Mark Cuban: Blocking and Discrimination OK, but not for HDNet

In my public talks on net neutrality, I often raise the irony of telco opponents of non-discrimination in Internet access being more than happy to advocate for non-discrimination, or “program access” when it comes to cable operators giving them video programming for their nascent subscription video services (like FiOS and U-verse). Art has blogged about it here. The cable companies are equally guilty of such doublespeak when they seek non-discriminatory interconnection rights for their Internet voice services on teleco-controlled broadband networks.

The newest entrant to this vaunted club is Mark Cuban, who is, among other things, the owner of HDNet, a very much ahead of the curve cable network that shows only HD programming. He has also been a friend of PK on copyright issues, particularly the broadcast flag and the Grokster case. On the other hand, Mark has not been a friend on net neutrality, largely because he believes that because bandwidth is so constrained in this country, tiers of Internet traffic are desirable. While PK agrees that the U.S. is far behind in broadband speed and value, we think the answer to the problem lies in promoting competition, not in partitioning the scarce bandwidth already available.

Like many net neutrality opponents, Mark’s analysis of the issue leaves out its most critical protection - ensuring that Internet service providers (ISPs) do not use their market power to favor certain content, applications and services because of a financial or other interest they may have in them. So I have been somewhat amused to see the reaction of Mark’s company, HDNet, after DIRECTV bumped his network from its cheaper tier of HDTV offerings to a more obscure and more expensive programming tier. Among other things, HDTV has complained to the FCC that DIRECTV is discriminating against it, since remaining on the cheaper tier is Discovery HD Theatre, a network that is controlled by the most-likely-soon-to-be-owner of DIRECTV, Liberty Media, owned by former cable magnate John Malone. HDNet’s “complaint” is in the form of a letter asking the FCC to condition the sale of DIRECTV to Liberty on the adoption of four conditions that would protect HDNet and other independent programmers from similarly discriminatory carriage decisions by DBS and cable providers.

The language of the letter would make any net neutrality supporter proud. It talks about the power that DIRECTV has “as gatekeepers of what Americans watch,” and how bumping HDNet to a less desirable tier, while a network affiliated with the entity that controls distribution (DIRECTV) gets the more desirable one, “do[es] not merely amount to discrimination, [it is] tantamount to the termination of carriage of a competing, unaffiliated programmer” because such a switch will lead to a huge loss of subscribers, which would in turn impact the advertising revenues HDNet can obtain. These of course, are the same arguments groups like ours have been making all along with respect to Internet traffic – if the entity that controls distribution (cable and telcos) can discriminate in speed and quality in favor of those applications, services and content in which they have an interest, the services that are not so lucky will be unlikely to find an audience, advertisers or a sustainable business model.

This of course, makes all the more puzzling Mark’s recent admonition to ISPs of all kinds that they block all P2P traffic because it slows down service for the rest of us. The only rationale for this double-double speak is that he believes that multichannel video distribution and the Internet distribution are somehow different, and that the latter will never be a good distribution vehicle for HDNet and his movies. His blog posts berating the Internet as “dead and boring” and TV as about to enter a new golden age bear this out. Or maybe he just wants to make nice to Comcast (they don’t carry HDNet currently). Regardless of the reason, his programming competitors clearly disagree, and the likelihood is that we will be seeing more, not less, legitimate use of P2P to deliver and obtain content.

PK supports HDNet’s effort to prevent DIRECTV from discriminating against independent programmers. But what’s good for the DBS provider is good for the ISP. When I see Mark at the Consumer Electronics Show in January, I’m sure we’ll have a robust debate.

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