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Bill Britt: Newspapers: State Sanctioned Monopolies

By Bill Britt
Alabama Political Reporter

For years select newspapers in Alabama have enjoyed what many have referred to as state-sanctioned monopoly. This is because only certain newspaper are allowed to print “legal notices.” Meaning that only newspapers within a county that meet certain federal and state standards are permitted to print state and local public notices.

These notices included, but are not restricted to, foreclosures, local and state ordinances and laws, adoptions, probating of wills and more. Each public notice must be printed only in a newspaper that is published in that county. The newspapers that have such authority have enjoyed tremendous profits over the years because a flaw in the Alabama law.

City, county and the state government, by law, must advertise their legal notices in these newspapers. The government has no choice and the papers can make millions because they are a monopoly.

To meet the rigorous standards of this Alabama law a “start-up,” newspaper would have to spend tens and perhaps hundreds of thousands of dollar just to acquire the second-class permit and publish for the required 51 weeks before ever having a chance to compete for the legal notice business.

Mayors, probate judges, county and state officials have pleaded with the legislators to end this state-sponsored robbery. It cost our state and local government tens of millions of dollars because they have to pay these newspapers whatever they demand of the government. Without competition, the newspaper can charge whatever they want to the government and they must pay because it’s the law.

Most news publication around the state have had their postal permits for 50 years or more, giving that newspaper a virtual monopoly of legal publications. Take one example in St. Clair County, ‘The St. Clair News-Aegis’ (which is owned by the Retirement Systems of Alabama) is just one of such papers in the 67 counties of Alabama.

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‘The St. Clair News Aegis’ is a newspaper that has had the right to publish legal notices for over 100 years. Perhaps as much as 60 percent of the publications revenue comes from its publication of legal notices.

By being the only newspaper in St. Clair County that has a state-given right to publish legal notifications this means that all city and county governments are force to purchase space in these papers by law. This also means that the newspaper can charge whatever it wants from the government for these publications because there is no competition. This is not to say that the St. Clair paper charges an unfair fee it just means it can charge whatever it wills.

However, it would be presumptuous and naive to think that there are not newspapers that do abuse their monopoly status.

For years the Alabama Legislature has seen one bill after another designed to put an end to such monopolies but these efforts have always met with failure.

With the rise on the Internet the case is being made that county and city governments as well as others who must run legal notices have an option to publish them on the Internet.

This has also been faced with tough opposition from the newspapers and the Alabama Press Association (APA).  While millions of dollars are made by newspapers with virtually no competition, the legislature has been held captive by cronyism on behalf of politicians with close ties to their local newspapers as well as editorial threats have been made toward politicians covertly and overtly.

It has been thought that the new Republican Majority in the government might put an end to this government-authorized monopoly.

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Silly as it might seem, many newspapers have made the suggestion that putting the legal notices up for competition was simply retribution by Republicans against left-leaning news organizations.

In the past, very few politicians have had the courage to take on the editorial wrath of their local newspaper.

Sources within the next legislative agenda have emphatically stated that in this coming session there will be a bill passed that will allow legal notices to be published in local newspaper or on the Internet. However, the APA has said that this is not the case and that they have negotiated a better deal with powers within the government to maintain their state-sponsored monopoly.

The question arises, “ Is this good policy or convenient politics?

If this is true, the monopoly will continue punishing city and county governments while rewarding the publishers within these counties.

It is time for the Alabama Legislature to come into the 21st century. The Internet is everywhere and competition is the way our system works best.  It is known that at least one high-ranking legislator is co-owner of a prosperous newspaper that’s mainstay of income is legal notices.

It is known that the Retirement Systems of Alabama, RSA is heavily invested in small local papers in Alabama that live off legal notices. Is there a correlation or simply coincident?

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Newspaper are a cherished and necessary part of insuring freedom and liberty in Alabama. Each newspaper is need as a voice within the community. It does not, however, mean it deserves to have a monopoly on government commerce.

It is time to end the government sponsored monopolies of all kinds starting with newspapers.

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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