Mark Cuban Again Illustrates He Has No Idea What Net Neutrality Is Or Why It's Important

from the words-are-but-wind dept

To be very clear, there are some subjects Mark Cuban has a very good understanding of, ranging from his support of patent reform and his helpful goal of improving antiquated film release windows to highlighting the SEC's disdain for the 14th and 4th Amendments during his fight over insider trading allegations. That said, for some reason when the Dallas Mavericks owner begins talking about telecom, Internet video and net neutrality, a string of cryptic gibberish begins to spill forth from his head that's entirely detached from the cogent, mortal plane.

As the boss of HDNet (now AXS TV), Cuban spent years crying and wailing about the rise of Internet video. He frequently attacked companies offering content for free, insisted that Hulu viewers "leech off the money we pay to enjoy tv," waged a bizarre, unsuccessful one man war against "illegal" YouTube, and told anybody who would listen that Internet video was destined to failure. That mindset fueled his position on net neutrality, one that largely mirrors that of the cable and broadcast industry at large (read: everything is fine and we need no rules). Cuban even at one time urged ISPs to go ahead and block P2P entirely (legitimate uses be damned).

Spurred by the recent Title II debate, Cuban has emerged once again to share his neutrality insights on Twitter, where he recently floated the increasingly stale idea that supporting a neutral Internet is a government assault on on the Utopian miracle that is the telecom free market:
Cuban also offered up a Q&A session with the Washington Post because, Post writer Nancy Scola informs us, "there's nothing that Cuban dislikes more than untested conventional wisdom" (aka the need for net neutrality rules). Most of us by now know the U.S. broadband market isn't free or functional -- it's a broken duopoly, slathered in a layer of regulatory capture, preying on a captive audience incapable of voting with their wallets. Cuban's refusal to acknowledge this reality is on stark display throughout the Q&A:
"If it ain't broke, don't fix it. The Verizon decision [the January, 2014, court order that struck down the Federal Communication Commission's 2010 passage of net neutrality rules] has created an opportunity for the FCC to introduce more rule-making. They shouldn't. Things have worked well. There is no better platform in the world to start a new business than the Internet in the United States."
Except innovation is being threatened precisely because the U.S. broadband market is indisputably broken. Companies like Verizon and AT&T have abused the fact they dominate 85% of the wireless retail market for years, whether it's the blocking of handset GPS radio functionality to push their own GPS apps, the blocking of Google Wallet to help adoption of their own mobile payment platforms, or the blocking of Facetime to push users toward metered data plans. On the fixed-line side you've got residential ISPs who've also been abusing the lack of competition to impose entirely unnecessary usage caps to hinder Internet video use and protect TV revenues.

As we've noted for many years now, these very real, very clear anti-competitive behaviors are a symptom of the broader disease that is a lack of competition. While there's certainly a conversation to be had about the perils of government over-reach if rules aren't done correctly, if you're still somehow arguing that the U.S. broadband industry is a healthy, functioning free market, you're simply not credible on the subjects of net neutrality or telecom.

We've noted how Title II with forbearance is the best tool we have in light of this lack of competition to keep the Internet healthy and consumers protected. To defend their government-pampered fiefdoms from any attempt to change the status quo, incumbent ISPs have falsely claimed that Title II "bans fast lanes" or "stifles investment," both of which are demonstrably not true. Yet Cuban buys this argument without question:
"I want certain medical apps that need the Internet to be able to get the bandwidth they need. There will be apps that doctors will carry on 5G networks that allow them to get live video from accident scenes and provide guidance. There will be machine vision apps that usage huge amounts of bandwidth. I want them to have fast lanes."
That protecting net neutrality will break grandma's pacemaker is a favorite talking point of the telecom industry, even though none of the proposed rules would hinder things like prioritized machine to machine connectivity, and the FCC's simply never going to ban intelligent network management. You'll recall that one of Verizon's greasier arguments of late has been that net neutrality rules will harm the deaf. Amusingly the majority of deaf and disabled groups not only don't agree (apparently AT&T hasn't gotten around to paying them yet), the majority of deaf and disabled groups support Title II. For someone who claims to hate "conventional wisdom" and professes loving questioning things so much, Cuban seems quick to buy Verizon's line of nonsense.

In one of the more amusing exchanges, Cuban proceeds to insist that because none of the entrepreneurs he speaks to bring up net neutrality in meetings, net neutrality as a concept must not be very important to the broader Internet:
"I have yet to talk to a single entrepreneur, or investment I have, or potential investment I have, or [seen an] acquisition or sale of a company on the Internet where the issue of net neutrality has come up. No one starting a business even considers net neutrality in their business, except for those that are religious about it and ISPs and networks that have to deal with any uncertainty it introduces."
This couldn't possibly be explained by the fact that entrepreneurs or potential deal partners sitting in Mark Cuban's office have done their research, know Cuban loathes net neutrality, and therefore don't mention it because they want his money right?

