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Internet and the 1996 Act

Internet and the 1996 Act. Impact of the Act on Internet evolution Internet as « inspiration ». NII prototype. new network paradigm inspired NII political program industrial policy ? “stimulate” (neither regulate nor litigate... yet) spin-offs from DARPA programs. Governance.

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Internet and the 1996 Act

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  1. Internet and the 1996 Act • Impact of the Act on Internet evolution • Internet as « inspiration »

  2. NII prototype • new network paradigm • inspired NII political program • industrial policy? • “stimulate” (neither regulate nor litigate... yet) • spin-offs from DARPA programs

  3. Governance • competition modalities (on what basis) • tariffs and pricing • interconnection • universal service / cross-subsidies

  4. User-driven Experimentation • infrastructure technologies • applications and services • path dependence

  5. Willingness to pay Demand:p=n(N-n) Supply Three equilibria: 1) Failure 2) Critical Mass 3) Network size Network size

  6. Internet adoption in comparative perspective

  7. History: 3 periods • Defense • Research • mass-medium

  8. Defense - ARPANET (1970s) • 1969: BBN wins RFP • Protocol (TCP/IP) and Gateways • Three basic applications • e-mail • file transfer (FTP) • remote login (Telnet)

  9. Research - NSFNet (1980s) • NSF backbone linking supercomputer centers • One backbone • Regionals: BARRnet, Merit, NYSernet • three dominant applications • Acceptable Use Policy (AUP) and commercialization: expanding visions • “privatisation” of NSFNet April 30, 1995

  10. Mass Medium (1990s) • New Structure • several nationwide backbones - National Service Providers (NSPs) • Thousands of Internet Service Providers (ISPs) • Network Access Points (NAPs)

  11. Emerging Industry Structure • 2-3 Backbone providers ?? • lots of ISPs for small customers • direct connection to NSPs for big customers

  12. Retail

  13. Wholesale

  14. New Governance, and its limits. • Service and Pricing structure • Best-effort delivery • Sender keep all • Flat fee pricing (binary logic) • BUT congestion, different service level requirements.

  15. New Governance (cont’d) • Interconnection and peering • Decentralized governance - Difference with phone network • Incentives for cooperation • Emerging tensions • Standard setting • Cooperative / democratic • IETF, IAB, • emerging tensions

  16. Four Key Success Factors • Expanding Community of Users • Users invent it • Pricing: Network’s binary logic • Decentralized governance

  17. Emerging Issues • Congestion • Peering • Broadband • Future of end-to-end

  18. Congestion • Local access and Backbone • Pricing solutions • Quality of Service

  19. Interconnection: Peering • From multilaterals to bilaterals • Peering vs. Transit • NAP Control • FCC approach (Kende) • Decentralized, cooperative approach was good because didn't require regulation • Assess market competition • Antitrust remedies if there is a problem

  20. How different from “old issues”? • industry structure (monopoly,...) • Natural Monopoly? • Tariffs, access charges and int’l settlements • Cross-subsidies • Innovation at the end

  21. Internet and Freedom: Jeffersonian myths • Internet can't be regulated • Tech • decentralized architecture • no single control point • cooperative governance • "routes around censorship" • Government has no "moral right" over new space (cyberspace) and no credible means of enforcement (Barlow)

  22. "Jeffersonian syndrome" • Political: direct democracy • Self-governing communities • Economic: Perfect markets

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