Internet Passes Quietly Into Private Hands
By Reid Kanaley
November 3, 1994
Sprint Corp. and three other firms Tuesday took over management of a large gateway into the Internet from the National Science Foundation. The transfer marked the government's phenomenal success in building the information superhighway.
A key step to privatizing the global computer network passed without fanfare inside a squat concrete building in Pennsauken, N.J. There, Sprint activated a computer interchange, called a network access point (NAP), where separate computer networks can link together to exchange electronic mail and other data.
Over the next five months, the four private NAPs will take over computer traffic now channeled through a system of telephone cables, called NSFnet, that serves as a conduit into the Internet for about 2,000 universities and research institutions.
The network, built and nurtured with an estimated $121 million in federal funds, was in many ways a victim of its own success.
The explosive growth of other networks that patched onto it had left the NSFnet as just one among many hundreds of Internet providers in the global web.
"NSFnet served its role, and it's done, and it's time to get on," Joel Maloff, a prominent Internet service consultant, said Tuesday. While some avid Internet surfers fear that privatization will mean higher costs and less access on the Internet, Maloff and others suggest that fierce competition has the Internet on the edge of a new wave of cost reductions.
Internet is the name given to a highly decentralized web of computer networks that link tens of millions of computers worldwide for the sharing of electronic mail, research, and an expanding array of communication and entertainment services.
Maloff said the business of providing Internet access, worth an annual $47 million less than two years ago, is tripling every year. He predicts it will be a $1 billion business by early 1996.
"The federal government actually did a pretty good job of developing a market and rolling it out to commercial services; they essentially became a market-maker," said Bob Doyle, the Sprint product manager who is overseeing the transition at the Pennsauken facility.
Doyle said his company chose Pennsauken because the township already had a major facility for Sprint's international telephone connections and its own Internet service, SprintLink.
Sprint and three other companies that have set up network access points will get about $200,000 each from the government to facilitate the transition. The companies will try to make money by signing on customers, particularly other networks that have stepped in to sell Internet access to the universities and research institutions that used the old NSF system. The customers would pay Sprint for access to the larger network of computers to which Sprint's relay station is linked.
The other new access points are operated by Pacific Bell in San Francisco, Ameritech in Chicago, and Metropolitan Fiber Systems Inc. in Washington. For the time being, they will augment the federally funded exchanges still operating at research sites around the nation.
If all goes according to plan, by April "the NSF backbone will no longer be needed," according to Don Mitchell, staff associate for the foundation's division on networking and communication research and infrastructure.
"There will not be a government-provided infrastructure once this transition is complete," Mitchell said.
To individual computer users, the transition is supposed to be seamless. "Everybody's goal," said Doyle, "is to provide ubiquitous connectivity to end-users. If somebody wants to connect to the Internet, they expect to get anywhere on the Internet. They don't care how that happens."
Beth Gaston, an NSF spokeswoman, said costs for most institutions formerly connected to the NSF network are estimated to rise by about $1,000 per year for the next four years. "Most institutions, it's not going to hurt them terribly," Gaston said.
"I see it (the Internet) as a tool for democracy, and, as such, it needs a little protection," said Marsha Woodbury, a graduate student in computer-aided instruction at the University of Illinois and a board member of Computer Professionals for Social Responsibility. Woodbury's fear is that the commercialization of Internet will drive the price of access beyond the means of many of the network's current users.
But David Farber, a computer science professor at the University of Pennsylvania and a board member at the Electronic Frontier Foundation, said: "The Internet has been being privatized for a long time; this is nothing new.
"What most people are worrying about is how they're going to pay - by the drink, or for all they can eat," Farber said. But he suggested that the impact on most large institutions will be minimal. He said the University of Pennsylvania, for example, has been paying more than $100,000 a year for NSFnet access.
"The people that may get affected will be the small schools that may get free access now," he said. "But NSF has a pot of money to transition over that bump."
In the meantime, said Doyle, "what you have right now is considerable competition among service providers. I'm not worried about anyone raising prices, period."
Maloff contended that market forces would drive prices down.
"It's a consumer's dream," he said. "We're in for a great time."