subsidization – Techdirt (original) (raw)

Thanks To Crappy Cable Channel Bundles, Non-Watchers Hugely Subsidize Tucker Carlson And Fox News

from the fossilized-business-models dept

We’ve talked about the problem with bloated, expensive cable TV channel bundles for a long time. You might recall the push for “a la carte” TV channels (being able to buy cable TV channels individually) was even a pet project of the late John McCain, though his legislative efforts on that front never really went anywhere. And while the rise of streaming competition helped mitigate the problem somewhat, the tactic of forcing US cable TV consumers to buy massive bundles filled with channels they don’t watch remains a very real annoyance.

The latest case in point: many folks are realizing that the attempt to drive advertisers away from white supremacy apologists like Tucker Carlson aren’t really working, in part thanks to the traditional cable TV bundle. In short, because Fox News is included in most cable TV lineups, millions of Americans are throwing money at Fox News despite never watching the channel:

Lots of people asking about Tucker Carlson?s advertisers and, well, he doesn?t have any left. Like almost zero.

Fox News operates his show at a loss when it comes to ad revenue.

They pay for him through carriage fees, which we all pay into through our basic cable packages. https://t.co/yvwrcEGatO

— Sleeping Giants (@slpng_giants) April 21, 2021

I spent much of February talking to as many media scholars as I could for a piece trying to find a solution for the Fox News disinformation problem. The reality is there are very few policy proposals that wouldn’t run afoul of the First Amendment, especially with a rightward-lurching Supreme Court. One that might actually help work remains pushing actively to eliminate the bloated cable TV bundle:

“You?d kill those stations in a heartbeat if they didn?t get bundled in every cable package,? said Christopher Terry, assistant professor of media law at the University of Minnesota. ?All of those outlets thrive in the delivery to the audience they get by being included in every package, but in an a la carte cable package, only a handful of the true believer crowd would be willing to pay extra for them.”

?Imagine if they had to survive in an actual market-based scenario where the number of viewers they could have was limited by the people who would pay to have access to that specific content,? he added. ?You?d cut them off at the knees and use their own rhetoric to do so while making cable companies more accountable to the local customer base.”

Actually competing for attention, imagine that! Again, this was something that was supposed to be addressed by market forces via the streaming revolution, though many of the same failures in traditional cable simply wandered over to the streaming sector (not surprising since the same broadcasters and telecom giants dominated both arenas). And while streaming does provide greater choice, cable TV remains the dominant platform. As a result, Fox News still hauls in massive subsidies from a dated business model that involves tens of millions of Americans paying for a channel they never watch:

“Fox News makes $1.8 billion from the carriage fees it charges cable TV providers to include the channel in bloated, increasingly expensive cable TV bundles. But just 3 million of the nation?s 90 million cable TV subscribers actively watch the channel. In other words, 87 million Americans pay their cable company for and thus subsidize Fox News?despite rarely if ever actually watching the channel.”

“According to a survey conducted late last year, about 14% of cable TV subscribers watch Fox News regularly. But every cable TV subscriber pays an average of 1.72amonthtoreceiveFoxNews.Incontrast,311.72 a month to receive Fox News. In contrast, 31% of cable TV subscribers regularly watch FX (owned by Disney) but the channel adds just 1.72amonthtoreceiveFoxNews.Incontrast,310.81 to an average cable bill.

Judd Legum recently crunched the numbers further, showing how a lot of Fox News’ income comes utterly unearned, from people who may have zero interest in the racist tirades of a frozen TV dinner empire heir:

“According to a survey conducted late last year, about 14% of cable TV subscribers watch Fox News regularly. But every cable TV subscriber pays an average of 1.72amonthtoreceiveFoxNews.Incontrast,311.72 a month to receive Fox News. In contrast, 31% of cable TV subscribers regularly watch FX (owned by Disney) but the channel adds just 1.72amonthtoreceiveFoxNews.Incontrast,310.81 to an average cable bill.

This means, for every actual viewer, Fox News receives a 7.75subsidyfrompeoplewhoneverwatchFoxNews.Thisisahighersubsidythanothernon−sportschannels,likeFX(7.75 subsidy from people who never watch Fox News. This is a higher subsidy than other non-sports channels, like FX (7.75subsidyfrompeoplewhoneverwatchFoxNews.Thisisahighersubsidythanothernon−sportschannels,likeFX(1.79), CNN ($3.18), and TBS ($2.79), receive. And none of those channels regularly spreads white nationalist talking points to millions of viewers.”

But again, as John McCain showed, breaking this logjam is easier said than done. Maine, for example, recently tried to pass a law forcing cable giants to sell channels individually, but found itself quickly sued by Comcast, which claimed the law violated the company’s free speech rights (Comcast’s winning that battle so far). The cable and broadcast industry has lobbied relentlessly to ensure this shift to individual channels never happens, claiming that moving to an a la carte model would kill niche channels and raise consumer prices (both things that repeatedly happened anyway).

Granted this isn’t just about not liking the channel or disagreeing with the channels politics. There’s clear evidence, especially on the COVID front, that the bullshit pouring out of the Rupert Murdoch empire is actively harming human health:

“A media watchdog found over 250 cases of COVID-19 misinformation on Fox News in just one five-day period, and economists demonstrated that Fox News had a demonstrable impact on non-compliance with public health guidelines,? the lawmakers wrote.”

If you can’t rely on the wisdom of the courts, free market competition, or regulators to disrupt the Fox News disinformation parade, that leaves activists like Media Matters, which have increasingly been trying to target the problem with it’s Unfox My Cable Box campaign. But even if we’re to simply wait for the purely organic death of the traditional cable TV channel bundle at the hands of the streaming television and pissed consumers, it’s not entirely clear, based on the popularity of many bigoted influencers, that dangerous dipshittery won’t just find a new form to inhabit.

