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As Internet usage explodes, someone must pay: Liberty's Malone

While the debate rages over net neutrality and how heavily Internet service providers should be regulated, the bottom line is that as Web usage explodes, somebody will have to pay for the capacity it takes for that connectivity, Liberty Media Chairman John Malone told CNBC on Wednesday.

"It's either going to be the people who have a relationship with the consumer indirectly through the transport of the Internet or it's going to be the Internet companies themselves ... charging for volume usage at the consumer end," he said in an interview aired on "Squawk on the Street."

"The economics have to work because this capacity is not cheap."

Last week, President Barack Obama asked the Federal Communications Commission to set strong rules to protect net neutrality, which would keep the Internet open and free.

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Malone said it would be "unfortunate" if the government intervened too heavily.

"Letting this capital marketplace play out will see multiple terrestrial providers—at least two, since the telephone industry has pretty much committed to build out and upgrade their network."

He also took issue with the theory that high-speed Internet connectivity is a market unto itself.

"There's no barrier to entry in high speed. It's a question of spending capital. The cable guys who have gone forth and upgraded their networks have a time lead, an edge over some other purveyors who haven't yet spent the money," Malone said.

"The fact that one industry through its investment has got an edge for a period of time over another, that's capitalism to me, that's not antitrust."

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Malone also hinted at future acquisitions by cable company Charter Communications, which Liberty holds a stake in.

"Charter because of its structure, its history and its management team is probably in the best position to consolidate smaller operators efficiently and also do the kind of restructuring of ownership that's necessary in order to make the whole industry more efficient in the U.S."