Free Press wants a $50+ billion endowment; would produce annual funding of $1.5 billion. But this is a drop in bucket compared to aggregate private media expenditures which total in the hundreds of billions each year
$270 billion spent on advertising in 2008
according to the Census Bureau, when aggregated together, U.S. "information industries" include over 140,000 establishments and have over 3.3 million employees. And the publishing industries alone (not including the Internet) are a $300 billion a year sector.
are public subsides going to fill that void?
and where will all this money come from in tight fiscal times!
does Congress or the taxpaying public really have the appetite for massive media bailout? It seems unlikely.

3) Shouldn't force taxpayers to foot the bill for things they might not want or find offensive

Should liberals be forced to help fund the next Fox News or Rush Limbaugh?
Should conservatives have to support Keith Obermann or Bill Moyers?

4) Greater government involvement--even in the form of subsidies--will raise profound questions about press independence & First Amendment rights

Ken Ferree on FCC's "Future of Media" public notice: "The problem is that the very act of initiating such an inquiry will chill protected speech; government inquiries into what is and is not working in the area of news, information, and media is itself an affront to the First Amendment. And it is no answer that the Commission has embarked on this journey with beneficent motives, it has no power to derogate from the protections of the First Amendment in the name of what one group of bureaucrats may think are important government interests."
Chilling effect could be very real... "Regulation by 'raised eyebrow' has become a well-established tool for a number of federal agencies, including the FCC, but with this inquiry the Commission has taken the concept to a level heretofore unknown - this inquiry is regulation by penetrating leer." - Ken Ferree
In particular, putting journalists on the public dole, as some like Free Press have advocated, compromises their independence [Free Press has proposed "a journalism jobs program to support veteran, qualified reporters and simultaneously to engage young people in journalism" that would be part of AmeriCorps.]
The prospect of a large swath of the American media sector being treated as publicly funded wards of the State isn't just a small leak in the important wall between Press and State, it is the end of that wall. It would dynamite that wall to the ground. It could potentially open the door to a fundamental corruption of the journalistic profession by public officials who would not likely be able to resist the urge to pressure those who are subservient to the State.

5) Oh, by the way, where exactly does the FCC and FTC derive the authority to be playing these games?

Sure, they're just studying the issue. But neither agency has the power to act expansively in this area, yet both agencies can simultaneously threaten media operators with other forms of regulation. Such indirect intimidation could have the chilling effect mentioned previously

What Can Be Done to Promote Journalism / Assist Media Operators?

1) First, Do No Harm... Be patient and humble.

We are in a gut-wrenching evolution with a great deal of creative destruction taking place, but we should be careful to not to head off potentially advantageous marketplace developments, if even some are highly disruptive

2) Exercise extreme caution re: new or existing public interest regulatory obligations, which won't make media reinvention any easier

localism requirements
educational programming mandates / advertising restrictions
political airtime or advertising regs
speech controls
other public interest requirements

3) Beware new advertising restrictions at both FCC & FTC

If the complaint is that private media funding streams are drying up or being fragmented, crippling advertising is the last thing we should be doing!
And yet, there's a plethora of new regulatory proposals pending; many fronts in "Washington's war on advertising"
FCC
- content-based ad blocking being studied
- new children's television advertising restrictions rumored
- FCC investigating product integration advertising
- talk of regulating erectile dysfunction ads in Congress
FTC
- Increasing signs that agency is on warpath to regulate online advertising / targeted ads
- continues to put pressure on re: marketing of violently-themed entertainment to children
- now stepping up oversight of online product placement or "blogola"
- there's also legislation pending that would require the FTC to regulate "advertising, promoting, and marketing directed at children and youth" to promote healthier lifestyles
Regardless of how well-intentioned these or other regulatory efforts may be, as the FCC & FTC continue their inquiries into the future of news and journalism, they would do well to remember that an attack on advertising is tantamount to an attack on media itself
If Washington goes to war on advertising, private media will suffer because advertising is the very mother's milk of private media in this country.
Biggest threat of all = Free Press is calling for "small tax" on advertising to fund public media programs
- in other words, FP wants to tax private media operators to fund public media competitors
- Now there's a sure-fire way to destroy private journalism... force private media providers to fund their own, publicly-subsisted rivals!!
- It's precisely what the French, masters of socialized media, have recently proposed

4) Gov't must be willing to allow business model flexibility

micropayments
paywalls
other subscription-based schemes
more personalized, targeted, and potentially more profitable, advertising
even if they don't work, experimentation must be allowed

5) Ownership flexibility needs to be part of the solution

It's no silver bullet, but essential to allow flexibility to determines what works

6) Non-profit BUT non-governmental options should be allowed

But non-profit status shouldn't come with all sorts of strings attached
- Ex: Sen. Cardin's "Newspaper Revitalization Act," which would forbid political editorializing in exchange for non-profit status. It would protect incumbents from criticism.
and, again, ownership flexibility will need to be part of this for non-profits to work
- hybrid arrangements including co-op models & joint ventures will need some scale to survive
- useful to remember that many foreign "public media" efforts have massive scale & if we expect private non-profit operators to survive, they'll likely need some serious scale as well.

_________________

Additional Reading:

Ken Ferree - Another Naïve Proposal for Government Entanglement with the Fourth Estate

Ken Ferree - A Chill Wind Blows

Adam Thierer - A "Public Option" for Media? The Free Press Plan to Put Journalists on the Public Dole

Berin Szoka & Adam Thierer - Chairman Leibowitz's Disconnect on Privacy Regulation & the Future of News

Adam Thierer - The Dangers of Subsidized News, Continued

Adam Thierer - Public Option for Press Should Get the Red Pen

Adam Thierer - Free Press, Robert McChesney & the "Struggle" for Media

What Funds Media? Can Government Subsidies Fill the Void?

1) Public media & subsidies can play a role, but that role should be tightly limited

2) Indeed, public financing would not begin to make up the shortfall from traditional private funding sources

3) Shouldn't force taxpayers to foot the bill for things they might not want or find offensive

4) Greater government involvement--even in the form of subsidies--will raise profound questions about press independence & First Amendment rights

5) Oh, by the way, where exactly does the FCC and FTC derive the authority to be playing these games?

What Can Be Done to Promote Journalism / Assist Media Operators?

1) First, Do No Harm... Be patient and humble.

2) Exercise extreme caution re: new or existing public interest regulatory obligations, which won't make media reinvention any easier

3) Beware new advertising restrictions at both FCC & FTC

4) Gov't must be willing to allow business model flexibility

5) Ownership flexibility needs to be part of the solution

6) Non-profit BUT non-governmental options should be allowed