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Free At Last: Inside the Legals Victory in Ohio

In Competition, Legal Advertising, Uncategorized on August 3, 2011 at 6:18 pm

Years of persistence — what some have called blind optimism and others, insanity — paid off when Ohio Governor John Kasich signed the biennial Budget into law on June 30, 2011. Contained in the 3,264 page document were 420 pages of provisions that bring the legal advertising process into the 21st Century. It is a model of comprehensive compromise in both policy and politics, so much so that the key stakeholders locked in perennial antagonism all declared victory at the end of the day.

Local Government cheered the very real cost savings on otherwise unfunded mandates. The pay-to-read press heralded the preservation of legal advertising in print, which was not entirely a given this time around — and their enthusiasm spilled into an historical whitewash of relentless opposition great and small.

And for the free community paper industry: We’re finally legal in Ohio.

All of which is best for the people — as better informed citizens and as taxpayers footing the bill. But this legislated outcome didn’t happen by itself. It didn’t happen overnight or with a Hail Mary as time ran out. Nor because any major stakeholder suddenly abandoned self-interst for altruism. Columbus Messenger publisher, Phil Daubel, began his personal crusade over twenty years ago with some very near misses along the way. Guess which influential lobby always managed to pull the plug?

From our rise as an industry generations ago, free community papers have fought for the right to publish legal advertising. For at least the last decade and a half, measures have been introduced across state legislatures that would take that public notice out of print and place it all online. During this latter span of time, both alternatives to subscription newspapers made advances at the margins of select types of official notice. But neither vision became the model of wholesale reform of any state’s legal advertising regime since our industry’s victory in Minnesota last century.

What I call the Buckeye Compromise embraces both the realities of the digital age — and the time-tested power of papers without paywalls. Progress was methodically paved over the last half-decade through the legal establishment of a Task Force charged with making change, constructively engaging that commission, having hands in the direct process turning an eight page report into nearly five hundred pages of legislative sausage, and advocating the ultimate provisions as bills and amendments. That is the essence of the long, slow process where all parties were held to their bottom-line gives and takes. Which is not to say that even the agreed-to framework wasn’t subject to backpedalling and covert obstruction.

The publicly endorsed nuts and bolts — legalizing free community papers with audited circulations, capping rates at lowest earned commercial, allowing for internet posting in lieu of second paper for same notice and for summarized descriptions on second consecutive print publication — cemented the fallback position, a mousetrap of sorts. Our peers with the monopoly, and the license to print money, still hoped to stall any movement. While our friends — and soon to be advertisers — would have much preferred doing away with print altogether. That was basically Governor Kasich’s original proposal, and that worst-case scenario feeling quite real drove home, finally, the wisdom of expanding print to save it.

I don’t have enough fingers and toes to count the number of prominent free community paper veterans that have told me these last few years that our Legals ambitions were doomed to the internet. But I, along with enough equally stubborn folks, continued to believe that we could finally achieve reform because of the internet. Ohio can and should become the first state domino in this still-new century. To do so we must leverage the larger fear of the incumbent monopoly — total migration to the internet — and continue working with Local Government to quantify the very real savings we will bring. This won’t change the underlying competing ambitions — to stall just one more legislative session and otherwise to push web-only or bust — but having our fallback option on the table at the beginning increases the odds should process approach endgame. As we now see in Ohio, not only can this be done but all sides can even feel like they won when the dust finally settles.

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Stop Congress from Undermining the Open, Nondiscriminatory Internet!

In Competition, Do-Not-Deliver, FCC, FTC & DOJ, Network Neutrality, Rules&Regs, Uncategorized on March 18, 2011 at 6:27 pm

Take Action to Oppose H.J. Res. 37!

Some Members of the House and Senate want to override the modest safeguards finally put in place by the Federal Communications Commission. If successful, their action would say to the handful of major Broadband Internet Service Providers that actually handle the flow of traffic: “The Web is YOURS — Carve it up as you please!” Measures that would amount to a “Congressional Veto” of the FCC, small business and the general public have been introduced on both sides of Capitol Hill. The knee-jerk legislation, H.J. Res. 37 and companion S.J. Res. 6, aim to shred several years worth of diligent policy process at the expert agency and replace it with…nothing. A gaping black hole of uncertainty for every other line of business that is not a monopoly or duopoly ISP.

Members pushing for “Congressional Veto” willfully ignore the exhaustive record in the inclusive, open proceedings at the FCC. But what is worse, from an economic and job creation standpoint anyway, is the blind eye to the current market realities. We noted the lack of broadband competition in nearly all markets in our last post on topic. Here’s another way to look at the sheer market force of the handful of incumbent providers — those who would now be told that our collective internet is really their proprietary internet. While all the rest of us who are dependent on the network are scolded to just click our heels and say competition three times fast, and all evils will just cure themselves.

