📄 rfc1192.txt
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Network Working Working Group B. Kahin, EditorRequest for Comments: 1192 Harvard November 1990 Commercialization of the Internet Summary ReportStatus of this Memo This memo is based on a workshop held by the Science, Technology and Public Policy Program of the John F. Kennedy School of Government, Harvard University, March 1-3, 1990. This memo provides information for the Internet community. It does not specify any standard. Distribution of this memo is unlimited.Introduction "The networks of Stages 2 and 3 will be implemented and operated so that they can become commercialized; industry will then be able to supplant the government in supplying these network services." -- Federal Research Internet Coordinating Committee, Program Plan for the National Research and Education Network, May 23, 1989, pp. 4-5. "The NREN should be the prototype of a new national information infrastructure which could be available to every home, office and factory. Wherever information is used, from manufacturing to high- definition home video entertainment, and most particularly in education, the country will benefit from deployment of this technology.... The corresponding ease of inter-computer communication will then provide the benefits associated with the NREN to the entire nation, improving the productivity of all information- handling activities. To achieve this end, the deployment of the Stage 3 NREN will include a specific, structured process resulting in transition of the network from a government operation a commercial service." -- Office of Science and Technology Policy, The Federal High Performance Computing Program, September 8, 1989, pp. 32, 35. "The National Science Foundation shall, in cooperation with the Department of Defense, the Department of Energy, the Department of Commerce, the National Aeronautics and Space Administration, and other appropriate agencies, provide for the establishment of a national multi-gigabit-per-second research and education computer network by 1996, to be known as the National Research and Education Network, which shall: (1) link government, industry, and the educationKahin [Page 1]RFC 1192 Commercialization of the Internet November 1990 community; .... (6) be established in a manner which fosters and maintains competition and private sector investment in high speed data networking within the telecommunications industry; .... (8) be phased out when commercial networks can meet the networking needs of American researchers." -- S. 1067, 101st Congress, 2nd Session, as marked up April 3, 1990 ["High-Performance Computing Act of 1990"], Title II, Section 201.Background This report is based on a workshop held at the John F. Kennedy School of Government, Harvard University March 1-3, 1990, by the Harvard Science, Technology and Public Policy Program. Sponsored by the National Science Foundation and the U.S. Congress Office of Technology Assessment, the workshop was designed to explore the issues involved in the commercialization of the Internet, including the envisioned National Research and Education Network (NREN). Rather than recapitulate the discussion at the workshop, this report attempts to synthesize the issues for the benefit of those not present at the workshop. It is intended for readers familiar with the general landscape of the Internet, the NSFNET, and proposals and plans for the NREN. At the workshop, Stephen Wolff, Director of the NSF Division of Networking and Communications Research and Infrastructure, distinguished "commercialization" and "privatization" on the basis of his experience developing policy for the NSFNET. He defined commercialization as permitting commercial users and providers to access and use Internet facilities and services and privatization as the elimination of the federal role in providing or subsidizing network services. In principle, privatization could be achieved by shifting the federal subsidy from network providers to users, thus spurring private sector investment in network services. Creation of a market for private vendors would in turn defuse concerns about acceptable use and commercialization.Commercialization and Privatization Commercialization. In the past, many companies were connected to the old ARPANET when it was entirely underwritten by the federal government. Now, corporate R&D facilities are already connected to, and are sometimes voting members of, mid-level networks. There are mail connections from the Internet to commercial services such asKahin [Page 2]RFC 1192 Commercialization of the Internet November 1990 MCIMAIL, SprintMail, and Compuserve. DASnet provides a commercial mail gateway to and from the Internet and commercial mail services. UUNET, a nonprofit corporation, markets TCP/IP services (Alternet) with access to the Internet as well as mail services. Performance Systems International (PSI), a startup company which now operates NYSERNET (the New York State regional network, partially funded by NSF) is aggressively marketing Internet-connected TCP/IP services on the East and West Coasts. RLG is selling access to its RLIN database over the Internet directly to end users. Other fee-based services include Clarinet, a private news filtering service, and FAST, a non- profit parts brokering service. However, in all these cases, any use of the NSFNET backbone must, in principle, support the "purpose of the NSFNET." Under the draft acceptable use policy in effect from 1988 to mid- 1990, use of the NSFNET backbone had to