Mark Cuban: FCC's Net Neutrality, Title II Actions "Will Fuck Everything Up."


Speaking at the Code/Media conference in California, entrepreneur Mark Cuban—who made his pile selling Broadcast.com back in the day—told his audience that allowing the Federal Communications Commission (FCC) to regulate the Internet in the name of Net Neutrality (or anything else) will "fuck everything up." He continued: "Having them overseeing the Internet scares the shit out of me."

Since the sale of Broadcast.com to Yahoo in 1999, Cuban has become better known for his hosting job on Shark Tank and for owning the Dallas Mavericks, whom he turned from one of the worst franchises ever to NBA champions. He's also kept his hand in all things tech-and-net-related via plays such as HDnet.

At the conference, Cuban (correctly) argued that apart from a couple of isolated cases, there's no evidence that ISPs are throttling or banning access to particular sites and services and he said he's fine with Congress passing a law prohibiting ISPs from blocking legal sites.

The hot-button issue of the day is less the blocking of whole sites and more preferential treatment that might be given to some traffic. Although it's not an exact fit for Net Neutrality (read more here), the case that scares many neutrality advocates revolves around whether Comcast slowed down Netflix streaming video as a way of getting more money out of the video service to deliver its content. Comcast and other ISPs claim that Netflix was bogging down their networks and the company should pay higher fees to carry their content so the ISPs can increase capacity. Netflix and others argue that ISPs, which control "the last-mile" to users are essentially extorting high tolls out of companies with popular services. The ISPs, they charge, have effective monopolies over service areas and this sort of action will become increasingly common if the 'net isn't regulated more heavily by the government.

Cuban is having none of it:

Discussing the Comcast/Netflix fight (which ended last year with Netflix : "It's a battle between two fairly large companies," Cuban said. "[They] worked it out, just like happens in business every day."

Read more at re/code.

When it comes to Net Neutrality, it's very easy to get bogged down in technical details. But in a large sense, I think Cuban is absolutely right (this isn't his first slag at the FCC either). There's no reason to believe that the FCC will be a particularly good steward of the Internet if its attempt to regulate the internet under Title II regulations and as a public utility become law. The FCC has a terrible track record when it comes to allowing innovation (see the decades in which it helped create and then regulate the telephone monopoly in the United States). More important, Net Neutrality advocates are waging every bit as much as pre-emptive war on ISPs as George W. Bush did on Iraq (and that turned out so well). Worse still, as outlined so far, the FCC is saying that it wants huge power but will use a "light touch" and engage in massive "forbearance," meaning that it won't use the full scope of the regulatory powers it has decided it has (this, despite losing court battles on precisely whether it has the right to regulate the internet as its' proposing).

Lord knows I've got no interest in defending Comcast, Time Warner, or Verizon as ISPs—each has failed me as a paying customer. But the FCC's own data show that the number and variety and speed of both fixed and mobile connections are growing and that 80 percent of Americans have access to at least two high-speed providers (see chart 5b). If the FCC wants to do something, it should work to relax rules constraining the deployment of more new and different ways to access the internet.

Despite its positive name, Net Neutrality is best understood, I think, in terms of public-choice economics and theories about regulatory capture. The Netflixes of the world are on top of the internet heap and want to freeze the market at this particular moment in time. Of course they do: It's worked perfectly for them. But their move is hardly disinterested at all. And their preferred solution of giving the FCC the ability to control the business plans of ISPs now and in the future amen is one that threatens not just to freeze the market as it exists right now but to slow down the pace of innovation and change in an industry that has radically reinvented itself every couple of years. 

Reason on Net Neutrality.

Economist Tom Hazlett discusses "the fallacy of Net Neutrality." Take a look: