Ok, that's a "tired light" theory. It fails because that process just changes the frequency of photons, but not their density in space. The background radiation is (to extreme accuracy) blackbody radiation. Blackbody radiation has a spectrum, and an intensity, dictated by physics. The expansion of space preserves both aspects of "black bodiness"; tired light does not.
Tired light also doesn't explain the observed stretching in time of supernova light curves with distance.
Tired light also doesn't explain the observed stretching in time of supernova light curves with distance.
Ned Wright explains this at his web site:
https://www.astro.ucla.edu/~wright/tiredlit.htm