support the purpose of "scientific research and other scholarly activities." The interim policy promulgated in June 1990 is the same, except that the purpose of the NSFNET is now "to support research and education in and among academic institutions in the U.S. by access to unique resources and the opportunity for collaborative work." Despite this limitation, use of the NSFNET backbone has been growing at 15-20% per month or more, and there are regular requests for access by commercial services. Even though such services may, directly or indirectly, support the purposes of the NSFNET, they raise prospects of overburdening network resources and unfair competition with private providers of network services (notably the public X.25 packet- switched networks, such as SprintNet and Tymnet). Privatization. In some respects, the Internet is already substantially privatized. The physical circuits are owned by the private sector, and the logical networks are usually managed and operated by the private sector. The nonprofit regional networks of the NSFNET increasingly contract out routine operations, including network information centers, while retaining control of policy and planning functions. This helps develop expertise, resources, and competition in the private sector and so facilitates the development of similar commercial services. In the case of NSFNET, the annual federal investment covers only a minor part of the backbone and the regional networks. Although the NSFNET backbone is operated as a cooperative agreement between NSF and Merit, the Michigan higher education network, NSF contributes less than $3 million of approximately $10 million in annual costs. The State of Michigan Strategic Fund contributes $1 million and the balance is covered by contributed services from the subcontractors to Merit, IBM and MCI.Kahin [Page 3]RFC 1192 Commercialization of the Internet November 1990 At the regional level, NSF provides approximately 40% of the operating costs of the mid-level networks it funds -- with the remainder covered by membership and connection fees, funding from state governments, and in-kind contributions. This calculation does not include a number of authorized networks (e.g., PREPnet, and, until recently, NEARnet and CERFnet) that receive no NSF funding. However, NSF also funds institutional connections to the NSFNET, which includes payments by the institution to the regional network. Other agencies (DOD, NASA, and DOE) have also funded some connections to NSFNET networks for the benefit of their respective research communities -- and have occasionally funded the networks directly. Finally, the campus-level networks at academic institutions probably represent a perhaps 7-10 times larger annual investment than the mid-level networks and the backbone together, yet there is no federal funding program at this level. Furthermore, since these local networks must ordinarily be built by the institution rather than leased, there is an additional capitalization cost incurred by the institutions, which, annualized and aggregated, is perhaps another 20-50 times the annual costs of the mid-level and backbone networks. (These figures are the roughest of estimates, intended only for illustration.)The NSFNET Backbone as a Free Good Whereas the NSF funding of mid-level networks varies greatly -- from 0% to 75% -- the backbone is available as a free good to the NSF- funded mid-level networks. It is also used free of charge by other authorized networks, including networks not considered part of NSFNET: CSNET, BITNET, UUNET, and PSI, as well as the research networks of other federal agencies. As noted, their use of the backbone is in principle limited to the support of academic research and education. Through their use of the NSFNET backbone, these networks appear to be enjoying a subsidy from NSF -- and from IBM, MCI, and the State of Michigan. BITNET and some agency networks even use the backbone for their internal traffic. Nonetheless, these other networks generally add value to NSFNET for NSFNET users and regional networks insofar as all networks benefit from access to each other's users and resources. However, small or startup networks generally bring in fewer network- based resources, so one side may benefit more than the other. To the extent that the mail traffic is predominantly mailing lists (or other information resources) originating on one network, questions of imbalance and implicit subsidy arise. For example, because of the mailing lists available without charge on the Internet, three times as much traffic runs over the mail gateway from the Internet toKahin [Page 4]RFC 1192 Commercialization of the Internet November 1990 MCIMAIL as from MCIMAIL to the Internet. This pattern is reinforced by the sender-pays fee structure of MCIMAIL, which discourages mailing list distribution from within MCIMAIL. The impact of such imbalances is not clear. For now, the capacity of the NSFNET backbone is staying ahead of demand: It jumped from 56 Kbps to 1.544 Mbps (T-1) in 1988 and will go to 45 Mbps over the next year. But NSF is concerned about a possible recurrence of the congestion which drove users off the NSFNET prior to the 1988 upgrade. Given the tripling of campus-level connections over the past year, continued growth in users at each site, the parade of new resources available over the network, and, especially, the development of high-bandwidth uses, there is reason to fear that demand may again overwhelm capacity.
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