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On Thu, 13 Apr 1995, Todd Belton wrote:

> Jim_Moody@pcworld.com wrote:
> :      The original purpose for the Internet was not to provide a generalized 
> :      communication playground for the entire world population.  I suspect 
> :      very strongly that if the commercial world hadn't found the Net, that 
> :      either additional tariffs would have been established to pay for 
> :      access to the Net and/or the requirements for Net membership would 
> :      have been made more stringent.
The internet was originally a military operation, an invention of the DoD 
Advanced Research Projects Agency (ARPA).  When the work was 
declassified, the schools saw it as a cheap way to pass research between 
schools like MIT and Berkely.  Alumni of these fine universities, and 
others convinced their companies to sponsor TCP/IP routes through their 
corporate links.  DEC, IBM, SUN, and AT&T were big contributors.

The universities also found that companies would sponsor their capital 
costs (unix machines, routers, switches...) in exchange for dial-up 
connections and log in accounts.  Again, this was mainly driven by 
graduates who didn't want to give up internet access.  Corporations would 
even contribute software through the GPL, GNU, Andrew, and CMU 
development efforts, in exchange for internet access.

This quid pro quo arrangement raised concerns when banks, insurance 
companies, and large corporations started circulating large amounts of 
encrypted transactions through the internet links instead of purchasing 
new dedicated links.  It was at this point that the National Science 
Foundation was established for the purpose of restricting the use of the 
internet to educational, military, and "research".  The government paid 
for the exclusive use of the "BackBone", which had previously been a 
series of parallel links provided by other companies.

In 1990, the Bush administration mandated that the NSF and the internet 
should be self-supporting (which they had been up to the foundation of 
the NSF).  Uncle Sam didn't like paying the telephone bill.  As a result, 
the "Supernets" were given permission to accept commercial traffic.  Most 
were operated out of "Closets" in Universities.

In 1993, vendors, seeking a market for "Frame Relay" technology, found 
that CISCO routers, coupled with line cards reduced the resistance to the 
new technology.  Since TCP/IP was easily obtained, Customers familiar 
with UNIX quickly accepted it.  By 1993, IBM was scrambling to support 
TCP/IP on all platforms and all applications.  In 1994, MCI won the bid to 
carry "Internet", with the provision that it could use the same links for 
commercial traffic in a "Commercial Internet", now known as CIX. (I had 
some personal influence on this).

Rival carriers quickly created rival "Internets", and as MCI forged 
alliances with British Telecomm, AOL, Prodigy, and others, the various 
internets were coupled via strategicly placed routers (The last remnant 
of the "NSFNET").  The only significant hold-out is AT&T.  While AT&T 
does offer internet service, it has been attempting to promote ATM as an 
"end to end" protocol.  Most companies just use ATM to connect their 
TCP/IP routers.

The final switch was the development of software which made it possible 
for PCs equipped with "Sound Cards" to transfer compressed audio across 
the internet as "Digital Telephones".  MCI offers voice mail and 
messaging service via TCP/IP as well.

> I *pay* a tariff for access to the net.  It goes to my Internet provider.
> Now, I have not said, nor did I mean to imply, that any additional fees
> beyond that are automatically unreasonable - just that I'm skeptical
> about value-added for those additional fees.  Somebody earlier drew
> the analogy between basic and premium cable television.  I'm already
> paying the basic.  I have not yet seen a "premium channel" worth the fee,
> and I am belligerent when confronted with the thought of losing what
> I consider to be part of the basic package.

Up until now, when you used Compuserve, AOL, or Prodigy (among others), 
you paid for both the telecommunications charges and the Server Services.
Today, local "Pointe of Presence" operators, often converted "bullitin 
boards" are finding that customers who never paid fees for FIDO will 
happily pay $40-60/month for "Unlimited" internet usage.  They contract 
for a dedicated link with the carrier, and put up 20 phone lines for modems.
This is especially popular in areas like New Jersey where the local 
telephone charges run 1 cent/mile/minute (evenings) or 5 
cents/mile/minute (prime).

Anyone with any kind of internet access on 24/7 basis can put up a 
server.  This means that there can be a great deal of competition.

Where the "Superboards" like Compuserve and AOL can still play a powerful 
role is in the form of 3rd party authentication and royalty 
distribution.  The subscriber would be willing to pay $30-40 for a 
"subscription" that included access to up to 4000 pages/month.  
Especially if it included the ability to pay for purchases on-line.  
Compuserve could use a "secured" internet link to the banks, coupled with 
encryption, to authorize charges.  The commercial boards can use publicly 
available technologies (NIS, Kerberos...) to provide "Security" for the 
entire internet.  The biggest roadblock may be the accounting and billing 
system.

