Diller makes case for net neutrality


Barry Diller pleaded his case Tuesday for "network neutrality" on the Internet, a concept that could guarantee "the final convergence" of TV and computer.

Speaking primarily to Michael Eisner at the Forbes magazine Media, Electronic Entertainment, Technology conference at the Beverly Hills Hotel, Diller blasted those who would upset the status quo.

"We have lucked into a system that is currently neutral," said Diller, chairman and CEO of IAC/InterActiveCorp.

Some net neutrality proponents have been seeking legislation to guarantee its continuation, while some telecommunications companies argue they should be allowed to charge a higher fee to consumers or Web sites that suck up more bandwidth than do others.

Eisner, the former Walt Disney Co. CEO, agreed with Diller, likening Internet development to the rollout of the railroad system and even electricity, where consistent standards and access were crucial.

Forbes managing editor Dennis Kneale took on both, arguing that the U.S. is behind much of the world in broadband technology because mandates of net neutrality discourage telcos from spending for needed technological upgrades.

Diller, who earlier in the discussion disparaged anyone who would deny the right of media companies to protect their content — even snippets that might be used at YouTube — was being inconsistent, Kneale argued.

"You want ironclad copyright protection," he said, "but if AT&T spends $10 billion building a super-fast fiber network" that lets consumers download a feature film in a few minutes, why should it then be denied the ability to charge a premium for access?

"Over that Internet wire, you can't discriminate," said Diller, whose company owns several bandwidth-intensive businesses that attract huge online audiences.

Asked by Eisner if Apple Computer CEO Steve Jobs might be the one to finally marry the computer to the TV screen, possibly by way of Apple's iTV product due next year, Diller said: "I don't know if Steve Jobs will do it or if Grandma Moses will do it. But it will happen."

When it does, it will come with some sort of remote control transaction button, allowing consumers to conduct a whole lot of commerce and other two-way activities while watching TV.

Dubbed MEET, the conference, which concludes today, is the first of what Forbes said might be an annual event.

"We're living through the era of the greatest business model change in history, and we're probably at ground zero right here in the media, technology and entertainment business," Forbes publisher Rich Karlgaard said.

He also noted that around the same time that Google said it would buy YouTube for $1.65 billion, NBC announced layoffs. And this week, as Google shares approached an all-time high, shares of New York Times Co. hovered around a five-year low.

"The next Internet revolution is here," Kneale said, recalling the stock market bubble that began to burst in 2000.

"For six years, we have waited and watched and wondered," Kneale said. "Was there no real value there?"

Regardless, there's value now, he said, noting that tiny Tiki Bar TV, basically an Internet show about mixed drinks shot from founder Jeff Macpherson's living room, gets a bigger audience than does CNBC's popular "Mad Money" stock-picking show starring Jim Cramer.

Diller, while noting that the distributors are no longer a scarcity, as they were when he helped create Fox Broadcasting Co., nevertheless defended, at least somewhat, traditional TV and filmed entertainment.

"Editorship is a good thing," he said. "There aren't many talented people."

Eisner asked Diller which he'd prefer to buy, YouTube for $1.65 billion or NBC for about $45 billion.

"The thing is, I didn't buy either," Diller said.