Even a quick peek through the lens of Moore’s law shows us how the idea of competition gives way to alternate reality in anticompetitive markets. Moore’s law anticipated the technological breakthroughs behind the wonders of computer chip-making. The innovations predicted by Moore, and the numerous corollaries beyond transistors including pixels per dollar, have brought us faster and cheaper computers, cameras, smart phones, tablets and the like. All smaller and more powerful — and cheaper — by the day. Consider the descending arc of the consumer’s cost of a Gigabyte of storage: 1981 = $300,000; ’87 = $50K; ’90 = $10K; ’94 = $1,000; ’97 = $100; ’00 = $10; ’04 = $1…and by 2010 we’re down to tens cents. All thanks to the driving forces of innovation and robust competition.

Now look at your latest Broadband Bill. Compare it to last year and the year before that. The price tag might suggest that the costs of digital data transmission are somehow immune to the otherwise ubiquitous phenomenon predicted by Moore and his innovative peers. But they absolutely are not. Accurate parallels apply to network capacity including Butter’s Law of Photonics — and today the actual bandwidth cost has fallen to an industry average of between 2 and 5 pennies per gigabite. Innovation combined with widespread adoption, has driven down the average cost of digital data transmission to the major incumbent ISPs to a mere $1 per month per customer. That fact that we’re still charged an average between $20 and 50.00 per month for broadband service is proof positive of an anticompetitive market.

But Congress wants to do more than simply ignore the reality that our nation’s wireline broadband markets are so concentrated that they can defy Moore’s law and keep all the savings away from consumers. In pushing this “Congressional Veto” of the FCC — and the rest of America exposed to monopoly or duopoly broadband provider conditions — they are actually signaling to the major ISPs with outsized market power and national footprints to go ahead with plans to set up new traffic-tampering toll booths if the markets will allow. And obviously, a broken market that allows charging up to $50 for something that costs as low as $1 to provide will also “allow” a new profit center built on gatekeeping.

Take Action to Oppose H.J. Res. 37!

The Free Community Paper Industry strongly oppose this “Congressional Veto” of the Federal Communications Commission’s modest safeguards to preserve an Open, Nondiscriminatory Internet. Contrary to some misleading talking points, the FCC’s well-reasoned framework simply establishes Transparency and prohibits Blocking and Unreasonable Discrimination against lawful network traffic. The FCC would have Broadband Internet Access Service Providers clearly disclose to consumers what exactly they are paying for and getting, while guarding against involuntary censorship of their customers’ digital communications. Instead, H.J. Res. 37 would obliterate these most basic rules of the road, scrapping the very conditions which have finally enshrined the longstanding policy and practice that allowed the internet to flourish. This “Congressional Veto” would give the green light to ISPs to launch into the gatekeeping business, and create new profit centers built on censorship and traffic toll booths. In essence, this bill says that after collecting payment for hosting as well as for wholesale and retail connectivity, the limited group of monopoly and duopoly providers can now create a new piggy bank to fill by dictating consumer experience and extorting new access taxes from all content creators including our hometown publishers, or otherwise block content in favor of their own.

The public is clearly on the side of the FCC, and overwhelmingly opposed to this Congressional effort to undermine sound communications policy. For those just entering this important policy debate, please read the latest opinion survey released by CFA and CU, the publishers of unbiased Consumer Reports. Perhaps even more instructive than the data detailing broad public support for Open Internet are the survey questions themselves. Answer them for yourself, as these are the actual network management practices at issue. Doing so, you might note the radical disconnect between real policy substance and distractive talking points on topic. With this understanding of the underlying principles of Open, Nondiscriminatory Internet, you will likely appreciate why this debate has historically been nonpartisan. A broad consensus of consumer and social policy interest groups across the political divide agree on the need to prohibit traffic tampering and corporate censorship. One particularly passionate essay on point was Christian Coalition of America’s “Net Neutrality is Not Some Marxist Plot,” debunking propaganda parroted by pundits on this action issue for them rooted in protecting free speech. Similarly, there is simply no credible reading of the actual FCC safeguards that could confuse network transparency and nondiscriminatory treatment of traffic with a “fairness doctrine of the internet” by any reasonable stretch of the imagination.

Our Industry joins with the broad consensus of job creators that support the FCC policy to preserve our vibrant, interconnected networks. The solid economic case against this “Congressional Veto” has been made universally by innovators, investors and a broad range of job creators operating on the so-called edge of the network. Our collective economic output is orders of magnitude above the solo enterprise of data transmission, and our capacity for innovation is as vast as our lines of business are diverse. Our continued growth and the emergence of new business models are critically dependent on the fair competition fueled by open, nondiscriminatory networks. The “Repeal” offered in H.J. Res. 37 implicitly contemplates a new anticompetitive vision of digital-era commerce, where the game is suddenly changed at halftime. It decides who gets to be the home team, and allows them to make their own new rules while telling the referees to leave the stadium. It’s worth noting that even competitive rivals to the national ISP giants support the FCC’s safeguards for fair competition.

