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 @ 9:05am

    Come on guys. I get that you are for NN and Im not, but if you are going to link to 5 years old and older blog posts, at least read them first.

    I didnt say that Internet video wouldnt work in that blog post, I said it wouldn't scale. Compared to TV, it still cant handle large audiences for most. In fact, you contradict yourself if you say it can.

    do you think a small streaming startup can broadcast a live event to millions of people ? If you do, explain to me how that is going to work in an affordable way ?

    As far as Youtube, i stand by what I said. Aereo thought they could change the law and couldn't. Youtube couldn't change the laws or economics, but Google could. So I ended up being wrong about them. But the logic was sound.

    As far as entrepreneurs, few people knew my views on NN until the last couple weeks. Ive looked at thousands of deals over the last 10 years. Not a peep about NN>
    So there goes that premise.

    And why do you and others keep on trotting out the ridiculous premise that in 1995 i benefited from NN type rules. Nothing could be further from the truth. I had to pay for priority , i had to pay a premium to get access to dialup (which was under title 2), and to get access to the broadband homes and businesses. I competed with much bigger companies than mine and beat them every time because we out innovated.

    You also put a lot of credence in "proposed rules". Which proposed rules and from who ? And where has machine vision been discussed ? You certainly havent discussed it because i wasn't referring to machine to machine communications and network management wont suffice for applications that cant have lost packets.

    Your premise that only big companies can win is so outdated and ridiculous that you would think its 1968 and you just got fired from IBM.

    No question you can find stupidity from every company, large and small including mine and yours, but over the past 12 years can you deny the amount of innovation that has taken place despite any and all efforts by ISPs to slow them down ?

    You using your Facetime over cellular ok ? Has your network wireless performance improved over the last couple years ? Can you hear me now ? Has your wired broadband throughput improved despite NFLX going from nothing to 1/3 of primetime bandwidth ?

    If you want ot look at trends, they are going away from big providers, not towards them. Texting fees ? Gone. Caps, going up. Not fast enough for anyone, but they certainly wont accelerate with more regulation.

    Do i like that the big ISPs get to put all kinds of bs fees on us and in our bills. No. But i dont think regulation solves any of that

    And we have 5g on the horizon. Do you think it will get here faster with more regulation ? Particularly given that all those FCC commissioners you see today. They probably wont be on the FCC when 5g hits the market. THink they will give a shit how the rules they make today impacts future tech ? That is if they can get them done before the senate or congress jumps in and makes this a political play they can take advantage of. Think that will get you the "Proposed rules" you want ?

    And lets not forget that the ultimate fast lane app is also the most popular in this country. Its called digital tv. For many if not most it runs on the same cable into your home as your internet and provides a walled fast lane for content . What happens to digital tv if the proposed rules go a little bit too far because some people think OTT is the future and want to free up that bandwidth ?

    thats where you are on NN. You got it wrong. You made the mistake of getting religious . THe foundation of the NN argument is what you believe will happen. You provide a few anecdotes from more than 10 years of history as a foundation that your premise must be true.

    I try to work on what i know Im working on, what i know is happening. What i know Im investing in.

    on most other things we agree :)

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