Mark Cuban

Mark Cuban

Image: Getty Images

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Much like Friedrich Nietzsche, who scandalized 19th-century Europe by declaring that "God is dead," Mark Cuban has some bad news for all the true believers who are investing billions in the Web.

The internet is "dead and boring," Cuban says in an interview with Portfolio.com. "We have reached the point of diminishing returns with today's internet. The speed of broadband to your home won't increase much more in the next five years than it has in the last five years. That is not enough to work as a platform for new levels of applications that will require much, much higher levels of bandwidth."

Of course, the 49-year-old Cuban made his $2.3 billion fortune as an internet entrepreneur. In 1999, he and business partner Todd Wagner sold their Web TV company, Broadcast.com, to Yahoo for $5.7 billion in Yahoo stock, then cashed out before the tech market imploded -- leaving Cuban with plenty of money to buy a basketball team, the Dallas Mavericks; launch a high-definition television network, HDNet; hire Dan Rather; and start a vertically integrated entertainment company, 2929 Entertainment, that makes and distributes movies and owns a chain of theaters.

He apparently still has enough left over to bid on the Chicago Cubs, recently put on the block by the Tribune Co., though he's uncharacteristically mum about his plans. "If I told you I would have to kill you," says Cuban, who last month officially joined the list of prospective buyers by applying to Major League Baseball to examine the team's books. "I'm sworn to secrecy."

Answering questions by email from the Cayman Islands, where he was vacationing with his family and recovering from hip-replacement surgery, Cuban also shared his views on Rupert Murdoch's acquisition of the Wall Street Journal, Yahoo versus Google, day-trading, his personal investment strategy, and why he won't pull the plug on his much-criticized business journalism operation, Sharesleuth.com, in which he shorts companies that the site plans to trash-hoping to turn a tidy profit on his pre-publication insider knowledge.

Lloyd Grove: As recently as May 2007, you told the House Subcommittee on Telecommunications and the Internet that government policy could encourage internet providers to make the necessary investment in fiber optics to significantly increase bandwidth to home users, in line with industrialized nations such as Japan, Germany, and South Korea, and that the economic benefits would eventually outweigh the costs. But last month, you declared: “The internet is dead. It’s over.” You said it’s “for old people” and it’s a “stagnant consumer platform.” Did you change your mind between May and July? Who or what killed the internet? And aren’t you biting the hand that fed you?

Mark Cuban: The internet of today versus what I suggested to the committee would happen if internet speeds to the home increased to 1 gigabyte per second, is like comparing the plane Orville and Wilbur Wright built in 1903 to a brand-new Boeing.

We have reached a point of diminishing returns with today’s internet. The speed of broadband to your home won’t increase much more in the next five years than it has in the last five years. That is not enough to work as a platform for new levels of applications that will require much, much higher levels of bandwidth.

Broadband to the home isn’t fast enough for downloads of movies at DVD quality to be ubiquitous. That means it’s no longer a platform for technological innovation.

Think of it this way. Way back when, electricity changed the world. It was the platform for everything electronic that we do today. Do you get excited about electricity or is it just a utility? Maybe old people who remember the advent of electricity still get excited about it. No one else does.

The internet is in the same position today. It’s no longer an exciting platform for societal and business change. It’s a utility. It’s something that is exciting to people who remember the old days of the internet.

The only way to change that is to upgrade the platform for bandwidth transport across the country to a minimum of 1 gigabyte per second throughout to every home. At that point kids will come up with new and unique applications that we can’t imagine today. That’s when it becomes exciting. Until then, it’s dead and boring.

L.G.: What percentage of U.S. households have access to HDNet and HDNet Movies, and what will that number be a year from now, and when will there be 100 percent penetration? What percentage of households have HDTVs? Other than Time Warner, what other major cable providers carry your channels?

M.C.: Since we are on DirecTV and Dish Network, pretty much 100 percent have access to us. On the cable side, we are on Time Warner, Verizon, AT&T, Charter, Mediacom, Insight, and about 30 others in the U.S. as well as Canada; there is a full list at www.hd.net, or better yet, just call your cable, telco, or sat provider and just order us. It’s easy.

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