Cable Regulations are Key to De-amplifying Disinformation

Dominion and Smartmatic brought billion-dollar lawsuits against Fox News leading the cable network to rollback — though not eliminate — disinformation, most notably in the firing of long-time host Lou Dobbs. This, however, may be a short-term solution to a long-term problem.

Facebook, Twitter, and YouTube have borne the brunt of criticism connected to the continuing spread of misinformation, and rightly so. They waited far too long to de-platform conspiracy theorists, and almost immediately after they removed the former president and QAnon promoters misinformation dropped by 73%.

What we also know is that racist ideas gained legitimacy through amplification via cable news outlets, initially Fox News and then OAN and Newsmax.

The public has been at a loss as to what to do about reigning in dis- and mis-information. When cries go out against Fox News, for example, people rally around attacking marketers whose advertising dollars provide financial support to the network. Thirty years ago and in a mostly broadcast-dominant environment that might have worked. Not today.

Cable networks have a dual revenue stream: advertising monies and fees from cable operators, the latter of which can be substantial. Contractually guaranteed carriage fees enable cable networks to weather a downturn in the economy when advertising budgets are squeezed or when consumers cry for boycotts. Cable fees can range from $10 or more for sports channels to less than a dollar a month, which is the case for the vast majority of networks. Fox receives on average $2 per month per subscriber. There are 82.9 million subscribers in the United States and most cable operators carry Fox News. Doing the math, we can estimate that Fox News makes approximately $2 billion per year guaranteed just from this property — and that’s without advertising revenue. This is a key reason why Rupert Murdoch kept the channel while spinning off the more glamourous 21st Century Fox film and entertainment division in 2019.

So if advertising boycotts don’t work and cable consumers are unwittingly subsidizing anti-democratic programming, what can be done? De-bundle cable contracts.

Regulations stemming from the Cable Television Act of 1992 led cable companies to sell cable programming as multi-network packages. In a time of limited cable channels and the institution of retransmission consent, that made sense. It no longer does. Congress could require that channels be sold to local cable systems as individual entities. This, in turn, would allow for a la carte cable.

The way a la carte cable works is this: instead of having a set option of hundreds of cable networks, consumers would be allowed to select programming a la carte — like on a restaurant menu. If people don’t watch MTV, fine. Don’t include it in the package of channels you select to be sent to your home. If people won’t ever watch Fox News, don’t check the box. In short, consumers pay only for what they want and could reduce the price of their cable bill in the process. It also effectively regulates Fox and OAN (and Newsmax and RT: Russia Today) content by muffling their megaphones and reducing revenues. Instead of boycotting advertisers which makes a minor dent in revenues, viewers opt out of misinformation content and stop passively supporting it to the tune of billions of dollars.

Cable networks have long decried a la carte, and it is easy to see why. If you are a small cable network — say, the Golf Channel — and you depend on carriage fees for revenue, it is very likely that income will drop significantly when millions of people are no longer forced to contribute to your bottom line. The same will hold true for other networks who are particularly niche, like Fox News and, to be fair, MSNBC and CNN.

To be sure, some people will cry First Amendment. But this is not a First Amendment issue, especially when there are multiple ways for producers to distribute their content. They can continue to be on cable systems, they can push videos to YouTube, and they already distribute content through over-the-top (OTT) options such as apps on Apple TV or Roku.

Allowing consumers to decide what they want to pay for is not the only reason to re-examine a la carte. Cord cutting continues apace. Gen Z is growing up without cable television and has no motivation to adopt this form of media transmission. With significant unemployment and a ravaged economy, people will be looking for ways to cut back spending. We are already seeing smaller channels being shuttered, and more will likely follow. If there was ever a time for cable operators to reassess their business, this is it.

Unlike cable, social media spaces are mostly unregulated. Regulating digital media will be complex because it is new territory. However, even now Facebook and Google are facing anti-trust suits from the Department of Justice. While the Biden Administration is cleaning house and the new Congress and FCC have made media regulation an important agenda item, regulators would do well to look at the whole media landscape and not just the issues related to the digital.

I worked in marketing at NBC, MTV and at major ad agencies. My books include Black Ops Advertising and Compassion, Inc, among others. More at maraeinstein.com

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