October 17, 2012

Rights and Regulation

Independent Media Inquiry

AJ Liebling:
Freedom of the press is guaranteed only to those who own one.
(The New Yorker, 14 May, 1960)
[Freedom] of expression is not an absolute right. …
[The] competing interests are the right to protect reputation and the public’s need to receive information and ideas.
(p 252)

An enforceable right of reply is a desirable reform for the media.
There are no significant moral or policy objections to such a right …
[There] are arguments against making a right of reply enforceable …
[However,] the advantages of enforcement outweigh the disadvantages of leaving [this to the goodwill of publishers.]
(p 260)

An enforceable right will only be needed in those cases where the media behaves contrary to their own codes.
(p 261)




  • Independent Media Inquiry, Department of Broadband, Communications and the Digital Economy, Commonwealth of Australia, 28 February 2012.
    Ray Finkelstein: former Federal Court judge; former President, Australian Competition Tribunal.
    Matthew Ricketson: Professor of Journalism, University of Canberra.


    A right of reply

    Justifications for a right of reply

    A right of reply has two principal justifications:
    • the protection of the rights of the individual or group that has been the subject of adverse reporting, and
    • the right of the public to receive accurate information, and/or to maximise diversity of information on issues of public interest.
    (p 247)

    [The] law provides a remedy in defamation by way of damages.
    [However, this] is of little use to most people.
    A compulsory right of reply could in part be regarded as a practical method of [protecting] a person’s reputation. …

    [It also] ensures that audiences are made aware of competing versions of events and different opinions. …
    [This] is consistent with [the ‘marketplace of ideas’ theory of free speech] as it ensures that the ideas available in the ‘marketplace’ reflect not just one point of view or opinion, but several.
    [It thereby facilitates access by the public to the relevant facts or opinions on which to base informed judgments about democratically important issues.]
    (p 248)

    [This] ensures that on matters relevant to democratic decision-making, the public [has access to the relevant facts or opinions necessary to make an informed judgment. …]

    [Journalistic] codes of conduct generally recognise the need to allow a person the subject of adverse reporting to put his/her side of the story. [There is, therefore] no significant opposition to a right of reply at a moral level.

    Arguments for and against an enforceable right of reply

    [Views] differ on whether an enforceable right of reply is desirable.
    [Some] support a right of reply as a matter of principle [while opposing] an enforceable right of reply [in practice. …]
    (p 249)

    [Arguments] for an enforceable right of reply …
    • [A] right can provide a remedy for [reputational harm should] not simply left to the goodwill of the publisher. …
    • [Such a] right serves the public interest by maximising the available speech on a given issue, thereby enhancing freedom of expression.
    • Where [newspaper ownership is concentrated] to the point of monopoly … there may be no other effective publication option available to the person concerned.
    • An enforceable right of reply can be regarded as less of a limit on freedom of expression than a defamation suit.
      It does not fine or punish a person for publication and does not operate as a prior restraint.
    (p 250, italics added)

    [Arguments] against an enforceable right of reply …
    • The freedom of speech [includes] a freedom not to speak, or not to speak certain words …
    • It has a chilling effect on speech, in that the media may choose not to publish adverse material about a person … if the media outlet thinks that it will be required to publish a reply. …
    • If a media outlet is required to publish a reply, it will necessarily have to omit something else — either more of its own speech, or revenue-generating advertising.
      (This [does not apply] to the internet).
    • Codes of ethics are sufficient to ensure that [subjects are] given an opportunity to [reply.]
    • Self-regulation is the appropriate mechanism for providing a right of reply [because the media itself is the less likely to abuse the enforcement of rights of reply] in favour of their own and other vested interests [than government appointed regulators or the judiciary.]
    (p 251)

    Should there be an enforceable right of reply?

    There can be no doubt that requiring [an editor] to publish speech with which they do not agree is an interference with [her] freedom of expression.
    [However, as Mill noted, the non-suppression of contrary viewpoints confers benefits to the democratic process by promoting the free flow of ideas.
    An enforceable right of reply is a form of anti-censorship]

    [The] media commonly publish speech with which they may not agree, [e.g.] in the form … of paid political [advertisements].
    [A] right of reply [simply requires] a publisher to do for free what it would otherwise do for a fee. …

    Many countries have … statutory provisions for a right of reply [or have had them in the past.]
    [Studies] have concluded that they have not had a chilling effect on press freedom.
    Franklyn Haiman:
    These fears [of a chilling effect] seem quite unfounded.
    Not only is the right infrequently invoked — thus consuming an infinitesimal portion of space in any newspaper or magazine — but it appears to have had no discernible effect on journalistic vigour.
    [Indeed, it] may well have been a contributing stimulus to the generous amount of space in the French press devoted to Letters to the Editor, guest opinion columns, and other modes of voluntarily granted direct and mediated access.
    It has certainly helped to provide a livelier and more diverse reading bill of fare for the public. ….
    (Citizen Access to the Media: A Cross-Cultural Analysis of Four Democratic Societies, 1987)
    (p 252)

    [The] chilling effect [argument] appears to be [based on] an assumption about how people would behave, rather than an empirically-tested hypothesis.
    (p 253)

    [Media organisations indicated they would] would commonly offer [a subject] an opportunity to respond before publication.
    [If it is appropriate to provide such opportunities before publication, why not afterward?]
    (p 254)

    How might a right of reply work?