This “Congressional Veto” comes as longstanding policy and practice have been recently undermined by the Courts and demonstrably threatened by implementation of powerful new traffic tampering technologies including Deep Packet Inspection (DPI). It proposes to remove enforceable Open Internet protections in the face of explicit internet carve-up schemes such as the public proposal floated jointly by Google and Verizon, and those buried in the comments of monopoly and duopoly broadband providers filed with the FCC in their exhaustive review. H.J. Res. 37 ignores the record established by the expert agency, and with negligible diligence of its own, torpedos a years-long open and transparent process of consultation, meetings, hearings and countless reams of substantive comments from all stakeholders including our Industry. If Congress moves forward with this ill-conceived and reactionary measure, the participatory internet as we’ve collectively grown it could devolve from a robust information superhighway into a potholed patchwork of fast and slow lanes and new toll booths. Free speech, fair competition, commerce, investment and job creation are all placed in jeopardy by this and similar Congressional proposals to demolish the FCC’s light-touch approach to preserving an Open Internet.


Community Paper Case to Repeal the 1099 Paperwork Tsunami

In Competition, Healthcare Reform, Rules&Regs, Testimony, Uncategorized on March 18, 2011 at 12:11 pm

For countless months, we have joined with our peers across the small business community in calling for full repeal of the new 1099 reporting provisions. We have made our case to the House and Senate, and gradually they began to listen.

Sort of.

Currently all sides say they want to repeal this job-killing paperwork nightmare. Several bipartisan votes have demonstrated that. Competing legislation has now moved from the Senate to the House and the House to the Senate…and even more repeal language has been attached and will soon be offered to larger pieces of unrelated legislation. Great, freestanding and pin-the-tail-on-the-donkey are both ways to get the job done.

But the Lingering Problem: Repeal is still not legally complete! Please Click Here on Our Industry Action Page to let your House and Senate Members know that you appreciate their efforts so far — BUT it’s now time to Finally Repeal the 1099 Paperwork once and for all!

The Free Community Paper Case for Repeal the 1099 Paperwork Tsunami has been made to Congress from the unique perspective of our industry — as well as part of a much broader coalition of small business groups. For the most comprehensive analysis of the impact to Our Industry, read excerpts of our formal Comments to IRS and Treasury as follow:

 

THE FREE COMMUNITY PAPER INDUSTRY

RE:  Notice 2010–51

Information Reporting Under the Amendments to Section 6041 for Payments to Corporations and Payments of Gross Proceeds and With Respect to Property


The Association of Free Community Papers (AFCP) and Mid-Atlantic Community Papers Association (MACPA) submit these comments to the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) on behalf of the united Free Community Paper Industry (Community Papers)1 in response to Notice 2010-51, regarding guidance concerning new requirements with respect to the reporting of payments made in the course of the payor’s trade or business.  Specifically, the Treasury and the IRS have asked for comments regarding the implementation of the expanded information reporting requirements included in the Patient Protection and Affordable Care Act of 2010, Pub.L.No. 111-148, 124 Stat. 119 (PPACA).

Community Papers are concerned about the increased complexity and cost this new requirement will place on small business generally, and on our hometown publishers and their community advertisers specifically.  The potential reach of the new reporting requirement is vast, requiring small businesses to report almost every business-to-business transaction including commerce-driving advertising services.

It is our understanding that the goal of this exponential expansion of reporting requirements is to increase the aggregate amount of income believed to be currently underreported by some in the business community, and thereby bolster collection of the sum total tax revenue believed to be owed.  Even in theory, it is generally understood that these new burdens will fall on already compliant small business taxpayers.  As a matter of practice, there are concerns even within Treasury and IRS that a tsunami of new 1099s will not provide any practicable new information, or whether this tidal wave of data can even be purposefully integrated into current data analysis systems.

Community Papers appreciate the fact that Treasury and the IRS have requested ways to minimize the expanded burdens on our small business communities. We note that attention has been given to, and comment sought on, specific concerns including duplicative reporting, disproportionate burdens among types of taxpayers and businesses associated with implementation and compliance, as well as the privacy concerns arising from the new, widespread wave of soliciting taxpayer identification numbers (TINs).

It is our strong and considered belief that these new reporting requirements will wreak havoc beyond even that currently contemplated, with a net return to Treasury and IRS far less than hopefully projected. Plainly stated, this costly scheme will do far more harm than good, and we will continue working with small business peers across industries united for full repeal measures before Congress. Here, however, we plead for the specific remedy of exempting advertising expenses from 1099 reporting at the new $600 threshold.

