Last year, in his remarks at the Federal Communications Commission workshop on the future of noncommercial media, Free Press President and CEO Craig Aaron made a provocative statement:  

There is no longer enough private capital — in the form of advertising, subscriptions, philanthropy and other sources — to support the depth and breadth of quality local, national and international news reporting our communities need to participate in a 21st-century democracy.

At the time, the statement was a best guess based on the statistics and trends that were available. The FCC has now released their report on the Information Needs of Communities and in it they spend significant time probing the economics of what we have lost from our media and journalism and how we could begin to fill that gap. The evidence and economic analysis in the FCC report seems to confirm that we are facing a serious gap in financial support for exactly the kind of news we need.  

Before we can decide how to fill the gap in funding and the gap in reporting our country faces, we first have to define that gap. Here is how the FCC tries to quantify what we lack, in terms of accountability news and local journalism. 

• There were about 13,400 fewer newspaper newsroom jobs in 2010 than there were in 2006, dropping from 55,000 positions to about 41,600. Over the years, newsmagazines, local commercial radio, and local TV have reduced their newsgathering staffs, as well. 
• Rick Edmonds of the Poynter Institute ... calculates that with 2009 aggregate revenues of $37 billion, daily newspapers were spending $4.4 billion on news operations—an overall drop of about $1.6 billion in annual spending since 2006.
• Ava Seave, a adjunct professor at the Columbia Business School and Journalism School, studied the same issue from another angle for this report. Looking both at jobs lost and new jobs created in the new media economy (such as by Patch and NPR), she concluded that in 2008-09, there were between 7,000 and 10,820 fewer full-time journalists earning between $800 million and $1.3 billion less  in editorial salaries, than in an average year from 2001 to 2006.
• According to 2007 census data, the U.S. contains 3,033 counties, 19,492 municipal governments and 16,519 townships. There are also 14,561 public school systems, and 37,381 special districts overseeing a wide range of municipal operations, including, hospitals, mass transit, airports, stadiums, waste disposal, and water supply. Covering all those units of government would take about 50,000 reporters.
• If we conservatively assume that 20 percent of people currently working in newspaper newsrooms, local TV station news operations, and other outlets are working on accountability beats, this would yield 20,000 journalists.  To hire the 30,000 journalists that would bring the total working on local and state accountability beats to 50,000, it would cost $1.6 billion.

The FCC isn’t the first to wrestle with these numbers. Others have also contributed useful data to understand where the news business is, compared to where it has been.  

• In his book, Newsonomics, Ken Doctor calculated that between 2008 and 2009 there were almost 830,000 stories that went unreported because of job cuts in newsrooms.  
• Over at his Newsosaur blog, Allan Mutter looked at what it would take to replace every current newspaper with a nonprofit. He argued that it would take an endowment of “$88 billion – or nearly a third of all the $307.7 billion donated to charity in 2008 – to fund the reporting still being done at America’s seriously straitened newspapers.” 
• A recent ProPublica and Columbia Journalism Review article examined the rise of public relations that has run parallel to the struggles of journalism. Quoting research which originally appeared in Robert McChesney and John Nichols’ book The Death and Life of American Journalism. They write, “In 1980, there were about .45 PR workers per 100,000 population compared with .36 journalists. In 2008, there were .90 PR people per 100,000 compared to .25 journalists. That's a ratio of more than three-to-one, better equipped, better financed.” 

The FCC report culls data from a range of other sources, presenting a litany of disheartening stats: Half the states no longer have a newspaper covering the U.S.. Membership in journalism associations representing key civic beats are dwindling. And on, and on.

The report goes on for many pages, tracing all the factors that might make it possible for new and old commercial media developing to fill this gap, as well as all the factors that might make it impossible. For all the optimism in the report, based on these lists at least, the deck seems squarely stacked against the market filling in the gaps anytime soon. In many ways the FCC report puts a nail in the coffin of the debate over whether there is a market failure for the critical accountability journalism that democracy needs.

The FCC report also provides an interesting cost/benefit analysis, exploring what the news and information gap costs us as a nation.

Would it be worth it? Having less reportorial journalism means that governments are apt to waste more money, citizens’ rights are more likely to be infringed upon, and schools are more likely to underperform. The U.S. spends $560 billion a year on K–12 schools, with increasingly discouraging results. It would cost about $231 million a year to ensure that every school system has at least a half-time reporter covering schools. It is difficult to quantify the benefits foregone from a high school that could have been better or a river that could have been cleaner or a hospital that could have saved more lives. But we feel extremely confident in saying that the dollar value is orders of magnitude more than $1 billion.

Other research quoted in the FCC report shows the impact of decreased news and information on civic engagement and voter turnout. Unfortunately, the report’s recommendations would do little to address the gap they so expertly identify. While many of the incremental changes suggested in the report are helpful, few are bold enough to make an immediate impact.

If we return to the premise with which we began -- there is not enough money in the commercial sector, in foundations, or in individual charity to sustainably support critical accountability reporting-- then we must consider a more active role for the federal government than this FCC was willing to do in their report. At Free Press we have suggested establishing a trust fund for public and noncommercial that would expand on our current system while investing in innovation and supporting new forms of community media and local journalism. We now spend about $430 million per year in public money for public media. That works out to less than $1.50 per capita. Sweden and Norway rank No. 1 and No. 2 in federal funding for public media, and both rank at the top of The Economist’s annual Democracy Index, which evaluates nations on the basis of the functioning of government, civic participation and civil liberties. The United States ranks 18th. To match that investment, we would have to spend almost $30 billion a year on public media.

But we don’t need to even go that far. We could start with the $1.6 billion that the FCC came to in their estimates. That’s about $5 per person, per year, and would have a profound impact on news and journalism in America, helping support new innovative journalism efforts and expand the best of what is already working.