    • Timeliness: …
    • Cost: …
    • Scope:
      [Any] comment about a person or group that is likely to cause wrongful harm and the person or group asserts on reasonable grounds is false or misleading. …
      one purpose of the right of reply is to provide both sides of the story …
      [It] does not depend on identifying … which of those sides is correct.
    • Place of publication:
      • In a newspaper, the reply would need a degree of prominence commensurate with the prominence of the original report. …
      • On the internet [it] could be embedded on the page that contain the offending report, so that anyone who … reads, views or listens to the original report will have the opportunity to read, view or listen to the reply. …
    • Exclusions:
      Where a person or group has already been given the opportunity to comment on a report … there should be no further right of reply.
    (p 255)

    International and comparative examples of a right of reply

    • Some countries have a constitutional recognition of a right of reply. …
      France, Denmark, Germany and South Korea have right of reply laws that apply to the media generally …
      … Ireland has a right of reply scheme applicable to broadcasters only
    • Turkey, Brazil, Portugal, Slovenia and Croatia have constitutional recognition of a right of reply
    • Florida had a [limited] right of reply statute, although it was declared unconstitutional by the United States Supreme Court.

    The United Kingdom

    [Several bills] have been introduced into Parliament over the years, though none has passed …


    [The] Broadcasting Act 2009 … provides that
    any person whose honour or reputation has been impugned by an assertion of incorrect facts or information in a broadcast shall have a right of reply.
    (p 256)

    A Right of access

    • The privately-controlled free and open market place of ideas is a romantic myth.
    • More often than not, the private market kills ideas before they have the opportunity to compete. …
    Alexander Meikeljohn
    [What] is essential is not that everyone shall speak, but that everything worth saying is said.
    (Political Freedom, Oxford University Press, 1965)
    (p 261)

    Justifications for a right of access

    • [The] protection of the rights of an individual or group that wishes to express a view on matters in the public interest, and
    • The right of the public to receive accurate information, and/or to maximize diversity of information on issues of public importance.

    [A] common analysis is that freedom of speech simply requires that individuals or groups that wish to express their views are not, by law, prevented from doing so …

    An alternative view [recognises] that to be effective, a person or group may require access to means of mass communication. …

    [The] power to inform the public and to shape public opinion resides in large measure in the mainstream media …
    [This] power is open to abuse, particularly when media ownership is concentrated in a few hands. …
    (p 262)
    Jerome Barron:
    Government is not the only obstacle to the uncensored … dissemination of ideas.
    Private sources can easily ‘determine not only the content of information but its very availability’.
    (Access Reconsidered, George Washington Law Review, 2008)

    [An enforceable right of access seeks to] equalize opportunities for expression. …
    (Access to the Press — A new first amendment right, Harvard Law Review, Vol. 80:1641, 1967, p 1670)
    To reach the goal of maximising public access to diverse facts, ideas and viewpoints, a right of access would be more effective than a right of reply.

    Arguments for and against an enforceable right of access

    [A] right of access that is broader than a … right of reply would have a greater chilling effect …
    [In 1985 the] FCC took the view that [the Fairness Doctrine had resulted] in broadcasters eschewing controversy and serving up … bland programming [instead.]
    (p 263)

    [Thousands of complaints had been filed] involving significant legal costs for broadcasters along with the potential for loss of licence …

    Academic studies in the United States have diverged as to whether the FCC was correct in its conclusion.
    It is likely … that there may be a chilling effect if there were an enforceable right of access.

    Should there be an enforceable right of access to the media?

    The practical obstacles to the implementation of any general right of access to the media are almost insurmountable. …

    The internet, local or niche print publications and community television are available to disseminate many minority or unpopular viewpoints.
    [This provides a partial solution] to current dominance by the mainstream media of internet news and current affairs.
    (p 265)


    Why regulate?

    [There] are two main rationales for regulation:
    • to prevent or respond to market failure and
    • to pursue social and equity objectives. …

    Classic forms of market failure include:
    • Existence of a monopoly.
    • Public goods. …
      Anthony Ogus:
      [A] commodity the benefit of which is shared by the public as a whole or by some group within it [and …]
      • consumption by one person does not leave less for others to consume; and …
      • it is impossible or too costly for the supplier to exclude those who do not pay for the benefit.
      (Regulation: legal form and economic theory, Hart, 2004)
      Because of these characteristics, public goods will be under-produced without government intervention.
    (p 267)
    • Externalities: these arise when individuals or firms do not bear the cost of the consequences of their actions on others (negative externality), or do not gain a reward when their actions generate a benefit to others (positive externality).
      By not bearing the full cost of their actions individuals will tend to over-allocate resources to activities that produce negative externalities and under-allocate resources to activities producing positive externalities.
    • Information failure: this occurs when all participants in a market do not have access to all the available information or where one party to an exchange has more information than the other (asymmetric information).