Community Papers offer five (5) concrete reasons why advertising — a commerce-driving, routine business operating expense — should be exempt from the duplicative 1099 reporting and the requisite and potentially hazardous TIN swapping triggered by $600 of services rendered over the course of the year:

• First, in practical terms with tax revenue objectives in focus, 1099 reporting on advertising will not provide any bottom-line information about any unreported revenues from client advertisers. The avalanche of requests for TINs, and subsequent cross-filings of 1099s will not reveal whether or not our advertisers are underreporting the income generated by their own, respective businesses. The overriding goal of making sure — or finding out whether — the plumber, the pizzeria or the seasonal lawn mowing and snow plowing service is reporting all of their income and paying their taxes will not be advanced one penny by this futile enterprise.

• Second, advertising expenses are not even remotely likely to involve any real compliance difficulties. These are tracked by front-end systems, generating a trail of payment and receipts, and presumably our clients already claiming advertising as a deduction.

• Third, a $600 threshold, or any other nominal and arbitrary baseline, could lead to the consolidation of advertising with fewer, larger firms — or even a reduction in advertising by small business altogether. Advertising generates a proven multiplier effect on economies, and since each ad dollar lost compounds to a net economic loss of 4 to 10 times or more, this would be a disaster for small business generally, our hometown publishers particularly — and quite possibly a net loss to Treasury and IRS.

• Fourth, given that TINs are unique, very real and powerful identities — the object of illicit demand and subject of theft and abuse — the forced, widespread unprotected sharing among all businesses based solely on a small dollar amount of aggregate yearly expenditures, would in other applicable contexts be scorned as dangerously promiscuous.  The magnitude of compulsory risk for our industry, and all of small business, is chilling.

• Fifth and finally, disproportionate burden:  Estimates of compliance across industries puts new 1099 reporting at multiples of ten (10) upwards past fifty (50) times current levels — Community Papers, anticipating formal requests for TINs from even our smallest and occasional advertisers, will see increases one thousand-fold (1,000x) and even higher at larger publications.  We are in the business of helping businesses generate business, and over the course of a single year even the smallest hometown publishers provide advertising services totaling $600 to several hundred and more micro and small businesses, in addition to others. For larger community paper publishers, that could run into the tens of thousands over the short span of fifty-two weeks.

The presumption behind these exponentially expanded reporting measures is the hopeful expectation that disclosure of this tsunami of new information will translate into significantly reduced illegal tax avoidance.  At the same time, there is a considerable concern bridging industry and government regarding the resulting paperwork burden and security risks, especially for small businesses.  Treasury and the IRS seek comment and have authority to issue rules exempting certain expenses unlikely to involve compliance difficulties, such as advertising, and in particular print advertising.

For the reasons detailed above, Community Papers urge the exemption of advertising from the duplicative 1099 reporting and the requisite and potentially hazardous TIN swapping triggered by $600 of services rendered over the course of the year.

Notes

………………..

1 The Association of Free Community Papers (AFCP) and Mid-Atlantic Community Papers Association (MACPA) are joined by the following state and regional trade associations of Free Community Paper Publishers:  Midwest Free Community Papers (MFCP), Southeastern Advertising  Publishers’ Association (SAPA), Community Papers of Florida (CPF), Community Papers of Michigan (CPM), Wisconsin Community Papers (WCP), Texas Community Newspaper Association (TCNA), Community Papers of Ohio and West Virginia (CPOWV), Free Community Papers of New York (FCPNY). Collectively, the Industry includes 2,673 hometown publications with a combined, audited circulation 65,187,292, and a small business client base, investing at least $600 a year, well into the millions — all to grow our inter-dependent economies.

Base Postal Reforms on Facts, Not Fiction

In Uncategorized on December 16, 2010 at 4:19 pm

There is a possibility that certain critical reforms of the USPS could take place in the Congressional Lame Duck Session now underway. Senator Collins, a longtime champion of our industry’s concerns, introduced legislation that would achieve major fixes we’ve sought for years including Priority One: Fix pre-funding and refund the billions associated with retiree health and pension overpayments. Now more than ever, discussion of Postal “Distress” needs to focus on facts — not the fiction in “common wisdom.”

 

Debunking 4 Common Myths About the US Postal Service

 

 

“Everyone is entitled to his own opinion, but not his own facts.” — Daniel Patrick Moynihan

 

 

The Post Office takes a lot of heat, especially when it asks for a rate increase. Some of the criticism is well deserved, but some of it is not. The institution dates back to our Nation’s founding and still touches our lives on a daily basis. It helps fuel billions in hometown commerce, and remains the last mile lifeline to durable communication across the land.

 

While the USPS consistently scores the highest favorability marks across federal agencies, fundamental misunderstandings persist about its operations.

 

We objected to the recent Postal Service request for an emergency rate hike. In our view, it was neither justified nor a long-term solution to serious problems facing the vital institution. Real and comprehensive reforms are needed, and those will take Congressional action. But for Congress to finally act to empower the USPS to help itself, we will need a constructive debate grounded in facts — and not the common myths we hear repeated over and again:

 

Myth One: The US Postal Service Runs On Tax Dollars.

