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November 2017

The media business has come a long way since the heady days of newspaper barons like William Randolph Hearst who in 1887 was given control of the San Francisco Examiner by his father and would build an empire to include 28 newspapers, along with magazines, book publishing, news services and the film business.

At its peak, it was estimated that Hearst print products by 1930 reached an estimated 20 million daily readers. Hearst in those days had a reputation for what would be dubbed “yellow journalism” – a more sensational approach to news coverage but also one that allowed his newsrooms to tackle tales of municipal and financial corruption.

Hearst was just one of a number of colorful tycoons who made their fortune with newspapers.

Today we still find print tycoons, like Michael Bloomberg, former New York mayor who owns Bloomberg news services, Jeff Bezos from Amazon fame as the new owner of the Washington Post, or the Sulzberger family from The New York Times. But we also find investment groups taking ownership of the larger newspaper chains. In fact, of the top 25 newspapers in the country, seven are reportedly owned by investment firms.

The landscape has also changed in another way – digital media platforms like Facebook, Twitter, Google and others have replaced print products as the most influential news sources in the country. Facebook alone is estimated to have two billion users world-wide, which makes the digital media companies the new influencers when it comes to the court of public opinion, including in the United States where a recent poll shows that slightly over 40 percent of users of get their daily dose of news from Facebook.

It should come as no surprise that there is general unease in this country that a foreign power – as founding father Alexander Hamilton warned in the 1790s – would meddle in a U.S. election through invented news stories and paid advertising strategically targeted at voters leading into the 2016 primary and general elections.

By one estimate in recent weeks, six Russian-related accounts with Facebook produced ads that reached 340 million viewers in advance of the November 2016 vote. And the Washington-based bipartisan public policy research group The Alliance for Serving Democracy tracked 600 Twitter accounts linked to Russian operations.

So it is long overdue for Congress to at least start trying to tackle the issue of transparency when it comes to political advertising on the internet, although I am not convinced that the foreign power interference problem can be completely resolved or that current proposals rumored to be introduced in coming weeks are as thorough as they can be. Nor am I convinced that the problem of invented (fake) news stories can be solved.

Let’s just take a look at how political ads on traditional media – newspapers, television, radio and robo-calls – are regulated by the federal government.

When an issue-oriented ad or an advertisement promoting a candidate is placed with print or broadcast outlets, the ad must contain the name of the group placing the ad. As the theory goes, disclosing who paid for an election ad allows readers or viewers to understand who is behind a political message, although I have always questioned whether readers or viewers have the time or inclination to further research the groups placing ads.

More specifically, the Federal Election Commission (FEC) requires varying disclaimer and ad sponsorship notices when it comes to newspapers and magazines, along with any printed materials as part of a campaign. The requirements include not only the name of the group/person placing the paid ad but also the address. FEC regulations also provide specific instructions on how public disclaimer and ad sponsorship notices must be handled on television, radio and robo-calls.

But current FEC regulations specifically exempt email messages and anything posted on websites or digital communications such as Facebook, Twitter and Google.

There have been attempts by the FEC to expand transparency requirements to the internet but lobbying by industry officials have staved those off, including in 2010 when Google received a waiver and in 2011 when Mark Zuckerberg from Facebook sought an exemption from disclaimer rules. In the latter case, the FEC board split 3-3 when it came to a vote on the issue so digital platforms still face no requirements like other media outlets.

In terms of what we can expect in the coming weeks out of Congress, House and Senate members have a long way to go before true regulation is developed. At this writing, the main proposal being floated in the Senate would require any group placing internet ads costing $10,000 or more to carry disclaimer notices.

Traditional media must require disclosure and disclaimer information starting at dollar one, so why digital advertising would have a more relaxed requirement is beyond me. Further, if a foreign power was crafty enough to use social media undetected in this last election, I am sure they are already planning on how to beat the $10,000 spending limit so they won’t face reporting requirements.

More disconcerting is the fact that no one is talking about how to prevent foreign powers from spending any money on advertising to influence an election. Candidates and election committees are already prevented by law from accepting donations from anyone or any group outside the United States, so logic would dictate the same rule would apply when it came to online efforts that are politically related – be it in paid advertising or paid boosting of invented news stories posted on a site.

Lastly, Congress and the FEC must tackle the question of the digital news platforms and any effort to review ads or paid “news” postings before they appear online. Facebook has already said they would be hiring 1,000 new employees who would be assigned to review all political advertising, which is a start but as a self-regulation effort it may not be enough. There must be some strict requirements for review.

Congress needs to act fast, now that we have tangible evidence that a foreign power tried to influence the 2016 election, before anyone further undermines our democracy.

David Hohendorf


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