Bullshit is more profitable than truth under the engagement-driven, ad-based business models we’re building, and that’s simply a fact. Policies that change this reality won’t be easy to come by. The world’s top media policy experts are glacially pondering practical solutions to the toxic sludge of disinformation pouring out of the face of trolls like Tucker Carlson, but you may want to go read a book, because it’s gonna be a long wait.

Filed Under: bundles, cable bundles, fox news, subsidization, tucker carlson
Companies: news corp

Over At Politico, The AT&T Monopoly Gives Tips On Fixing A Broadband Problem It Spent Thirty Years Creating

from the do-as-we-say,-not-as-we-do dept

Mon, Sep 14th 2020 06:31am - Karl Bode

Every time legislation is looming that could threaten its broadband monopoly, AT&T attempts to get in front of it and steer the conversation away from subjects it doesn’t want tackled by legislation. The biggest of those subjects is the lack of overall competition caused by sector monopolization, and the high prices, crappy customer service, and patchy availability that usually results. With COVID-19 resulting in folks realizing the importance of affordable broadband more than ever, it’s becoming pretty clear that AT&T is worried somebody might just try to finally do something about it.

You’d be hard pressed to find a company more responsible for this country’s broadband shortcomings than AT&T, whose lobbyists work tirelessly to scuttle absolutely any attempt whatsoever to disrupt the mono/duopoly status quo. Which is why it’s ironic to see AT&T CFO John Stankey publish an op-ed at Politico professing to have the cure for America’s longstanding digital divide. Not too surprisingly, AT&T’s solution for the problem is greater subsidization of companies like AT&T, a company that has already received countless billions in subsidies for fiber networks it almost always only partially deploys.

Amusingly, most of Stankey’s fixes are things AT&T has routinely lobbied against. Like here, where Stankey acknowledges that fixing the digital divide isn’t something private industry can do alone:

“Our country needs to close that gap, and now is the time for legislators and policymakers to act to ensure the educational and economic success of all Americans by making broadband connectivity more accessible, affordable and sustainable. Market forces and private companies can?t do it alone because of the lack of return on the significant investment necessary to reach all Americans.”

Well gosh, perhaps AT&T shouldn’t have lobbied for (and in many instances written) legislation in nearly two-dozen states blocking towns and cities from building their own creative broadband alternatives then, huh? AT&T lobbyists have long fought tooth and nail against public or even public/private alternatives because, as a monopoly, it simply doesn’t like competition. Any suggestion AT&T has credibility on this subject is laughable.

From there, AT&T goes on to support another idea its lobbyists have routinely opposed: better broadband maps:

“To close the digital divide, we must know the contours of where the divide starts and ends. We need to telescope our broadband maps from the macro, census-block level to the micro, building level to understand with more precision where broadband is unavailable. The government?s existing mapping methodology is past its shelf life.”

Here too, AT&T has lobbied against better, more accurate broadband maps (or the inclusion of broadband pricing in said maps) because it doesn’t want people highlighting the lack of competition and coverage gaps in the sector. And while some broadband mapping improvements have finally been passed after relentless pressure from states looking for their cut of the pie, AT&T has lobbied to exclude technologies like 5G from those improvements.

Stankey also takes some time to pretend that deploying fiber isn’t “economical,” despite his company receiving untold billions in tax breaks, subsidies, and regulatory favors to deploy fiber networks that mysteriously, routinely, wind up only partially deployed:

“The FCC currently heavily weights subsidies toward gigabit speeds (fiber) over other technologies (such as fixed wireless). It is simply not practical or responsible to assume a fiber broadband service can be delivered to every unserved rural household?the prohibitive cost is part of why connecting many of these households has been uneconomical.”

This one’s a real laugher if you know AT&T’s history. For the better part of the last generation AT&T has received a fountain of taxpayer cash in exchange for fiber it never fully deploys. AT&T spent much of the aughts under-investing in fiber despite rampant deregulation that was supposed to incentivize it to do so. It just received a $42 billion tax cut from the Trump administration that resulted in more than 41,000 layoffs and a $3 billion CAPEX reduction for 2020. AT&T’s running a 30-year con in which it takes taxpayer dollars, pockets the lion’s share of it, under-deploys broadband, then tries to obfuscate the results.

AT&T just spent $150 billion on an array of terrible mergers that saddled the company in an ocean of debt and resulted in customers leaving in droves. Between tax breaks, subsidies, and the gutting of FCC consumer protections like net neutrality and privacy, it’s almost impossible to calculate the amount of taxpayer assistance AT&T has received in the last decade alone. In fact, the only reason Stankey is even CEO is because the last CEO got driven out of town for wasting money on misguided ideas. Yet here we have AT&T giving advice on what is or isn’t “cost prohibitive.”

What’s AT&T and Stankey really up to here? With stories in the press about kids having to squat outside of Taco Bell just to get online for class, AT&T’s policy guys know we’re likely to see new legislation in the next year to help bridge the digital divide. AT&T would prefer that legislation fixate on throwing billions in additional subsidies at monopolies like AT&T, instead of tackling the real cause of U.S. broadband mediocrity: rampant state and federal corruption, or the monopolization that results from timid policymakers fecklessly bending the policy knee to monopolistic telecom giants for the better part of a generation.

Filed Under: broadband maps, community broadband, competition, digital divide, john stankey, lobbying, op-ed, subsidization
Companies: at&t