Re: ?End of Internet as we know it

[Aaron Nabil <nabil () world net>]

Vigdor Schreibman - FINS writes...
> On Tue, 1 Jun 1993, Stephen Wolff wrote:
>
> > ->According to Science (21 May, v. 260, p. 1064) the NSF will quit providing
> > ->the internet for everyone to use in the near future.  The network service
> > ->will become a commercialized affair which will be taken over by private
> > ->companies.  Doe anyone know when this will happen and who is responsible
> > ->for this decision? 
> > ->
> > ->R.N. DuBois, Vanderbilt University Medical Center
> >
> > Dick -
> >
> > While the Science article *could* be read that way, it shouldn't be.  What
> > it means is that, under the new solicitation, the NSF will not provide
> > Backbone services as a free good to regional networks but will instead
> > entertain proposals to provide funds for those networks to buy those
> > services on the open market.  Today's CoREN announcement illustrates quite
> > graphically that the regional nets are doing this *even without NSF funds*.
>
>   Don't you buy that spin on this story, Dick.
>   . . . 

And what a spin it is!  Steve, exactly who did you think was going to foot
the bill for COREN?  The regionals?  Nah-uh.  You.  In about a month you
are going to get 8 very nicely bound, very similarly worded proposals
that basicly ask the NSF to pay for COREN as "inter-regional connectivity"
or maybe "as a connection to a NSP for transit to a NAP".

Below is a question, well, maybe I should use quotes.  A "question" I was
going to send in as a response to the solicitation, but didn't (I didn't think
it would go over too well ;)

This was before the COREN announcement, so replace the word "syndicate" with
"organization", otherwise it tracks well.

. . .

        Hypothesize that a group of regional networks, say 8, form a
syndicate to provide NSP-like transport to the NAPs and/or other inter-regional
connectivity.  The syndicate would "sell" this service to member regionals at a
rate that exceeds the actual costs of providing it, or it could bundle the
NSP-like services into a package so as to render the NSP-like component
inseparable from any other projects or services of the syndicate.  Since
the members own the syndicate any disparity between what it costs to
provide NAP/inter-regional connectivity and what the syndicate charges
isn't a issue, because in sum and substance by purchasing services from
the syndicate they are simply transferring money from themselves to what
amounts to a "Swiss bank account" in their collective names.  This money
they are "spending" with the syndicate would of course be the fruits of an NSF
grant in response to this solicitation with the amount on the check being 
whatever they tell the NSF the syndicate is going to "charge".

        So what this scenario proposes is a device for the regionals to
solicit NSF money under the banner of buying "inter-regional connectivity"
from a NSP when in actuality they would be buying the services from themselves
at whatever price they set. The syndicate could use any surplus funds to
bankroll projects that wouldn't knowingly be funded by the NSF, such as
pursuing commercial and "enterprise" connectivity, offsetting the general
operating losses of it's members, or simply saving up any surpluses to pay
for inter-regional connectivity for the member regionals as the NSF phases out
its support. Since the syndicate wasn't the recipient of an NSF grant it
wouldn't be subject to NSF oversight, and the regionals who would be
subject to said oversight can plead ignorance. "We just write them a check, we
don't control what they do with the money."
 
        One would at a minimum expect that this scenario would result in the
syndicate pricing its NSP-like service that they bill the regional for as high
as they thought they could get away with.  If the regionals get the expected
NSF grants, great, more money to spend on whatever they want now, and maybe
some to keep for later.  And if they don't, no problem since there isn't any
rule that says the syndicate can't "re-evaluate" its pricing if they lose out
on the solicitation.

        You can bet the syndicate will "re-evaluate" its pricing during the
four-year taper down over the life of the program.  I predict the magnitude of
the "adjustment" in pricing to exactly equal whatever the NSF is willing to
cough up that year.


-- 
Aaron Nabil
nabil () world net