John Malone On Economics Of Delivering Content Over The Internet
John Malone, chairman of Liberty Media Corp (NASDAQ: LMCA), is somewhat of a legend when it comes to the media and telecommunications business. The kind of success Malone has had with his media investments are only attributable to the deep understanding he has of the business. That's why when he speaks on the future of digital media, the Street listens.
Malone was recently interviewed by CNBC’s David Faber about the economics of delivering content on the Internet and regulatory intervention concerning the Internet.
"I suspect [FCC Chairman Tom] Wheeler doesn’t really want to go there," Malone said. "He wants to go to some kind of negotiating solution that will suffice until there is competition, more competition and effectively allow the Comcast deal to go forward on some negotiated connectivity basis, which could then be superseded if in fact the Title II or something like Title II was pursued. That will be a big court challenge, and we won’t know the answer to that for probably a couple of years."
When asked about whether the economics of acquisition of Time Warner Inc (NYSE: TWX) by Comcast Corporation (NASDAQ: CMCSA) change drastically in a Title II environment, Malone was of the view, "It depends on what type of regulatory intervention, it could be very light, which will really be a non-discriminatory. The bottom line on this is as speeds of the Internet and amount of data on the Internet, the consumer usage of Internet continues to explode, somebody has to pay for the capacity that it takes to do this connectivity."
Malone feels that it will either be companies who are indirectly involved in dealing with consumers or Internet companies like Comcast who will be charging for volumes of data at the consumers’ end.
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