According to the Los Angeles Times recently, “In written questions to Comcast and NBC Universal regarding their $30 billion proposed marriage, Sen. Al Franken (D-Minn.) — who has been one of the harshest critics of the deal — wants Comcast and NBC Universal to promise that it will put all its television shows online. He also wants assurances that shows that the companies put online be made available to every one and not just people who get their Internet service through Comcast.” (Msnbc.com is an NBC Universal-Microsoft joint venture.)
Also in the Times article: “As Franken notes in his questions to the two companies, 'The Internet is the future of the media business.' "
Lets start with the first request that all NBC Universal/Comcast shows should be delivered over the Internet. Someone needs to explain to Sen. Franken that TV shows delivered over the Internet consume bandwidth. A lot of bandwidth. There are reasons why YouTube limits the size of files that users can upload to it.
The first is that video is the ultimate bandwidth pig. The second reason is that bandwidth is not unlimited or elastic. The more bandwidth that is consumed, the more bandwidth that must be added to maintain existing levels of service. That costs a lot of money. Think that might push up Internet rates to consumers?
I get that no one really cares if Comcast has to spend money on capital improvements to add bandwidth to the home. They should. It's pretty stupid to push consumption in a direction that will raise Internet rates to receive the same content for which there is already a phenomenal digital network in place to deliver that content.
Duplication, higher costs
Think about it for a minute, Sen. Franken. Comcast, and every large TV provider has a digital network in place that can and does deliver gigabits of TV content perfectly, every second of every day, to any TV set in any home that is connected to their network.
It works. Well. What you are asking, Sen. Franken, is that Comcast duplicate the delivery of theirs and NBC Universal's shows on a network, the Internet, that is not, and has never been designed to handle the delivery of huge volumes of video and TV shows.
What you are forcing them to do is not only going to impact Comcast, it's going to push any Internet provider on which NBC Universal/Comcast-owned shows are delivered to deal with the increased bandwidth needs your request requires.
Increased bandwidth needs to the home means more money spent on infrastructure needed to support that delivery, which in turn is going to mean higher Internet rates and/or caps on Internet bandwidth consumption for consumers. Did you even think through what would happen if NBC Universal/Comcast was required to simulcast the Olympics over the Internet ?
More questions than answers
Even if shows are only required to be placed online after the fact and offered on demand, even if we put aside the cost issues, you then have to answer a bunch of expensive questions: Which video format? Flash? Great, except that it won't work on most mobile devices. Flash and MPEG-2 or the Google-owned "On2" format?
And should the on-demand TV shows be streamed or progressive download? Streaming is more expensive, but progressive download leaves a copy on the destination device, which is going to create huge issues for copyright owners. Does this apply to shows that NBC licenses or just the shows it and Comcast produce and own? Try explaining the difference to your voters.
And what timing? Do they have to post the shows immediately after they air, or is it okay to have them post the shows one, two or three days or weeks after the show airs? Right now these are questions that the market defines. If you require delivery online in order to make your constituents happy, will you try to make all of them happy?
Let me try rephrasing all of this in a different manner. Google can’t make money delivering video content that costs them nothing over the Net for free; what do you think will happen to Internet rates when you require NBC Universal/Comcast to deliver content that costs millions of dollars per hour for free?
Generates little revenue
I understand that you just want to make sure that people who are getting shows online now continue to get them.
What you don’t understand is that the vast majority of shows online are library shows that weren’t generating much, if any, revenue for their producers, so any advertising revenue they could get by placing the shows online was found money.
Established shows that are currently on air are either not online or are delayed. Now that producers are recognizing that the advertising dollars generated by current shows is of marginal value at best, you will see more and more shows put behind pay walls available only to subscribers. Try to regulate these market-driven decisions and you will certainly find the law of unintended consequences biting you.
But wait there’s more. The hardest and most expensive part of delivering all of this content to the home isn’t even what the TV providers have to do. It's what has to happen in the home.
Sen. Franken, did you install your own wireless router in your home? Ever try to put in a second one to make sure you can get a signal that is strong enough to carry the video you want to watch into the other rooms? Ever experience a slowdown in that wireless network at your place? Ever get annoyed that video you were watching buffered and you couldn't figure out why? Ever try connecting them to your TV? Who is going to solve these issues for people who think it's their right to watch their TV over the Internet? Who is going to pay for it?
Finally, let's get to your statement, “The Internet is the future of the media business.” Dead wrong. Not even close.
It's about mobile
Let me explain to you the future of the Internet. We all are becoming more and more dependent on our handheld devices, which are becoming more and more powerful and an expanding part of our daily lives.
For many, the mobile device never leaves their sides. This increasing dependence on mobile is slowly but surely weaning us off our desktops and laptops. As the capabilities of mobile devices and their apps increase, so will our transition away from traditional computers.
Soon we will rely exclusively on our mobile devices, or be able to tether the mobile device to the screens and keyboards we use at home.
Over the next few years, we won't sit down and fire up the laptop or desktop. We will place our mobile device next to the screen and keyboard we have on our desk or pulled out of our briefcases.
For those of us who need always-on Internet for family members or business, we will consider replacing our land Internet lines with a 4G (fourth-generation wireless) access device that is part of our mobile account. Combined with all the advances in cloud computing, it should be a simple and very compelling option.
At that point people will ask why they pay for both fixed Internet and mobile Internet. Just as people are dumping land phone lines for mobile, they will dump fixed Internet lines. Not everyone, of course. Not even most. But like phone lines, enough will leave their fixed Internet lines behind to change the economics of the Internet.
A different experience
How does that affect the future of media? Mobile Internet is different than landline Internet. We won't look to replicate the experience we got from Internet landlines; we will expect new and different experiences that play to the strengths of the device and delivery platform.
And we will still get our TV the old-fashioned way on those new 60-inch big screens we just upgraded to for $499. Moore's Law applied everywhere.
Let me translate all of this for you, Sen. Franken. If you get what you ask for, by the time you are done answering the complaints of why didn’t you realize that your request would jack up everyone’s Internet bill, put caps on usage and negatively impact the performance of your constituents' home Internet, you just might be the former senator from Minnesota.
How you view the Comcast/NBC merger is up to you. But before you go off on an Internet rampage, please get a different side of the technology story.
Mark Cuban is the owner of the Dallas Mavericks and is chairman of the HDTV cable network HDNet. This article first appeared on his weblog blog maverick.