> :      I think that if the Net is to develop to its full potential it's going 
> :      to require investment.  In the present and forseeable political 
> :      climate it's hard to imagine lots of government dollars being put into 
> :      the Net.  So lets stop whining about the nasty old commercial 
> :      pollution that's taking place, and see how we can take advantage of 
> :      it.
Private enterprise has been providing 90% of the real investment for the 
internet all along.  The government only "pays" for those pieces which 
are too strategically "sensitive" to give to one of several competitors.
Without token government "funding", MCI might "Unplug" AT&T from the 
internet.

Commercial internet users actually pay a premium to be part of CIX.  The 
entry fee is $700/month.  Worth it if you are a stock broker or a bank 
like Morgan Stanley who sends 50 meg/day (very old number) over CIX.

> I agree that the gov/mil money that was the net backbone for so many
> years is fading away (and in some cases, the literal backbones are
> vanishing too).  But nine tenths of us are already here through
> commercial services, yes? So that point was rather moot some time ago.
The "Internet" has been fully self-supporting for almost 5 years now.  
The links used by the military and NSF are funded by "Token" payments 
heavily subsidised by business and commercial users.  MCI doesn't want to 
loose commercial access to national archives.  The big users these days 
include the SEC (Edgar) and the IRS.

> Please note that I'm not arguing that ACCESS to the net should be free.
> Someone's gotta pay for it, and if I'm a consumer of the resource (which
> I am), then I should pay.  I am merely dickering over what I get for my
> buck ....

What you get for your $30 is up to 1400 bytes/second worth of
telecommunications data, for up to 40 hours/month, or about 200
megabytes/month.  Or, your buck buys 6 megabytes of bandwidth.  If you
want to use that downloading LINUX instead of buying the CD, or you want
to download 10K filings, you don't need to pay a penny more.  If you want
to see the centerfolds from next months issue of Penthouse, you will have
to pay more (about $30/year).  Dow Jones news runs about $40/month. 

By way, for $1000/month, you can get 120 gigabytes (T1 "low" traffic) 
which means your buck gets you 129 megabytes of bandwidth (about 20 times 
more).  DS3 Service is about 1gig/dollar.  See why internet is so cheap!

> :      It strikes me that a lot of the talk that goes on here is pretty 
> :      hypocritical.  On one had I hear people holding forth about universal 
> :      access, and in the next breath I hear them say "Except for people from 
> :      AOL, Prodigy, CompuServe, business organizations, commerical sites 
> :      .... etc etc".  That kind of talk sounds pretty elitist to me.  
Currently, you can buy a telephone for $9, pay $20/month and call anyone 
within about one mile, in Colorado, you can call anyone within 60 miles.

If you want to call a friend, you don't have to pay any extra.  If you 
want to call Microsoft Customer Support, you need to pay an extra $2/minute
to Microsoft.  You can dial the 1-800 number and give them your Visa Card,
or you can dial the 1-900 number and have it included with your telephone 
bill.  You would use the 900 number from home and the credit card from 
the hotel phone.

Businesses conduct commerce buy phone with relative surity that not too 
many people are listening in (Telephones are easier to tap than internet 
feeds).  The phone can also be used to order merchandise, send fax 
orders, and even connect computers (what a novel idea!).  You don't 
expect the $20/month to include that sweater you ordered from "land's 
end" do you?

Business buy their phones in bulk just as I described above.  The use a 
PBX to share 24 lines among 30-300 users.  They actually pay "per megabit"
enough to subsidize the consumer phone.  This is sensible because if 
consumers didn't have telephones, they couldn't do business outside of 
their local neighborhoods.  Products like cars, computers, and stereos 
could not be marketed without telecommunications.

> I fuss about AOL, Prodigy, CIS in relation to Internet because I feel that
> they're billing themselves as the end-all-be-all of Internet providers
> when in actuality they're pretty clueless about Internet.  I have nothing
> against the USERS of those systems.  If that's the only way you can get
> here, so be it.  (Let me direct you to the PDIAL list, though ....)

AOL, Prodigy, and CIS have always been the "star players" in an industry 
dominated by servers stuck in the back closets of retail stores.  For 
every hour spent on Prodigy, 10 are spent on "local" boards.  The days of 
"fidonet" have given way to "PPP/Slip" and "Pop3 internet e-mail".
Most of these private boards now offer access to the Internet via a Linux 
server made out of "Junk" PC/386s and 5 1/4" 1Gig "Sun" SCSI drives.  
Since you don't need graphics, the whole thing takes up 4 meg of disk and 
4 meg of ram to support 100 users.

Giving http or telnet access to the internet can increase your subscriber 
base from 100 to 1000.  Many times you have to call and give them your 
credit card over the phone.  Sometimes you even have to mail them a fax 
of your driver's license (Adult Boards).  With over 1 million web pages 
available on about 100,000 servers, you might find establishing accounts 
with everyone a bit tedious, and expensive (even at $10/year it would 
cost $1 million).  You might find a few you really like and would use, 
but not until AFTER you've paid your money.

> -todd

	Rex Ballard.

From rballard@cnj.digex.net Mon Apr 24 18:38:59 1995
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