Debunking A Fox News Related Meme

I'm no fan of Fox News. It is one of the most culpable players in one of the most seriously vulnerabilities in our democracy today. I have little doubt that it is a leading contributor to making the United States more stupid and hateful, although intervening legally to stop it in a way that respects legitimate free speech is a delicate matter. 

But I'm also not a fan of inaccurate information circulated as if it were true. 

The following meme about Fox News has been making its way around social media:

This meme is rather misleading.

What Does The FCC Regulate?

There is no such thing as an FCC entertainment or news license - the FCC issues content neutral TV broadcast licenses. The FCC could revoke some or all of the Fox Corporation's TV broadcast licenses, although First Amendment considerations limit the extent to which this can be based upon the content it delivers via Fox News.  As the FCC explains at the link above:

The First Amendment and the Communications Act expressly prohibit the Commission from censoring broadcast matter. Our role in overseeing program content is very limited. We license only individual broadcast stations. We do not license TV or radio networks (such as CBS, NBC, ABC or Fox) or other organizations that stations have relationships with, such as PBS or NPR, except if those entities are also station licensees. In general, we also do not regulate information provided over the Internet, nor do we intervene in private disputes involving broadcast stations or their licensees. Instead, we usually defer to the parties, courts, or other agencies to resolve these disputes.

The same source continues by discussing the factors considering in whether to renew a broadcast license (emphasis added)

Stations must renew their licenses before they expire. . . . Before we can renew a station’s license, we must first determine whether, during the preceding license term, the licensee has served the public interest, has not committed any serious violations of the Communications Act or the FCC’s rules, and has not committed other violations which, taken together, would constitute a pattern of abuse. To assist us in this evaluative process, a station licensee must file a renewal application (FCC Form 303-S), to tell us whether: 

• It has sent us certain required reports;
• It or its owners have, or have had, any interest in a broadcast application in an FCC proceeding in which character issues were resolved adversely to the applicant or were left unresolved, or were raised in connection with a pending application;
• Its ownership is consistent with the Communications Act’s restrictions on licensees;
• Interests are held by foreign governments, foreign corporations, and non-U.S. citizens;
• There has been an adverse finding or adverse final action against it or its owners by a court or administrative body in a civil or criminal proceeding involving a felony, mass media-related antitrust or unfair competition law, the making of fraudulent statements to a governmental unit, or discrimination;
• There were any adjudicated violations of the Communications Act or the Commission’s rules during the current license term;
• The licensee or its owners have been denied federal benefit due to drug law violations;
• Its station operation complies with the Commission’s radiofrequency (RF) radio exposure standards;
• It has placed and maintained certain specified materials in its public inspection file in a timely manner;
• It has discontinued station operations for more than 12 consecutive months during the preceding license term and is currently broadcasting programming;
• It has adhered to its minimum operating schedule;
• Its advertising sales agreements discriminate on the basis of race or ethnicity and whether all such agreements held by the licensee contain nondiscrimination clauses;
• It has filed Form 396, Broadcast Equal Employment Opportunity Program Report; and
• In the case of an application for renewal of a television license, the station has complied with the limitations on commercial matter aired during children’s programming and filed the necessary Children’s Television Programming Reports (FCC Form 2100, Schedule H). . . . 

[T]here are two issues related to broadcast journalism that are subject to Commission regulation: hoaxes and news distortion.

Hoaxes. The broadcast by a station of false information concerning a crime or catastrophe violates the FCC's rules if: 

• The station licensee knew that the information was false;
• Broadcasting the false information directly causes substantial public harm; and
• It was foreseeable that broadcasting the false information would cause such harm.

In this context, a “crime” is an act or omission that makes the offender subject to criminal punishment by law, and a “catastrophe” is a disaster or an imminent disaster involving violent or sudden events affecting the public. The broadcast must cause direct and actual damage to property or to the health or safety of the general public, or diversion of law enforcement or other public health and safety authorities from their duties, and the public harm must begin immediately. If a station airs a disclaimer before the broadcast that clearly characterizes the program as fiction and the disclaimer is presented in a reasonable manner under the circumstances, the program is presumed not to pose foreseeable public harm.

News Distortion. The Commission often receives complaints concerning broadcast journalism, such as allegations that stations have aired inaccurate or one-sided news reports or comments, covered stories inadequately, or overly dramatized the events that they cover. For the reasons noted previously, the Commission generally will not intervene in these cases because it would be inconsistent with the First Amendment to replace the journalistic judgment of licensees with our own. However, as public trustees, broadcast licensees may not intentionally distort the news. The FCC has stated that “rigging or slanting the news is a most heinous act against the public interest.” The Commission will investigate a station for news distortion if it receives documented evidence of rigging or slanting, such as testimony or other documentation, from individuals with direct personal knowledge that a licensee or its management engaged in the intentional falsification of the news. Of particular concern would be evidence of the direction to employees from station management to falsify the news. However, absent such a compelling showing, the Commission will not intervene.

There is a very credible argument that Fox News fails to meet even this minimal standard for news distortion. 

The Role Of Defamation Litigation

The U.S. Supreme Court has drawn very clear lines over when news providers can and cannot be sued for defamation. It is a strict, but not absolute or impossible to surmount, standard.

The $1.6 billion Dominion voting systems defamation lawsuit (which seeks damages equal to about 14% of the Fox Corporation's market value and an even greater percentage of the Fox Corporation's news assets) that is now pending in the courts is a much more direct way to punish Fox News for its fraudulent and destructive content marketed as news. This approach is likely to be effective even though the Fox Corporation has tried to take the position for purposes of litigation that Fox News is merely an entertainment product that has no legal obligation to concern itself with the truth of its content. This litigation position is behind the "entertainment" versus "news" distinction that the meme makes but mangles.

Circling back to the FCC role, the Dominion defamation lawsuit and similar defamation lawsuits, could also provide the foundation of otherwise private internal information about the practices of Fox News necessary to support news distortion based action directed at the broadcast licenses of Fox TV stations.

The Fox Corporation Divested Itself Of Its Entertainment Assets Almost Four Years Ago

It is important to note, furthermore, that the Fox branded entertainment assets are owned by Disney. Fox News and Fox Sports are owned by Rupert Murdoch's Fox Corporation (his family owns 39% of Fox Corporation which is sufficient to provide de facto control of the corporation, while the Murdoch family has no significant ownership interest in Disney). A mish-mash of other assets, including some of the sports assets that could be easily segregated from the news assets, were sold to third-parties other than Disney (in which the Murdoch family also lacks significant interests). These media assets share nothing more than a residual brand name at this point. 

Fox Corporation is much smaller than Fox's entertainment assets - the Disney assets acquired were sold for $71.3 billion at closing, and is probably worth significantly more today, while the market valuation of the Fox Corporation is about $11.4 billion today.

This split up deal was done on March 20, 2019, almost four years ago and prior, for example, to the events giving rise to the Dominion defamation lawsuit. 

The deal made economic sense mostly because it removed much of the the non-toxic, non-MAGA assets of the company from the taint of the assets and programming that is rightfully so despised (the non-toxic sports assets were impracticable to segregate from the toxic news assets because they were so intertwined). 

Private Sector Options To Restrain Fox News

It wouldn't be terribly difficult for a politically motivated group of investors (perhaps including Dominion using its defamation verdict or settlement to pay for some or all of its stake) to buy enough of Fox Corporation to meaningfully rein in the misconduct of Fox News, while mitigating the cost of doing so by selling some of the remaining sports media assets the remain in the company, which still account for a significant share of Fox Corporation's market value.