 

Reality: This is utterly false. Postage — stamps and receipts from mailers — fund the USPS. It is entirely self-sustaining, and not at all reliant on taxpayers. Any comments about “wasting taxpayer dollars” are a distraction: It runs like a business, but still needs more freedom to run even more like a business.

 

Myth Two: The US Postal Service Is Doing Nothing to Cut Operating Costs

 

Reality: Simply not true. The Postal Service has taken big steps on both the labor and facilities fronts. It needs to build on that progress, but give credit where due. The USPS has reduced its career employment from 787,000 positions to about 584,000 today, closed and merged operations, and reduced costs by more than $20 billion during the last 10 years for a cumulative savings exceeding $50 billion.

 

Myth Three: So-called “Junk Mail” Loses Money for USPS

 

Reality: Just the opposite. Without advertising mail, the Postal Service would not have sufficient business to support its infrastructure and to continue to provide delivery services to an ever-growing network of delivery stops.  Many types of advertising mail are actually large profit centers for the Postal Service.  One category, called Saturation Mail, is used by free community papers, shared mailers, and coupon envelope companies, and pays one of the highest mark ups in the system – almost 240% of the actual cost to deliver.

 

Myth Four: Volume Declines are the Only Reason for the Postal Budget Crisis

 

Reality: Not true. If not for massive health care pre-funding requirements — a mandate not required of any other government or private entity — the USPS would not be facing the current deficit projections. The Postal Service would actually be breaking even — even in these tough economic times — if it were not required to completely prefund the costs of all retire health benefits (more than $5 billion a year) at the same time it is paying current retiree health benefits.  These annual payments are approximately $7 billion – essentially the same amount as published Postal Service loses.  Making matters worse, the USPS — and in turn postal ratepayers — is actually owed anywhere from $50 billion to $140 billion from the Federal Treasury for historic overcharges relating to retiree pension costs. These stunning figures can be found in reports issued by the Office of Inspector General and in an independent study commissioned by the Postal Regulatory Commission, but are too often missing in media coverage.

 

 

America needs a healthy, self-sustaining Postal Service. The USPS has taken significant steps towards operating as the efficient enterprise it needs to be. But it remains hampered in its efforts by legal constraints that can only be fixed by Congress. In order for it to fully tackle labor and facilities challenges — as well as obtain relief from unjust burdens and refunds for historic overpayments relating to retiree health and pension — comprehensive reform will need to be passed. And for that to happen, the debate will need to be shaped by facts — and not the most common myths about the United States Postal Service.

 

We Can’t Afford To Be Neutral on Net Neutrality

In Competition, Do-Not-Deliver, Do-Not-Mail, FCC, FTC & DOJ, Network Neutrality, Uncategorized on August 12, 2010 at 11:55 am

From my column in the upcoming edition of INK, the national trade journal of the Association of Free Community Papers:

The Google-Verizon “internet pact” — or “joint policy announcement” on “guiding principles” or self-serving internet carve-up or whatever it’s being called by the time this article goes to press — is a fundamental game changer. The good news is that the canaries have finally escaped from the mines and they’re flapping in the light of day. The exposure and reclarifications of private negotiations and agreements between two giants on the provider and search-video-advertising sides of the internet, put a fresh public face on all the back-room deal-making and denials of the substance of same. Their joint, “this is not a business arrangement” plan for a new parallel, pay-to-play fast-lane internet, with corresponding application blocking, content discrimination and toll booths for mobile broadband, has finally focused policy and jurisdiction where it needs to be.

The Google-Verizon scheme may change endgame in a way that Comcast’s actions — blocking lawful data, denial of blocking, subsequent admission of and reprimand for same, and then major court victory to do it again anytime without consequence — should have already transformed the policy debate on the uncertain future of the internet.

I’ve been preaching about preserving an Open Internet for several years now. During that time, the structural need for clear and fair rules on the information superhighway had smoldered on the back burners of regulators and Congress. Most discussion and analysis had been limited to passionate geeks, much of it buried in tech mags and blogs. All the while, our industry was legitimately more concerned with the pressing need to embrace immediate digital realities and seize opportunities to monetize our online offerings. In a presentation a couple years back on defending threats to distribution — including rack theft and fees, local litter laws and do-not-mail — I detailed the need to begin fighting against new toll booths that providers were quietly preparing to place on data over broadband. It has long been clear that if the major cable-telcos had their way, they would operate much like Dominion and DistribuTech do with print, in their practice of monopolizing high traffic locations and then extorting those using the demand distribution model.

