rfc1192.txt

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   organization -- and so its ability to reinvest retained earnings.

   Operation of the backbone on a for-profit basis would attract private
   investment and could be conducted with relative efficiency.  However,
   given the dominant position of the backbone, a for-profit operation
   could conceivably get entangled in complex antitrust, regulatory, and
   political struggles.  A nonprofit organization is not immune from
   such risks, but to the extent its users are represented in policy-
   making, tensions are more likely to get expressed and resolved
   internally.

   The status of backbone or regional networks within the Internet is
   entirely separate from the question of whether network services are
   metered and charged on a usage basis.  Confusion in this regard stems



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RFC 1192           Commercialization of the Internet       November 1990


   from the fact that the low-speed public data networks (SprintNet,
   TymNet), which are sometimes seen as competitive to Internet
   services, do bill on a connect-time basis.  However, these commercial
   services use X.25 connection-based packet-switching -- rather than
   the connectionless (datagram) TCP/IP packet-switching used on the
   Internet.  Internet services could conceivably be billed on per-
   packet basis, but the accounting overhead would be high and packets
   do not contain information about individual users.  At bottom, this
   is a marketing issue, and there is no evidence of any market for
   metered services -- except possibly among very small users.  The
   private suppliers, Alternet and PSI, both sell "pipes" not packets.

Privatization by Function

   As an alternative approach to encouraging privatization, Dr.  Wolff
   suggested barring mature services such as electronic mail from the
   subsidized network.  In particular, NSF could bar the mail and news
   protocols, SMTP and NNTP, from the backbone and thereby encourage
   private providers to offer a national mail backbone connecting the
   regional networks.  Implementation would not be trivial, but it would
   arguably help move the academic and research community toward the
   improved functionality of X.400 standards.  It would also reduce
   traffic over the backbone by about 30% -- although given continued
   growth in traffic, this would only buy two months of time.

   If mail were moved off the regional networks as well as off the
   NSFNET backbone, this would relieve the more critical congestion
   problem within certain regions.  But logistically, it would be more
   complicated since it would require diverting mail at perhaps a
   thousand institutional nodes rather than at one or two dozen regional
   nodes.  Politically, it would be difficult because NSF has
   traditionally recognized the autonomy of the regional networks it has
   funded, and the networks have been free to adopt their own usage
   guidelines.  And it would hurt the regional networks financially,
   especially the marginal networks most in need of NSF subsidies.
   Economies of scale are critical at the regional level, and the loss
   of mail would cause the networks to lose present and potential
   members.

The National Research and Education Network

   The initiative for a National Research and Education Network (NREN)
   raises a broader set of policy issues because of the potentially much
   larger set of users and diverse expectations concerning the scope and
   purpose of the NREN.  The decision to restyle what was originally
   described as a National Research Network to include education was an
   important political and strategic step.  However, this move to a
   broader purpose and constituency has made it all the more difficult



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   to limit the community of potential users -- and, by extension, the
   market for commercial services.  At the regional, and especially the
   state level, public networking initiatives may already encompass
   economic development, education at all levels, medical and public
   health services, and public libraries.

   The high bandwidth envisioned for the NREN suggests a growing
   distance between resource-intensive high-end uses and wide use of
   low-bandwidth services at low fixed prices.  The different demands
   placed on network resources by different kinds of services will
   likely lead to more sophisticated pricing structures, including
   usage-based pricing for production-quality high-bandwidth services.
   The need to relate such prices to costs incurred will in turn
   facilitate comparison and interconnection with services provided by
   commercial vendors.  This will happen first within and among
   metropolitan areas where diverse user needs, such as
   videoconferencing and medical imaging, combine to support the
   development of such services.

   As shown in Figures 1. and 2., the broadening of scope corresponds to
   a similar generalization of structure.  The path begins with
   mission-specific research activity organized within a single
   computer.  It ends with the development of a national or
   international infrastructure: a ubiquitous, orderly communications
   system that reflects and addresses all social needs and market
   demand, without being subject to artificial limitations on purpose or
   connection.  There is naturally tension between retaining the
   benefits of specialization and exclusivity and seeking the benefits
   of resource-sharing and economies of scale and scope.  But the
   development and growth of distributed computing and network
   technologies encourage fundamental structures to multiply and evolve
   as components of a generalized, heterogeneous infrastructure.  And
   the vision driving the NREN is the aggregation and maturing of a
   seamless market for specialized information and computing resources
   in a common, negotiable environment.  These resources have costs
   which are far greater than the NREN.  But the NREN can minimize the
   costs of access and spread the costs of creation across the widest
   universe of users.













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RFC 1192           Commercialization of the Internet       November 1990


Figure 1.  Generalization of Purpose:

   Discipline-Specific Research            CSNET, HEPnet, MFEnet

   General Research                        early NSFNET, "NRN"

   Research and Education                  BITNET, present NSFNET,
                                           early "NREN"

   Quasi-Public                            many regional networks,
                                           "NREN"

   National Infrastructure                 "commercialized NREN"

   _______________________________________________________________


Figure 2. Generalization of Structure:

   Computer                                time-sharing hosts

   Network                                 early ARPANET

   Internetwork                            ESNET, NSFNET (tiered)

   Multiple Internetworks                  present Internet

   Infrastructure                          "NREN"


Workshop Participants

   Rick Adams, UUNET
   Eric Aupperle, Merit
   Stanley Besen, RAND Corporation
   Lewis Branscomb, Harvard University
   Yale Braunstein, University of California, Berkeley
   Charles Brownstein, National Science Foundation
   Deborah Estrin, University of Southern California
   David Farber, University of Pennsylvania
   Darleen Fisher, National Science Foundation
   Thomas Fletcher, Harvard University
   Kenneth Flamm, Brookings Institution
   Lisa Heinz, U.S. Congress Office of Technology Assessment
   Fred Howlett, AT&T
   Brian Kahin, Harvard University
   Robert Kahn, Corporation for National Research Initiatives
   Kenneth King, EDUCOM



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   Kenneth Klingenstein, University of Colorado
   Joel Maloff, CICNet
   Bruce McConnell, Office of Management and Budget
   Jerry Mechling, Harvard University
   James Michalko, Research Libraries Group
   Elizabeth Miller, U.S. Congress Office of Technology Assessment
   Eli Noam, New York State Public Service Commission
   Eric Nussbaum, Bellcore
   Peter O'Neil, Digital Equipment Corporation
   Robert Powers, MCI
   Charla Rath, National Telecommunications and Information
                Administration, Department of Commerce
   Ira Richer, Defense Advanced Research Projects Agency
   William Schrader, Performance Systems International
   Howard Webber, Digital Equipment Corporation
   Allan Weis, IBM
   Stephen Wolff, National Science Foundation

Security Considerations

   Security issues are not discussed in this memo.

Author's Address

   Brian Kahin
   Director, Information Infrastructure Project
   Science, Technology & Public Program
   John F. Kennedy School of Government
   Harvard University

   Phone:  [phone]

   EMail:  [e-mail]


















Kahin                                                          [Page 13]