US: legislation illustrates where newspapers stand in the media hierarchy

Posted by John Burke on November 17, 2005 at 1:16 PM

The US Congress has proposed two bills this week that would give subsidies to American citizens in regards to two types of media. Newspapers are not one of them.

As all television is moving towards digital, Congressmen worried about the estimated 22 million American homes that have incompatible sets have proposed a $3 billion plan to provide them with cheap digital converters. The converters, in the range of $50, would be available to qualifying households for a $10 co-pay.

Under existing legislation, the digital transition is officially supposed to happen on December 31, 2006 but that could be changed.

A different bill proposes that cheap, high-speed Internet access should be available to all Americans. Congresswoman Nancy Pelosi said the legislation "will put all Americans, no matter where they live, no more than a keystroke or a mouse click away from the jobs and opportunity broadband both creates and supports."

Essentially the American government is looking to furnish its citizens with the hours of entertainment and education they're used to through television and the wealth of information about anything that the Internet provides.

If the knowledge that comes from television and the Internet is so important, why haven't there been any past subsidies to the newspaper industry to provide less fortunate readers with subscriptions?

One thing is certain. If there is to be universal Internet access, now is the time for newspapers to stop handing over dividends to their stockholders and start investing the money in multimedia research and development so that they can evolve and maintain their relevancy in the Internet age.

Sources: Nasdaq, AdAge, The Motley Fool