Similar analogies could be made to local delivery laws favoring certain publications over others, or the USPS jacking rates disproportionately on Saturation or relegating our class to a new 14-day delivery window. Major difference here is options: With our print products, each scenario could be fought separately through numerous channels. Outcomes could be challenged and even failing that, each model of distribution still serves as a next-best fallback option. But in the digital world, a handful of companies control the pipes and 97% of our readers get their broadband at home — if they get it — from either a monopoly or duopoly provider. Putting that back in Dominion and DistribuTech context, applied to internet there’s no 2nd Option so we’d basically be held hostage.

Until the landmark Comcast decision in April, most ISPs kept any blocking and traffic tampering limited and discreet enough to keep public attention away. Collectively, the handful of major cable-telcos abided by the concept of Open, Nondiscriminatory Networks and the notion that the Federal Communications Commission had at least marginal authority to serve as cop on that beat. That tenuous power to enforce was actually a matter of faith written in Crayon when the FCC enacted rules between 2002 and 2005 that classified broadband as a magically bundled, fluffy information service. Abandoning sight of the critical communications component — the end to end transmission of digital data — shifted the FCC’s regulatory authorities onto quicksand. And it simultaneously put thousands of independent ISPs on the short end of the competitive stick and ultimately out of business.

The anything-but-Comcastic court ruling was bound to happen at some point. The Commission had finally begun a formal, public process to preserve an Open, Nondiscriminatory Internet when the legitimate authority they gave away mid-decade led to crushing defeat in the D.C. Circuit. To get out of the quicksand and onto solid ground, the FCC recently began seeking public input on ways to reclassify the transmission of data component of broadband as a communications service, among ways that it could legitimately regain authority to preserve the principles of Network Neutrality. It is important to note that the Communications Act gives the Commission this Rulemaking authority and the Courts have upheld the preeminence of expert agencies generally. And on the critical issue of end to end transmission of digital data, Supreme Court Justice Scalia has already opined that the Commission could separate the delivery from the pizza.

We have been actively participating in the public sausage-making at the FCC, filing comments and educating senior advisors on the competitive threats we’ll face on a web of arbitrary, capricious and pay-to-play fast and slow lanes. As the major ISPs have gone to Congress seeking to block and otherwise stall the transparent process at the FCC, we’ve made our case on the Hill, stopping procedural games like attempts at agency defunding. Through our collaboration in broader coalitions, we were represented on the seat speaking for small businesses and consumers at private stakeholder meetings. The Google-Verizon private deal-making put the final straw on top of mounting frustration over broader, but still limited private deal-making, leading the FCC to scrap private talks and get back in earnest to the open, public process well underway.

Meanwhile, the substance of the Google-Verizon scheme has helped immensely in cutting through the smoke screens crafted by the cable-telco lobby on the Hill, as well as poke major holes in their aggressive public relations campaign. The next couple of months will be critical in the fight for fair competition through an enforceable framework that preserves the openness and freedom of the internet. While most activity will take place in D.C., publishers can still help in a few productive ways. Editorials explaining what’s at stake and debunking common myths would be great, and if a public hearing or Commissioner-attended forum comes to a town near you, promoting and attending would be most helpful. Efforts will continue to be made by major ISPs to try to get Congress to stall the FCC, and here publishers could let their members know that the Commission should instead be encouraged to move their open, public proceeding towards a timely, favorable conclusion.

The New Wave of Political Advertising

In Legal Advertising, Political Advertising, Uncategorized on August 12, 2010 at 11:39 am

From the upcoming edition of the Mid-Atlantic Community Papers Association bulletin, The Messenger:

My column is usually dedicated to taking one of the many government related battles we’re involved in, dissecting it under a microscope and then taxing your patience with all the nitty gritty. But this time around, I’ll give a twitter-sized summary on the happenings in government relations and move on to opportunities on the brand new political advertising landscape.

This year has been the most challenging ever. From Annapolis to Harrisburg, to Columbus and Washington, D.C., we’ve been pushing the free community paper policy agenda. We defeated a new tax on advertising and are fighting same at overreaching interpretations of old law on printing. We passed legals through the House and are pushing them in the Court. And we continue to put our recipes for fair competition in the Federal Sausage being ground in multiple proceedings seeking to “Save News,” to stop new traffic tampering toll booths on an Open Internet, as well as stop Cross-Media Monopolies in our hometown markets.

Ok, that was a couple tweets worth but still not the customary flogging. Now onto what changed to make this a new day in political advertising, and setting arguments over good or bad for Democracy aside, how this could be great for your bottom line heading into fall. Earlier this year, the U.S. Supreme Court handed down a monumental Ruling on political advertising in Citizens United vs. FEC. In a nutshell, SCOTUS essentially ruled that corporations are citizens, money is speech, and therefore limiting their spending on advertising to influence elections and issues is a violation of their Rights under the First Amendment.

