McNealy Discusses 'Network Neutrality' Following are excerpts from Washington Post Staff Writer Arshad
The Washington Post
May 3, 2006
Mohammed's interview with Sun Microsystems Inc. Chairman Scott G.
McNealy on Tuesday. McNealy, who last week announced his decision to
give up the title of chief executive, spoke about a number of technology
policy issues facing Washington, including "network neutrality."
Q: What is your view on the issue of trying to prevent network operators
from discriminating against (content providers)?
A: "It's kind of like patents as an issue. People say, are you for a
patent? I am for appropriate patents. If there were no patents on drugs,
then nobody would spend the $5 billion it takes to bring a drug to
market. . . If you don't have X number of years of exclusivity on your
invention, then you are not going to make the big investments. If you
don't make the investments, you don't get the R&D. If you don't get the
R&D, you don't get the drugs. If you don't get the drugs, we all die
sooner. So we all probably want to maintain some level of motivation for
people to do drug R&D. Well, the same is probably true on network
investments. We probably want those who are making the big multibillion
dollar network investments to have a way to monetize their investments.
If they don't, who is going to build the networks? People aren't just
going to build them to let everybody else use them and to not make
money. So I certainly can appreciate the network operators' view that
they want to be able to make money on the many tens of billions of
dollars that they are putting into capital and the more money they make,
the bigger and better the networks they will build. Now, on the other
side, folks clearly want to make sure that you have choices for
delivering content so that there just isn't one pipe into the home.
Right now, you have got cable, you have got the satellite, you have got
wireless . . . and the telco, telephone DSL kinds of lines coming in. So
that there is a lot more choice than there was in terms of how you get
there. So, am I nervous about the issue? Absolutely. Whenever the
legislators are involved, I think we all ought to pay attention. Do I
think that there is a good common ground that can provide the choice and
business opportunity for all of the content providers while still
providing an opportunity for return on investment for the network
operators? Surely there has got to be a common ground there. It
shouldn't be that hard. Now, each side will negotiate very hard because
there is a lot at stake here so I think as long as the government
enforces antitrust policy aggressively, which basically ensures that
consumers have a choice, we don't have a real net neutrality issue.
Q: But most ordinary Americans have at best two choices right now. I
wonder whether you think that is adequate. I wonder whether you think
the pie is big enough to attract other people into it in a genuinely
competitive way?
A: You know, sometimes a choice of two seems better than a choice of
one. . . . I couldn't weigh in and say that for sure. I think that's
where the rub is. If there were six (networks), there wouldn't be a big
issue. Of course, if there were six it's probably not economic. I think
three is a good number.
Q: It sounds like you lean toward the perspective of the network
operators, that if you don't give them an adequate return . . .
A: I don't think the network is anywhere near built out to the
capability that we need it to be built. And when you start wanting to do
full-motion video, and do the kinds of simulations in real-time market
places, and all the things that we want to go do, do the surveillance
and the audit trail and all the other things we want to do, the network
ain't there yet. And it's going to require lots of R&D and anything that
kind of blows up the movement forward of the network, I think, takes out
not only the network service providers but also the content creators. So
if I had to err in the short run, I would probably say, let's just make
sure we don't screw up the investment in the network. The U.S. is not
what I would call leading the world in network investments and broadband
and ubiquity and that sort of thing . . . I haven't done enough of an
analysis to know exactly where everybody's position is but if I was a
legislator I would just want to make sure that I maintained the ROI
(return on investment) economics for the people who are putting the
billions of dollars into (building the networks).
Q: Do you think, as a matter of probability, that a network operator is
likely to act in a discriminatory manner?
A: If there is only two, you have a chance for the market not to be as
clean and pure . . . I would agree there is some tension and I would
understand why Google, for instance, might be a little nervous about
this.
Q: Explain that to me:
A: I think you did with your question . . . I am not going to go there,
if you will, but a choice of two is choice but in its most limited way .
. . I think is probably the best way to put that. So if one (network)
locks up with one -- if Yahoo gets one, Google gets the other, who does
Microsoft get?