    Social and equity objectives include seeking to reduce or manage the risk of harm to the health, safety or welfare of individuals or the community. …

    [Market] failure or a social goal [is] a necessary condition [but] not a sufficient condition for action.
    [It is also necessary] to demonstrate that the benefits [of any proposed intervention] outweigh the costs, including the costs of implementation.
    (p 268)

    Intervention is [only justified] if it leads to an overall improvement in social welfare. …

    In some cases, even where a problem is identified, a decision by the government not to intervene can lead to a better outcome for social welfare. ..

    It cannot be assumed that regulation will always be successful in achieving its objectives. …
    • regulators will always be imperfectly informed about relevant matters, and will often be less well-informed than the entities they regulate
    • regulatory processes involve bureaucratic costs
    • the regulatory process is potentially susceptible to interest group capture and political influence
    • where there are overlapping regulatory regimes, regulated entities will seek to exploit gaps in the jurisdictions of the different regulators and to move to the jurisdiction of the regulator they perceive to best reflect their interests [and]
    • [without adequate] resources, regulators will be unable to properly perform their function.
    (p 269)

    [Harold Demsetz highlighted three main regulatory fallacies:]
    • the ‘grass is always greener’ fallacy — the assumption that the government can improve on the market outcome
    • the ‘free lunch’ fallacy — failure to recognise that regulation is not costless, and
    • the ‘people could be different’ fallacy — failure to recognise that people will continue to respond to the underlying incentives, even where regulation is introduced.
    [His solution is a] ‘comparative institution approach’ [aimed at determining]
    which alternative real institutional arrangement seems best able to cope with the economic problem.
    (Information and Efficiency: Another Viewpoint, Journal of Law and Economics, Vol 12, 1969)

    Modes of regulation: governmental regulation vs self-regulation

    Regulation is [best] thought of as a spectrum from ‘pure’ self-regulation at one end to full governmental regulation at the other, with a variety of co-regulatory possibilities … in between.
    (p 270)

    In considering [the spectrum of regulation] there are several matters to be considered:
    • Who sets the rules or norms of behaviour?
    • Who oversees compliance with the rules?
    • What are the consequences for breach of the rules and how are they enforced?
    • Is participation in the regulatory regime required by law, or is it voluntary?
    (p 272)

    Co-regulatory mechanisms can include legislation that:
    • delegates the power to industry to regulate and enforce codes
    • enforces undertakings to comply with a code
    • prescribes a code as a regulation but the code only applies to those who subscribe to it (prescribed voluntary codes)
    • does not require a code but has a reserve power to make a code mandatory
    • requires industry to have a code and, in its absence, government will impose a code or standard, or
    • prescribes a code as a regulation to apply to all industry members (prescribed mandatory codes). …

    (Government regulation may also involve regulation by reward, rather than punishment, for example by financial incentives such as tax deductions.)
    (p 273)

    Advantages and disadvantages of different modes of regulation

    [Advantages] of governmental regulation …
    • [Is] generally better resourced that self-regulation.
    • [Involves] both compulsion and legal enforceability, thus offering a mechanism to deal with unwilling subjects …
    • [Has] universal coverage [and does not permit subjects] to opt out.
    • [Involves] democratic accountability coupled … with judicial oversight of the regulator.

    [Advantages] of self-regulation …
    • [Utilises] the knowledge and expertise of the regulated entities …
    • [Is] generally more flexible, adaptable and practical than governmental regulation …
    • [Imposes] a lower regulatory burden on the regulated entities …
    • [May] result in ‘ownership’ of the rules by the regulated entities and hence a greater commitment to those rules and a greater likelihood that a culture of compliance will develop
    • [The] cost of self-regulation is borne by the regulated entities rather than the state.
    • [Allows] the market to work without government interference.
    (p 274)

    [C}riticisms of self-regulation …
    {Self-regulation may …]
    • lead to collusion and anti-competitive conduct.
    • result in ‘regulatory capture’…
    • not meet … relevant objectives.
    • not be adequately funded.
    • not have effective systems of transparency and [accountability.]
    (p 275)

    Co-regulation has the advantage of permitting a degree of government control and oversight … while retaining a strong role for industry.
    However, co-regulatory entities may remain vulnerable to ‘industry capture’.
    (p 276)

    Designing a regulatory system

    • clearly-specified objectives
    • an organisational structure involving suitable personnel
    • adequate ongoing funding (and, where relevant, transparency of funding)
    • transparency and objectivity in decision-making processes
    • appropriate mechanisms for implementation or enforcement of decisions
    • visibility to the public, by promotion and explanation of its role and activities periodic reviews of its performance, and
    • appropriate accountability mechanisms.
    • Self-regulation allows the market to work without government interference.
    (p 276)
    Fiona Haines:
    [More] persuasive measures precede punitive approaches to non-compliance …
    [In] the majority of circumstances the intent of the regulated individual or organisation is honourable …
    [Most] want to comply most of the time.
    Enforcement strategies should capitalise on this [and not create unnecessary] defiance and counterproductive behaviour.
    (The Paradox of Regulation: What Regulation Can Achieve and What It Cannot, Edward Elgar Publishing, 2011, p 17)
    (p 277)

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