Citizens United is a fundamental game changer. Corporations (including incorporated trade and consumer associations) and Unions can now use general treasury funds to pay for advertisements expressly advocating the election or defeat of clearly identified candidates for federal office anywhere at anytime (like: Vote for Bob Smith for US REP), as well as referring to clearly-identified elected officials for legislative purposes (for example: Call Senator Jones and ask him to vote against the Senate’s Cap and Trade bill). The ruling did not tackle the issue of campaign financing, so the playing field with all the bright new lights is advertising with we the media. And while Congress has moved to Legislate new restrictions, it’s unlikely anything more than a couple sandbags in the flood will pass the Senate.

While federal Candidates, themselves, tend to stick to cookie-cutter Radio and TV spots and politically entrenched direct mail shops, the folks that just got the green light to spend large are more likely to operate like the businesses they are. Display advertising could be very attractive, especially where it maps well over districts, and these folks should actually listen to the compelling case for inserts over direct mail pieces. Based on all manner of sources, unprecedented amounts of money is being raised, to be spent by these Business Groups, their counterparts in Unions, and established as well as continuously sprouting Front Groups from Left and Right — to educate Voters this November on the Candidates’ positions on their pet policy issues.

Our readers are in traditional Battleground States where several federal races, both state-wide Senate and district-level House seats, are paramount to special interest agendas. Many of these are anticipated to be very competitive, critical to the margins in the Congressional Balance of Power, translating correspondingly into probable life or death of these organizations high-stakes issues. Some political advertisers might just end up finding you on their own — there are examples from primaries across the country where prominent local businesses have taken out full pages backing Congressional candidates.

But there is actual research, planning and coordination we can all start doing now, assuming there’s interest. For my part, I already monitor a range of national players now for policy stances that could impact our industry, and will be watching for the races these groups plan to target with an eye towards Mid-Atlantic opportunities. At your own papers, you might check out this fantastic resource if you’re interested in proactively selling advertising for US House races: Center for Responsive Politics’ OpenSecrets.org — click top left button, “Politicians & Elections” and scroll down to “Congressional Elections.” From there, it’s a snap to find every contest by district and each has top corporate and union donors revealed by clicking the “Contributors” tab. After your jaw drops, the list you’re looking at are your prime targets, those with serious coin in the game now — and this is their first chance to openly exercise their First Amendment Rights with political advertising in your publication.

As always, please feel free to contact me anytime about this or any other issues or concerns.

The Association of Free Community Papers Teams with Rotary International in Haiti Relief Efforts

In Uncategorized on February 23, 2010 at 3:23 pm

Gathered for their winter board meeting and also to complete the process to select their next Executive Director, the Board of Directors of the Association of Free Community Papers turned their attention to the needs of the Haitian community. The Board unanimously agreed to support the ongoing relief efforts of Rotary International District 7910 with $5,000 from its charitable fund.

“This is on top of, not instead of, our longstanding commitments to the March of Dimes,” said AFCP President, Orestes Baez. “The need in Haiti is staggering and immediate. I know many of our member publishers are offering support in their own ways, and we need to endorse those efforts at the national level. Support from the Association will help to keep our industry’s attention on our Haitian sisters and brothers after the camera crews pack their bags and coverage fades.”

“This is a perfect fit,” said Carol Toomey, AFCP’s Second Vice President and current District Governor of Rotary International District 7910. “We want to help the Haitian people when, where, and how they need it — not have money sit in a bank account. Those needs are constantly changing, and relief efforts have both short and long term challenges. Our District members had relationships with the ravaged community well before this cataclysmic event, and our friends on the ground are making real-time assessments. We’ve been able to convert dollars to vital material supplies stateside, and get them to the Hatian people at remarkable speeds. This hands-on network enables us to take incoming donations at District and translate them quickly into shelter, orthopedic supplies and even a device that sterilizes surgical tools and prevents infection,” Toomey said.

“Our members were there before this disaster, and AFCP’s generosity helps to ensure that we will remain throughout the rebuilding and beyond,” added Toomey. To date, the coordinated efforts of a multitude of partners helped to immediately shelter, feed and hydrate tens of thousands of displaced Hatian families in conjunction with ShelterBox and AquaBox. Medical needs have also been met with both the direct services of emergency teams and a warehouse of supplies. Doctors, nurses and other professionals arriving onsite have been met separately by air and container shipments of splints, casts, walkers, canes, crutches and other emergency medical supplies from District. “Going forward, continued support like AFCP’s remains essential for us to bolster the critical efforts of other longtime partners, including the Haitian Health Foundation, now serving the needs of throngs of refugees that fled Port au Prince for safety in the City of Jeremie,” Carol reminded.

AFCP selects new Executive Director, industry veteran Loren Colburn

In Uncategorized on February 23, 2010 at 3:21 pm

The Board of Directors of the Association of Free Community Papers, after a three-month selection process and in accordance with their by-laws, selected Loren Colburn, Publisher of the Scotsman Press, as the new Executive Director for the Association. The final presentations and the selection vote was completed during the Winter Board meeting in Florida. Colburn is past president of the Association and is currently the sitting Secretary-Treasurer. He replaces Craig McMullin, the long standing previous Executive Director, who tragically lost his life last year in an accident.

