Arizona Eagletarian

Arizona Eagletarian

Saturday, February 15, 2014

Dragging newspapers kicking and screaming into the 21rst Century? UPDATED 2:00am MST 2-16-14

On Thursday, the House Technology and Infrastructure Committee heard HB2554, which, unless it's derailed by special interests -- newspapers threatening lawmakers -- will make a significant step toward bringing Arizona law and state government into the 21rst Century.

In the hearing, a video of which is available here, an attorney representing the Arizona Newspaper Association, one representing the Arizona Capitol Times and a couple of other lobbyists mentioned several dog-whistle code words, without making any coherent argument.

Those lobbyists FAILED to make any claim -- that the generally at least $100.00 in fees businesses must pay to newspapers -- provides ANY value added to either the business required to publish OR to the public.

Chew on that one for a few minutes. It is the crux of the entire concept of enhancing technological efficacy of Arizona government.

Here's what John Moody, lobbyist for the Arizona Newspapers Association brought up in his testimony before the TI committee:

  • This bill looks for a solution to a problem that does not exist
  • There IS an existing database that is handled by the private sector (ANA)
  • There is no reason to take it away from the private sector and eliminate private jobs
  • When you look at how the system works now, you'll see this bill is not necessary
  • Moody said it's been done this way (requiring corporate notices to be published in newspapers) since before statehood (which was 102 years ago)
  • Jobs will be lost and smaller newspapers may go out of business because of this
  • "We are of the opinion that everything done by the private sector is done more cost effectively and done more efficiently than if done by government."

The claim that "it's been done this way" for more than a century should -- at this stage in telecommunications technology development -- be a RED FLAG on its own to say it's time to reevaluate the current systems and procedures.

Claims and arguments that bills like this look for a solution to a problem that does not exist is the classic psychological defense mechanism known as denial. Because the newspapers do not know how to cope with the disruptive innovation known as the INTERNET, they both refuse to acknowledge the challenges they face AND try to convince others that the problems don't exist. On its face, such claims are overwhelmingly absurd.

Claims that there is an existing database administered by private sector Arizona Newspapers Association go directly to the question of WHO OWNS the public data. If that database "goes down" or becomes inoperative for any period of time, who do we call to demand the service be restored?

As if the ANA were an Italian mother laying a guilt trip on the legislature, you don't want to eliminate JOBS do you? The problem with that is that nixing this bill STIFLES job CREATION (innovation). Harvard Business School Professor Rosabeth Moss Kanter has written that invoking history (it's been done this way for more than a century) is a surefire way to stifle innovation.

"Jobs will be lost." Well, we've been over the subject of Disruptive Innovation extensively. I simply refer you back to posts from last fall on this subject.

"We are of the opinion that everything done by the private sector is done more cost effectively and done more efficiently than if done by government." Of course, "we are of the opinion" kinda sorta takes that claim out of the realm of being an argument. The ANA is certainly entitled to its opinion. But it's not entitled to its own facts.

Discussion during Moody's testimony made it clear that the fact is for businesses required to publish notices of incorporation (or related changes), NO CHARGE is a LOT more cost effective than the alternative. Which is that currently, those business start ups are forced to subsidize a dying newspaper industry business that provides ZERO added value to the public or to the business required to pay the fee, usually about $100 (for three consecutive publication dates).

One member of the Technology and Infrastructure committee raised a number of questions and cast the lone dissenting vote. That member expressed concern for the people who are only served by newspapers in rural Arizona and do not know how to use a computer.

To that member, I would strongly suggest that the people she claims to have given voice to in this debate are very likely NOT at all interested in corporate notices. Instead, the overarching issue and the underlying concern (for those who read between the lines) may be that perhaps this member was concerned more with how rural newspapers that serve the district she represents would portray her to their readers.

IF that's the case, her position would be more or less parallel to that of Arizona Public Service and how that investor owned utility dug its heels in to resist the inevitable disruptive innovation it faces. Newspapers are dying because they struggle to adapt their business model to technological innovation. It is very much contrary to the public interest to use government to protect entrenched special interests that refuse to adapt.

Have you ever heard the expression, "government should not be in the business of picking winners and losers?" Protecting the forced subsidy of an industry that resists adapting to disruptive innovation would be to try to keep losers from the inevitable... which is only inevitable if they don't find a way to adapt.

This state representative's obligation (and that of every other Democratic and Republican state lawmaker) is NOT to capitulate to the newspaper industry, but to sell THEM on the concept of adapting to disruptive innovation.

The bottom line in this entire debate goes directly back to the question raised at the beginning of my prior blog post on this subject,
To whom does the information and data compiled by Arizona government agencies belong?
Does this information belong to the Arizona Newspaper Association and the Arizona Capitol Times, or does it belong to the people of Arizona? What do the people of Arizona owe to ANA or the Capitol Times if those for profit organizations can no longer add value to the public regarding corporate notices?


Though I posted a link to my previous (related) blog post that explains more about what HB2554 does, here's language from a House fact sheet/summary of the bill,
Requires the Commission to establish and maintain a database for documents filed pursuant to statute.
·          Directs the Commission to post the database on its website to allow the public to search for business information, including an entity’s name, approval date and county of the known place of business.
·          Stipulates that the information must be maintained in the database for least 90 days.
·          Allows the Commission, in order to maintain the database, to determine the amount and charge a nonrefundable fee to the entity whose information is entered into the database.
·          Requires all monies received to be deposited in the Fund.
·          Removes the requirement for the business entity to publish a copy of required filings and to provide with Commission with an optional affidavit evidencing the publication.
Ø  Strikes the 60 day deadline for the business entity to publish these documents upon approval.
·          Directs the Commission to input information into the database regarding the approval of required filings by corporations and LLCs within five business days of approval.
Ø  For corporations, the following documents will in input into the database in lieu of publication: articles of incorporation, articles of domestication, articles of amendment, articles of restatement, articles of merger or share exchange, articles of dissolution, application for authority to transact business, application for withdrawal, application for certificate of authority and articles of merger or membership exchange.
Ø  For LLCs, the following documents will be input into the database in lieu of publication: articles of amendment, articles of organization, restated articles of organization and articles of merger or consolidation.

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