prosecutor other or no reporter ater all. any>> additional economic relie to help me avoid those decisions be welcome.nly >> mr. ochsly. >> our newsroom costs about $12 million to run everyry year. and what we're finding is more and more0 has to be switched to the digitalal side. even though the digital side doesn't make us money. at bestt over the years we've broken even. in the lastt ten years our digital overalle revenues off r website have barely moved. andvi at a costs going up a lot.

if we were able to have money come inn i think the jcpa could provide that by having a level playing field, a seat at the table weo would be investing in reporters. the thing i get all the time from all the h people on the content side and programming can i add people? and of course we would like to addd. people. also, our area has grown exponentially. itli wasn't that long ago that the whole area in washington, d.c. was 3 million people now it's 6 million people. yet our newsroom hasn't been able to grow in size because w haven't been able to really change in terms of growing our people. but the very first thing we would do would be to add more journalists.d one other thing i said say about the journalists is that professional journalists -- that's a huge point baithere. these aren'toi people who are doing click bait. they're people researching stories, they've been educated to do that. they know what they're i doing. they make sure to get it right. we have a saying at our operation, before you get it first, first get it right.

and that means getting good sources. that means verifying. that means doubling, triples, quadruplingus efforts to make se you got it right before you put it out. and people get the facts and that's what peoplen need in locl news. >> i'm sure in i closing ind kn what the conversation is also gone in the direction of what else the industry is doing to find solutions, short-term and longerhe term during this transition period. and i'dews invite the ongoing conversation of what else congress can. be doing both in the short-term and the longer term to help the news industry. thank you very much. >> okay. so thank you very much, senator padilla. i think it'sut down to just senator leeann myself here. and i'm going to have to leave at about 5 to 5:00. and i'm going to let him maybe do five minutes or so. i have two more questions. and we can go from there. >> thank you.

mr. gainer, let's go back to you if that's all right. how -- how do you believe consumer trust or distrust of news publishers might impact theirrt success? ie ask because the edelman trus boormt, as displayed in the me, shows a growing mistrust of the media across the globe. edelman reported as this year t 46% of people around the world view government and media as divisive forces in society. and d 74% of americans worry abt fake news. howsh -- how do you think political bias or, you know, including anti-conservative censorship might have contributed to thathe mistrust. >> i think it contributes to it a lot. both onn the -- you know, the bg tech side and on the media side.

and, again, that's -- you're talking about large media outlets, corporate media, it's not a slam on local news but when peopleei -- when ordinary americans thinkki about media ty generally are notot thinking abt their local news outlet. the weekly newspaper, the radio station. they are thinking aboutme large media. they think about media they see on tv. t and then they're also thinking about the problems of big tech. i mean, this committee or other ront go to war with big tech conservatives would be very happy aboutrs that. but the question is does this bill work? and to do that. and when you look at the years of you know gradual decline of people's interest in media, and also look at people's -- the rising tide of people distrusting media, the two track t similarly. >> that makes -- that makes some intuitive sense.

and i -- there seems to be anecdotal support for that, at least intuitively it makes sense to me. now the congressional research services n noted that 70% of day newspapersrs are owned by priva equity firms, hedge funds or other investment groups. nothing wrong with the business models. but those are the data that i've got. now, do you think these owners are necessarily going to be more concerned about investing in journalistss and quality journalism than they are about getting a return on investment? and regardless, would -- would the jcpa make a difference in that regard? is the jcpa going to change the

incentives in place for the owners of the businesses one way or another. >> well it certainly doesn't seem like it. i mean you look at just "the washington post" for example, the post -- its identity is as a national newspaper. when it a owned a cane of weekls very popular in t suburbia, it shuthe them down. the tribune owned the baltimore sun they had a chain of weeklies they gutted to the point where they are largely non-existent now. that's --ef that'sle been ongoi problem. the -- you know, not o necessary the local ownership. you know, local ownership which i think is reflected on the panel local ownership tends to dare about the local community. but when it's national ownership you were saying 70%, then they're not necessarily loyal to their -- to their readers and their viewers. >>pt mr. oxley, while i'm never going to support legislation thathi i believe attempts to

improve competition by forming a cartel, asca this one does, if e purpose of something like the jcpa isnd to protect small and independent local publishers why not at least limit the bill's scope why not limit its application to small and independent local publishers? >> well, i don't know the ins and outs of that as well as an awful lot of people in this room. and i haven't been ables to loo at the ins and outs of this -- the bill and how it works. >> are you a saying that you wod support it if n it was so limit? >> well, i would certainly support anythingg that would hep local news. i feel at this point that we're in a really, really tough spot news that's what we're talking about here. we're not talking about the national news players. local news players ares still some of the most trusted in america. you know, o strd after study shs that your local news people are trusted.hi and that there is actually a

very favorable view of them. you know, the national is a different story. but locally -- and we needse, something to help out truly help oute' the local news providers. >> so then -- but if that's the case, if we are going to make it as most of this discussion today has been,um if we are going to make it about the local folks, thenen why not limit it to them? dr. francis, i assume you'd agree,ar if -- with the suggestn that if -- if you buy into the notion that creating a cartel or a type of cartel permission slip is acceptable, for one universe, youu could reduce the harm inflicted by that universe where cartelsll are authorized by reducing then' scope. and in this case since most of the discussion i has focused around small, independent local publishers, couldn'tli that hav

that effect. >> i think that's exactly right, senator. so as you've heard. i haveve pretty strong feelings about cartels. i don't object in principle anything likeri so much to the idea off supporting local, publishers.ews at a minimum, restricting the scope of what you are describing, sorry strict restricting in the way you describe the scope of the exemption so that it's truly targeted at small,l, struggling publishers, that means we can avoid conferring the ability to you know add a cartel overcharge to large, very profitable media companies.e that would really help. i am pretty uncomfortable at thisit moment in our sort of political life about taking a big bite out of anti-trust when we should berg reinforcing. so i would love to be talking about other ways to support local news. but a any support mechanism shod be targeted to those who really need it not to the most prominent publishers.