The Mavs owner then proceeds to brush aside concerns over programs like AT&T's Sponsored Data, which involves companies paying AT&T for the privilege of bypassing arbitrary user caps. That, as VC Fred Wilson eloquently pointed out, sets a dangerous precedent in that it lets deeper-pocketed companies buy an advantage over the same smaller entrepreneurs Cuban professes to love. T-Mobile's Music Freedom plan sets a similarly bad precedent for small businesses and entrepreneurs. Yet like so many people who don't actually understand net neutrality (including the FCC), Cuban thinks these kinds of arbitrarily-erected monetization efforts are cute and creative business models:
"It's a business decision that has as a much chance to fail as work. If you don't like the offering from T-Mobile you may go somewhere else. Or if you like the offering, you may switch to T-Mobile. If T-Mobile came to me and asked me if I wanted to subsidize their consumers getting [Dallas] Mavs games streamed live over their phones or to mobile home routers, without impacting their data caps, I would love it, if the price was right, and would do it in a heartbeat."
Of course Cuban has already made his fortune. Were we to take 1995 Mark Cuban (who was busy building and transplant his business into the modern era under AT&T, Verizon and Comcast -- you can be damn sure he'd be taking a very different approach to these issues. Cuban has spent a decade making it abundantly clear he doesn't understand net neutrality, the telecom market or the potential pitfalls of these new cap exempt business models. Perhaps we should put Mark Cuban, Donald Trump and all the rest of the billionaires with plenty to say but little actual understanding in charge of the telecom industry. At least we'd get some entertainment value out of the equation while the Internet burns.

Filed Under: broadband, fast lanes, mark cuban, net neutrality, open internet, regulations

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  1. icon
    mcuban (profile), 26 Nov 2014 @ 12:55pm

    Re: Re: Re: Re:

    You:For the record, we're talking about this 2009 blog post (not exactly ancient history), in which you declare:
    "The Great Internet Video Lie is that the internet opens distribution to compete with the evil gate keepers, cable and satellite...If you have dreams of competing with traditional TV network viewing numbers using the internet, dream on.
    Netflix launched streaming in 2007, two years before your post. They now have 50 million subscribers. The cable industry lost another net 150,000 customers last quarter, and DirecTV saw their first third quarter loss in the company's history during Q3. You were wrong. Sure, there were teething issues for live simultaneous streams in 2009, but that's increasingly becoming less of an issue (LTE multicast, MLB On Roku, DirecTV's Sunday Ticket broadband delivery, etc.). A history of network engineering should have made that clear that these kinds of obstacles were temporary, even WAY BACK in 2009. I'd have to ask: what do you think about Internet video's potential to compete today on the eve of live streaming service launches from Dish, Verizon, Sony, HBO, and Showtime?

    Me: Again, my blog was in reference to individuals, their ability to make money and scale .

    The part you left out "
    Internet Video. Its the salvation for content creators everywhere. Its the end to dependence on the big bad meanies, the cable and satellite companies. Right ? Hell no. The concept that “over the top” video creates a valid business alternative for content creators is as misguided an internet business myth as there is.

    what content was netflix creating in 2007 ?
    And 8mm people watched a single streamed event and that was deemed an engineering marvel. But tell me how any individual can afford to stream to 2mm or 3mm ?

    Comcast throttling all upstream P2P traffic indiscriminately (which you agreed with and encouraged), Verizon Wireless blocking handset GPS so people had to use their own GPS software, Verizon Wireless blocking Blutooth so people had to use Verizon's software, Verizon and AT&T blocking Google Wallet so people would use their payment platform, AT&T blocking Facetime so people had to pay more for data, ISPs using DNS direction to embed unwanted advertisements, ISPs using DNS direction to redirect users who mistype URLs to their own advertising pages, ISPs using usage caps on uncongested networks to hinder Internet video, Verizon sticking the Nexus 7 tablet in development purgatory while they pushed their own tablet, Madison River blocking VoIP in 2005, AT&T getting Apple to block Skype from 2007-2009, Verizon's decision to cripple tethering functionality on handsets so users had to pay a premium fee, AT&T's Sponsored Data and T-Mobile's Music Unlimited, which discriminate against smaller companies, MetroPCS blocking all streaming video in 2011...

    Me: comcast got slapped down by the FCC. Im not a bit torrent fan. But that doesnt matter it will die on its own

    Most of the examples of throttling go back years when bandwidth, in particular mobile broadband was more constrained . Exception being tethering, which hwile i would love to see tethering uncapped, its obvious why its not. Mobile broadband is a shared medium.

    Discrimination against smaller companies is a fact. Everyone discriminates against companies with whom they dont see a big enough business benefit. Tmobile has 27 streaming services, but there certainly are more.

    I have lots of little companies , little apps that cant get featured on apple/google app stores while big apps have no issue. Tough shit to me.

    The 2 biggest on ramps to mobile internet and I got no juice. I just have to find ways to innovate like the millions of other apps that have no juice.

    Same applies to dealing with streaming. We stream magnolia pictures. Little company. no juice. Tough shit to me. I have to innovate.

    Mavs i have some more juice. If i can pre pay for streaming it so it doesnt hit bandwidth caps. Done and Done. If i cant. Tough shit to me.

    Me: Forbearance sounds much better than it sounds. When everyone asks for forbearance, it wont be as simple as you suggest. As a poster mentioned above theory never matches reality. Read o-title-ii-lite

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