Over the last few weeks, billionaire and former tech executive Mark Cuban has become increasingly vocal on the subject of net neutrality. In an interview with The Washington Post yesterday, Cuban said that he was in favor of creating "fast lanes" on the internet that would ensure the quality of certain services. He’s a man who has always had plenty of opinions, and he’s certainly entitled to them, but in this case, it’s worth pointing out what a hypocrite he sounds like, pushing a position that would have been a death blow to the very startup that made him so rich in the first place.
The bulk of Mr. Cuban’s wealth comes from the sale of a company he created, Broadcast.com. How did he build that company? To quote Wikipedia:
In 1995, Cuban and fellow Indiana University alumnus Todd Wagner started Audionet, combining their mutual interest in Indiana Hoosier college basketball and webcasting. With a single server and an ISDN line, Audionet became Broadcast.com in 1998. By 1999, Broadcast.com had grown to 330 employees and $13.5 million in revenue for the second quarter. In 1999, during the dot com boom, Broadcast.com was acquired by Yahoo! for $5.7 billion in Yahoo! stock.
Permission-less innovation is what we have now
This is the picture-perfect example of the permission-less innovation that the internet has fostered. A pair of entrepreneurs had an idea and built it using a set of free, open protocols that connected them to tens of millions of consumers. How well would this same idea have worked in a world full of dedicated "fast lanes" on the internet? Terribly.
In a world where companies are allowed to pay to prioritize their data over others, consumers will naturally gravitate toward the services that work best. One of the biggest pain points for data flowing over the internet will be streaming video, especially live video, exactly the kind of thing Broadcast.com specialized in. If ESPN and the NFL can afford to pay for priority lanes to deliver their data, what chance does a young startup with limited cash really stand?
Cuban, in arguing for fast lanes, cites a few benevolent uses that might justify special treatment. Priority for data to doctors using apps or for machine vision technology that would help the blind to surf the web. No doubt these are noble ideas, but in a world where fast lanes are legal, every corporate entity with a profit motive will take advantage of them.
Cuban reveals his naked self-interest
In fact, later on in the interview, after the bit about doctors and computer vision, Cuban, who owns the Dallas Mavericks basketball team, slips off the mask and reveals his naked self-interest. When asked about services that stream data which doesn’t count against a user's monthly cap, he replied, "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."
Let’s slow down for emphasis here. Cuban is saying he wants to pay for certain data to get preferential treatment, so sports fans can enjoy Mavericks basketball without it counting against their data, much like T-Mobile's current streaming music offering. If Broadcast.com was a new startup today, and consumers were choosing between the Mavericks game on a T-mobile sports app and the one on Broadcast.com that would eat up their data plan, which one do you think they would choose?
Ayn Rand must be spinning in her grave
Cuban, like so many successful businessmen, is a devotee of Ayn Rand and her writings on Objectivism. He has often argued for the purest form of laissez-faire capitalism, in which the best ideas and execution win out, free from onerous government rules and regulations. Net neutrality, he assures us, would enrage Rand and will ruin the internet, just like government intervention wrecked the railroads.
But here’s the thing: our internet service providers don’t exist in a true free market. Cable providers and telecom companies function like utilities in many respects, with a single provider blessed by the government to tear up the roads and move through private property to lay the infrastructure needed to deliver this data. That’s why President Obama, among others, has called for the FCC to reclassify broadband internet service as a utility. And it's why Verizon, when it needs to lay fiber for its FiOS service, calls itself a Title II common carrier, in order to get taxpayer subsidies and rights of way for construction.
Cuban fails to grasp Net Neutrality's true meaning
What Cuban and many others fail to grasp is that net neutrality has always been about ensuring those monopolistic internet providers don’t play favorites. Open internet advocates don’t want things to change, but rather to stay the same. Net neutrality has always been about preventing rich incumbents from stomping out new ideas. It’s actually about fostering just the kind of world Cuban and Rand claim to love. It’s shameful that a man who benefited so greatly from that level playing field is now advocating to destroy it.