>> is there a risk that by focusing on this particular issue it might draw attention away from other things, other things that also need to be addressed, including the -- the problematic we've got with google and facebook? >> i think digital monopoly and monopoly in general is a problem that at the minute vastly overmatches the ability of our anti-trust agencies. i would love to see moresi fundn and more resources. i think that's the most urgent need we have reas, you know, a competition policy community in this's country, even more urgen than anti-trust levrm is money and personnel for the agencies. and that's where i would love the focus of theav conversationo be. that's what i think isco top o the wishr. list. >> thank you. >> thank you very much, senator lee. and thank you for --you aim sur you have other questions for the record sona thank you. and mr. francis that's something where we agree on the funding for the f agencies. as you probably know senator grassley and i have a bill that passed the senate actually to

change a merger fees, actually make it easier for small are mergers andir harder for bigger ones maybe not harder but just a little more expensive to help pay for the agencies to be able to do their reviews as well as some other funding mechanism that we're working on. a few things, i'm just going to ask a adr few questions here at end. and be brief here, dr. sing are after now i will go work on the electoral count act. dr. singer in your opinion should news resisting ohs have a right to bebe compensated when digital platforms take in proft from detailed snippets. i think it's more than snippets of the copyrighted content? this is the -- they are claiming it's fairhe use. and i'do like your response. >> right. yes, they should becl compensat for any valuera that is being conferred from the i newspaperso thee platforms. including when o the platforms scrape and index and use rich

text and images to decrease the likelihood of a user actually clicking on the link. i'd like if i could to address the cartel pricing increase that mr. francis keeps saying which doesn't make as an economic matter. he did admit i think it's most important admission today, that there was a one-time lump sum transfer from the platforms to the i newspapers as a coalition there would be no price increase by the newspapers. i think hee did admit that. that'ser the most important admission that we heard today. now what he said next which was uneconomic again was that if it were to occur every five years then there wouldpr be a price inside of some sort. i can't follow what the economic logic is. and i start -- maybe he is talkingtors about a price incre by the platforms. but i want to rebut that as well. because the platforms as youro know, senator, has used a free price, zero price model to consumers. the notion that thee platforms having to writ a check of say so 5 billion every year for the payment of access is going to induce themm to suddenly abando

their free model and start charging consumers access for search or charging consumers access to the facebook social platform is uneconomic. i just -- i can't -- i can't say it any nice are than that. but there will be nothat. but there will be no cartel price effect from this lump sum transfer.ns you can take my word for it. >> okay. thank you. dr.e singer, just some quick questionsns about some of the concerns that we heard. and of course ins mentioned we e making revisions with the house to the bill. are the changes we should consider to ensure that small and local newsd organizations benefit from jointn negotiation and can exert an appropriate level of control over the process? >> ioyes. in, understand there are certai provisions in w the bill that would protect small publishers. the most important that comes to mind is the non-discrimination provision. ahe smaller newspaper that want to apply toio become a member o

the coalition could not be ib discriminated against based on its size orr viewpoint. that's very important. they could get access to the bargaining coalition. the c second thing, there are voting rights, one member, one vote. it is important to remember that smaller members of the coalition must be protected, their interests must be protected tht way. >> should we also consider changes to prevent discrimination, raised by some of my colleagues, in the joint negotiation process against news outlets carrying content that express different or even up popularr views, whether they ar from the left or the right? and i note that we have support for thiss bill. some off my colleagues have noted, from news organizations that they consider left. and then we have support -- a letter in support of the washington.. examiner, washingt times, daily caller. not exactly a bastion of liberal organizations. could you respond to that, if there is some provision we could put in to ensure there is no bias. >> the provision again is the

non-discrimination provision. any coalition of newspapers that forms would not be able to exclude a memberla based on the viewpoints, plain andbi simple. >> okay. and if joint negotiations with the dominant platform stall, should congress consider providing for binding arbitration to resolve the impasse. >> yes, it is possible for googley or facebook to check al the boxes and abide by the good faith negotiation during the negotiation period. it is very important toe look downrm the road and see if theyo that they are going to be faced with f binding arbitration agai at which point a panel would make a determination as to whose estimation of the fairest market value most closely translated the value being conferred by the newsws publishers onto the platform. >> that's one proposal, thank you,s, as we finish up this bil. i also would like to enter a set of more than three dozen letters

from newspapers, news organizations into the record. those a letters focus on the ste of competition in journalism and the need forav solutions like t journalism competition preservation act, which is bipartisanan both this the sena and the house. wero also have a letter from le enterprises, no relation, discussing the challenges the industry faces from those who would exploit it for storm profit opportunitiese. as well a feww other. i would pull those in the record. want to thank you all for being here. local news is a foundational importance to our democracy. i want to thank our witnesses today for their testimony. so many senators from differento parties, different views, as you can see, came together today. that's part of the exercise of free speech and part of being a senator and senator lee and i truly enjoy doing these hearings and really appreciate .it.n i want to get something done here.

that is my gehl. -- my goal, and we want to make it work for the country. the record will remain open for one week, until february 9th. thank you. do you want to add thing senator lee? okay. thank you very much to all of you. i am going to run to this other thing. thank you. >> good hearing. thanks. >> okay. thanks.

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