The battle between tech giants and struggling newspapers has been sidelined, for now

The battle pitting tech companies against struggling newspapers has been sidelined for the time being.  A bill by Assemblywoman Buffy Wicks demanding that digital sites compensate newspapers for using and linking to news articles, was put to rest by the deal between Google and Wicks.

But the controversy continues.

Much of the concern over the deal is advancing artificial intelligence as part of the compromise. There is another component that should also raise eyebrows. Color it red for tax money handed out as part of the deal while the state budget is in the red and red flags wave over news organizations’ role in holding government accountable.

Supporters of the deal in the journalism community say the $250 million, 5-year package designated for journalistic endeavors is a good first step, although short of the dollars needed. However, working journalists aren’t happy with the result. Particularly, there is a concern that the deal sends money to develop an Artificial Intelligence (AI) Accelerator program. Some journalists feel AI will eventually supplant reporters’ jobs.

Journalistic jobs have been wiped out and many newspapers have closed over the last couple of decades in great part because digital sites which link to newspaper articles have gobbled up much of the advertising revenue that used to keep news organizations afloat.

Faint praise to Google for a willingness to compromise but Google and other tech companies won the battle on several levels. Not only were they making a stink over the bill to force payments to newspapers which now goes away, but tech also had a wary eye on movements in the California legislature to hang regulations on the developing AI industry. Creating a public-private partnership with the state over AI could help influence those regulatory efforts.

The expensive campaign to squash the bill brought Assemblywoman Wicks to the negotiating table, but the money ponied up by the tech companies was less than expected.

The announced deal claims that $100 million would be furnished the first year. The state will put $30 million from next year’s budget into the fund and contribute $10 million in each of the next four years. Google will put millions more into the fund and to support other journalism efforts. The AI accelerator would also receive millions. The fund would be overseen by a non-profit board housed at UC Berkeley’s Graduate School of Journalism.

While the surprise AI aspect of the deal has generated most of the concerns, the idea of government funding news organizations that argue they hold government accountable raises red flags.

One has to ask; how much journalistic freedom might be restricted in covering government if government pays some of a journal’s bills? Will journalists bite the hand that feeds it? Even note the funding authority is at UC Berkeley, an institution that relies on the legislature for its budget.

Also consider that the deal comes while the California budget is billions in the red.

This is not the first debate over government funding news sites.  In fact, there’s been battles for decades on the Federal level of tax dollars paid to National Public Radio.

Let me state here that I believe tech companies should pay the news creators for content that benefit the companies. I argued previously on this page that creators should be rewarded and even pulled President George Washington into the debate, citing the fact that he signed the nation’s first copyright bill that supported the U.S. Constitution’s Intellectual Property Clause, guaranteeing writers and inventors exclusive rights to their writings and discoveries for a limited time. As I wrote, “The idea was to spread knowledge, which is what the news gathering organizations are all about.”

It would be cleaner to have Google and other digital platforms pay for the product created by the news organization which the digital platforms propose to use.

Facing intense and deep-pocket opposition Assemblywoman Wicks took the deal offered. She insists that more effort will be made to get additional money and protect journalism. A concern is that lawmakers may decide the problem has been dealt with and will not revisit additional efforts to have users of journalistic efforts pay for what they use.

In the meantime, watch out for budgets in the red and those red flags.

Joel Fox is an adjunct professor at Pepperdine University’s Graduate School of Public Policy. He served as president of the Howard Jarvis Taxpayers Association from 1986 through 1998.