I'm a big fan of Mark Cuban, though I've never met him in person. He's a billionaire entrepreneur, he likes sports, and he's not afraid to take some heat for standing up for his guys (the Dallas Mavericks pro hoops team). I'm pretty sure we would have a fun night out on the town.
However, reading the comments Cuban made about network neutrality to my colleague Jeff Bercovici earlier this week, I can only conclude that Cuban has either completely lost touch with reality or is just shilling for his own company HDNet, which offers all-high-definition TV fare via a slew of providers, including cable TV outfits.
Of course, the idea that Cuban may be slightly "off" is hardly new: He's racked up more fines for wacky behavior than any other NBA owner in league history. One of his own stars once said: "He's got to learn how to control himself as well as the players do." And some of his past pronouncements, such as declaring the death of YouTube in 2006, and the death of the internet in general in 2007, have proved to be way off the mark.
Cuban made his fortune at the height of the dot-com bubble by selling his company, Broadcast.com, to Yahoo! for $5.9 billion in Yahoo! stock. Since then, he has been an outspoken voice in American culture -- with very mixed results. He once criticized the NBA's manager of officials, Ed T. Rush, saying that Rush "wouldn't be able to manage a Dairy Queen." That earned Cuban a $500,000 fine and a day's work serving ice cream at a Dallas Dairy Queen, after the company protested.
During the 2006 NBA playoffs, Cuban cursed out Spurs forward Bruce Bowen and was fined $200,000 by the NBA for rushing onto the court. After the 2006 finals, the league fined Cuban $250,000 for repeated bad behavior following the Mavericks' loss to the Miami Heat in game five. More recently, the NBA fined the billionaire $25,000 for yelling at Denver Nuggets player J.R. Smith during a January game. In March, he apologized after telling the mother of Nuggets forward Kenyon Martin that her son was "a thug."
Cuban's latest pronouncement involves the new FCC broadband policy rules, announced Sept. 21. In a nutshell, he argues that a free and open internet will be "crippled by a glut of live and streaming video, which leaves disgruntled consumers with no other option but to get cable," as MediaPost puts it. Thus, so-called "net neutrality" is a big win for Comcast, the nation's largest cable company, as well as other cable providers.
In response to a question about his comments to Bercovici, Cuban calls his position "pretty straightforward stuff."
"An open net is just that," Cuban wrote in a Facebook message to DailyFinance. (He almost never does phone interviews.) "And if anyone has the expectation of TV over the internet, an open internet will kill that expectation."
In his conversation with Bercovici, Cuban portrayed net neutrality by using the metaphor of Fifth Avenue, a major thoroughfare in New York. "Take away the special lanes for bikes and buses, take away the cops directing traffic flow, and everything gets very, very slow," is how Bercovici paraphrased Cuban's point.
Is that really so? Seth Johnson, an expert on broadband network management and coordinator of the Dynamic Platform Standards Project, says no. "All those vehicles on Fifth Avenue are already stuck there, and apparently they don't even get an alternate route," Johnson tells DailyFinance. "What he's really describing is bad network management."
"This is apparently the behavior Cuban expects," Johnson says. "The network providers will put up this charade, forcing us to accept that we don't get what we pay for, until we accept their traffic cops."
Art Brodsky, the communications director of Public Knowledge, a D.C.-based group that's pro net neutrality, also finds fault with Cuban's comments. "Net neutrality does not eliminate network management nor does it take away the ability of network providers like Comcast to add capacity," Brodsky says. "What it does do is prevent the people who can afford limos from getting that traffic lane of their own." In other words, the FCC rules would prevent the broadband companies from favoring rich content providers at the expense of smaller startups and consumers.
Other critics say Cuban is just being grumpy because he opposes net neutrality. An open internet offering free, high-quality video content would surely compete with Cuban's company, HDNet. Thus Cuban has been a big advocate of cable-based high-quality video, while disparaging web-based video.
"This is just sour grapes by Cuban," says Robb Topolski, the network engineer who originally detected that Comcast was blocking consumer internet activity in May 2007 and now serves as chief technologist at the New America Foundation's Open Technology Initiative, which supports net neutrality. Comcast has already voluntarily agreed to be "protocol agnostic," meaning it won't favor one type of content over another. That prompts Topolski to note that "the truth is, Comcast will have to change nothing to respond to the proposed FCC rules or the proposed NN legislation. It is already neutral."
In the interview with Bercovici, Cuban goes on a slightly bizarre rant, theorizing that if someone in his neighborhood uploads a live streaming video of the family cat to the internet during a big sports event, "nobody in my neighborhood's going to get the game. Just wipe it out, just like that."
Flat out wrong, says Topolski.
"Streaming video protocols over residential broadband don't work the way Cuban suggests," Topolski says. "Residential broadband is rate-limited, so no one person can commandeer the whole neighborhood." That is, because each consumer gets only a limited slice of bandwidth to use, taking over all the bandwidth on a given block, as Cuban suggests, simply wouldn't happen.
A follow-up e-mail and Facebook message to Cuban seeking a response to these criticisms was not immediately returned.
This isn't the first time Cuban has made grand pronouncements that turn out to be way off the mark. Back in September 2006, when I reported (correctly) that YouTube was for sale for at least $1.5 billion -- contrary to the startup's public statements -- Cuban wrote a post entitled "The Coming Dramatic Decline of Youtube." In it he concluded: "Youtube, we hardly knew you."
Google bought the company two weeks later for $1.65 billion. Since, then YouTube has transcended the web to become a global cultural and political force.
And in an August 2007 blog post, Cuban declared that "The Internet is Dead and Boring." He wrote: "The days of the Internet creating explosively exciting ideas are dead."
Today, of course, Cuban has a frequently updated Twitter account.
Cuban was off-base those times. And he's off-base now. It's not that he's ignorant, he's actually a very smart guy. But in light of his present and past comments, one might conclude that he just doesn't care about the internet. Or maybe he just really wants more cable carriage for his HDNet and simply views an open internet as some sort of competitive threat.
I'll leave the last word to my colleague Jeff Bercovici, who's story noted that "as the chairman of a cable channel that derives much of its revenue from the carriage fees paid to it by cable providers like Comcast, Cuban will be a happy man if the scenario he outlines above comes to pass, and a less happy man if what he calls the 'incredibly greedy people' who want to watch TV free over the internet get their way."
Follow Sam Gustin, a reporter for DailyFinance, on Twitter here. Follow DailyFinance's tech coverage here.
Basics of Diversification
Learn one of the fundamental concepts of building a portfolio.View Course »