Internet Economics and Dynamics

[David Farber <farber () central cis upenn edu>]

Date: Mon, 25 Oct 93 10:56:04 -0400
From: Tony Rutkowski <amr () cnri reston va us>


The following letter to the editor may prove useful
 in dealing with an oft misunderstood subject.
The Internet Society deals with this subject constantly
in public dialogue and relations with other organizations.


The intent is not to denigrate the valuable role NSF and
other public bodies worldwide play in assisting Internet
development and connectivity to sectors of end-users, but
to set the record straight on the current economics and
dynamics.


=========================================================
Denis Gilhooly
Publishing Director
Communications Week International
Paris




Dear Denis,




In one your recent excellent editorials, in dealing with the subject of
National Information Infrastructure, you made reference to the Internet
as a development paradigm for technologies.  Inadvertently, I'm afraid
you replicated some outdated information.




You said:




   "A case in point: Because the National Science Foundation/Defense
   Advanced Research Projects Agency picks up Internet costs, usage is
   exploding."




Certainly it IS true that usage is exploding.  Based on current connectivity
rates, another TCP/IP internetwork now attaches to the Internet every
ten minutes; and the just-released measurement of computers reachable
via the Internet exceeds two million.




However, the amount of costs the NSF now picks up is a
minor part of the Internet, essentially irrelevant compared to other
factors, and disappearing in a few months as NSFNet goes away
and the U.S. backbone traffic shifts to the existing commercial
internet backbone providers.




Internet use is exploding because:




1) institutions (commercial, academic, and governmental)  purchase the
   connectivity for their staff - making the per user cost very low;




2) commercial providers - ranging from local access Internet kiosks to
   800 dialup services - are offering mass market connectivity at low
   flat rates;




3) a "Sender Keep All" accounting practice where customers and providers
   purchase by flat-rate bandwidths at all levels of the providing chain;




4) inherent very low cost of the technologies employed;




5) flexibility, scalability, and robustness of the architecture and
   connectivity so that remote and "infrastructure disadvantaged"
   people and countries can be part of the Internet matrix.




6) an extraordinary good global developmental process that is user
   driven, fast, innovative, and produces workable standards,
   code, and services;




7) the basic software is bundled with virtually every computer
   operating system;  and good, very user-friendly, third party software
   for Internet services is now available;




8) sheer size and dynamics - encompassing an estimated 20 million
   users, more than 8 trillion bytes of traffic a month, access to
   several trillion bytes of public information, and collaboration
   among active professionals and institutions in virtually every
   business, educational and governmental sector.  Nearly every messaging
   network that exists, now has an Internet gateway.








cordially,




(Tony)
Vice-President
Internet Society
Reston VA USA