“We are very excited to have Loren Colburn in this key leadership position”, said Orestes Baez, current President of the Association of Free Community Papers. “Loren is the consummate professional and has the skill set and leadership strength to bring this organization through this most difficult chapter and up into new heights and direction. We thank all the candidates that gave us the opportunity to make this very important selection”.

Colburn emphasized several key items during his presentation to the Board. He mentioned improving the communication for the advertising network known as NANI as well as adding a banner ad network, a display ad network and an insert program. “Among the many priorities expressed by the Board over the past few years, focusing on expanding the revenue opportunities that helps AFCP provide more member benefits is a critical success factor for us going forward” said Colburn.

A strong community supporter, Colburn has served many boards in his community including the Syracuse Chapter of the March of Dimes. Colburn is a graduate of State University of New York and College of Cortland. He and his wife, Cindy, have three sons: Chris, Brian and Jeff. He will assume the role of executive director in six to eight weeks. Interim Executive Director Don Gimberline agreed to continue his role until Colburn assumes the leadership position.

The Association of Free Community Papers is the largest, national trade association of free community paper publishers. http://www.afcp.org

Legals Rate Regulation BandAid Not Cure!

In Uncategorized on November 17, 2009 at 2:23 pm

After decades of charging the highest legal advertising rates in the nation, now faced with legislative resolve and the prospect of bona fide print competition and the reality of the digital future, the Monopoly Lobby is “Compromising” with a topical treatment for an internal disease. Rate regulation is barely a BandAid for all that plagues the legal advertising system in our Commonwealth. Here are 3 reasons this scheme falls short of real reform:

 

1. It does nothing to address the loss of over 175 paid newspapers and millions of readers since Title 45 was last revised in 1976. The collapse of competition is the single greatest factor enabling widespread profiteering. And the demonstrable declines in circulation withhold notice from the vast majority of the intended audience.

 

2. Competition drives rates lower than mere regulation. Philadelphia v. Camden is the ultimate example: Competition inspired the same publication to underbid New Jersey’s regulated rates, while keeping those it charges Philadelphia as high as it pleases in the absence of legal challengers. The factor is a shocking 63 to 1 savings — or gouging — depending on the side of the Delaware River. Zero competition enables $17.79 per line, while real competition drives offers to provide that service for $00.24 per line! SEE: FOOTNOTE #4

 

3. Rate regulation is practically unenforceable. Newspapers are not subject to Open Records Law, the myriad rates in effect are not transparent and the preferred rates negotiated with select advertisers are closely guarded. And once again, the negotiated rates are given to advertisers that can shop around, that leverage the force driving the bargain. There is no public database of rates in effect, the example below is available to the most sophisticated advertisers, for a price. Even if the state were to tackle the issue of rate transparency, looking below which rate would it mandate as the basis for Legal Advertising? There are nearly two dozen different rates in effect, all for the same ink on the same pulp, in the same section of line ads. Would PA choose the Sex Lines rate which is nearly half the PA Government rate, or would it rather get the New Jersey deal that was inspired by competition? Please note that such secret rates are not disclosed even to proprietary database subscribers.

 

For these compelling reasons we urge the House to reject the BandAid of Rate Regulation, and ask that the cure be comprehensive reform. And as we’ve shown over and again with our Exhibits of Rates and Circulations across the Commonwealth, competition from well-established free Community Papers should be a critical component of any final Legal Advertising Reform product.

House Rejects Legals Competition!

In Uncategorized on November 17, 2009 at 2:11 pm

…party-line votes instead to preserve Pay-to-Read Publications’ $26 Million Monopoly on Legal Advertising. But with a new so-called “Compromise” Blue Light Special Sale Price.

On the first day back from Bonusgate Round Two, the PA House — at long last! — took up the issue it dodged for decades: Legal Advertising Reform. The Pay-to-Read Lobby pushed for Protectionism. And Community Papers and Local Government Stakeholders — i.e. Monopoly Ratepayers — urged Free Market Competition.

The Creighton Amendment — A 03587 — would have provided the Option of Competition from Free Community Papers. Same as HB 1876 as filed (PN 2485) and HB 677. Those responsible for placing Legal Advertising could finally get to shop around for the best possible coverage and cost. (Note the amazing disparities — or opportunities — in Exhibits A & B).

But the most influential Pay-to-Read Lobby made the Tempting Bargain: Preserve Our Monopoly — Save Us From Market Forces & Technology — And We’ll Promise to Start Charging Less than the Extortion Rates Now In Effect. For the moment, anyway, our legislators took that so-called “Compromise” bargain.

As we’ll continue to explain, it simply can’t work as promised. And at the end of the day, the Free Market will prevail.