[ih] NO "settlements" as part of Internet History

[Brian E Carpenter]

In my humble (non-American) opinion, some of the arguments made at that
time were very self-serving. I think that Guy Almes and Steve Goldstein
between them could explain better than me, but NSFnet always had an
acceptable use policy that (since it was taxpayer-funded) only allowed
"free" transit for traffic to or from a legitimate NSF user, i.e. one end
or both ends of a flow had to be a research site. Clearly the taxpayer
shouldn't pay for business-to-business traffic, and that fact was the
business case for creating CIX.

Neither NSFnet nor CIX was free of course; they just had very different
funding sources. It was my understanding at the time that ANS CO+RE was
created precisely to avoid cross-subsidy from NSF money. They did have
the advantage of knowledge transfer.

(All of this was of intense interest to us at CERN as we hosted a
transatlantic link to NSFnet and we too had to ensure that the NSFnet
AUP was respected. So we followed it pretty closely.)

Of course the idea that there are no settlements in the Internet is
a bit ridiculous. There are no settlements per "call" but connections
to transit providers and/or IXPs cost money.

Regards
   Brian Carpenter

On 11-Sep-20 12:21, the keyboard of geoff goodfellow via Internet-history wrote:
> On Thu, Sep 10, 2020 at 10:42 AM *Jack Haverty via Internet-history
> <internet-history at elists.isoc.org <internet-history at elists.isoc.org>> wrote*
> :
> 
>> CCITT was working on X.25, and creating X.75, to interconnect their
>> networks.  It was a natural evolution of the PTT's prior interconnection
>> of their telephone networks.   Later, as DDN marched down the X.25 path,
>> the subsequent government Internet might have ended up based on
>> X.25/X.75.   If it worked.
>>
> 
> part and parcel of the X.25 and X.75 networking shibboleth was the notion
> of "settlements" -- just like with the PTT's interconnection of their
> telephone networks -- where The Fee for/of Transit was split along a
> "calls" participants/networks transited.
> 
> IIRC, Advanced Network and Services (ANS) tried to "imprint" the
> settlements model on the fledgling Internet -- with them In The Middle
> collecting a fee for transit (for commercial traffic) between networks as
> well as for interconnection with The Budding commercial Internet upstarts
> (PSI, ALTERNET, etc.) the resulting in the founding of the CIX, viz.:
> 
> 
> *Data Network Raises Monopoly Fear*
> By JOHN MARKOFF
> The New York Times
> December 19, 1991
> http://www.nytimes.com/1991
> /12/19/business/data-network-raises-monopoly-fear.html
> 
> Soon after President Bush signed legislation calling for the creation of a
> nationwide computer data "superhighway," a debate has erupted over whether
> the Government gave an unfair advantage to a joint venture of I.B.M. MCI
> that built and manages a key part of the network.
> 
> The venture, known as Advanced Network and Services, manages a network
> called NSFnet, which connects hundreds of research centers and
> universities. NSFnet also manages links to dozens of other countries. All
> these networks are collectively known as Internet.
> 
> Some private competitors say Advanced Network and Services uses its favored
> position to squeeze them out of the data-transmission market by
> establishing rules that make it difficult to connect to NSFnet.
> 
> *Traffic Has Doubled*
> 
> NSFnet was founded by the National Science Foundation, a Federal agency,
> and is composed of leased telephone lines that link special computers
> called routers, which transmit packages of data to three million users in
> 33 countries. Data traffic over the NSFnet backbone has doubled in the last
> year.
> 
> The Government wants to develop a national data highway for electronic
> commerce, digital video transmissions to homes and vast electronic
> libraries that could be drawn on by the nation's schools.
> 
> Advanced Network and Services, based in Elmsford, N.Y., was set up last
> year as a nonprofit corporation with $10 million from the International
> Business Machines Corporation and the MCI Communications Corporation.
> Earlier this year it set up a for-profit subsidiary, called ANS CO+RE
> (pronounced core), to sell computer network services. That led some
> competitors to complain that Advanced Network and Services would be able to
> compete unfairly because of its arrangement with the Government.
> 
> *Fear Loss of Innovation*
> 
> People involved in planning for a national data network say it is essential
> to provide for fair competition, which will lead rival companies to offer
> creative and entrepreneurial services in the hope of building market share.
> Without competiton, they say, the Government will have created a monopoly
> that has little incentive to innovate.
> 
> "This is the first major communication business to be born under the
> deregulation era," said David Farber, a computer scientist at the
> University of Pennsylvania and a pioneer in data networking. "This hasn't
> happened since the growth of the telephone industry. You want it to be a
> business that doesn't repeat the errors of the past."
> 
> In recent years, the National Science Foundation has tried to shift its
> operations and ownership of NSFnet to Advanced Network and Services. And it
> will try to establish competition through contracts for networks to compete
> with NSFnet next year.
> 
> But there is no level playing field, complained William L. Schrader,
> president of Performance Systems International Inc., a Reston, Va., company
> that provides commercial data connections to Internet. He made public two
> letters between officials of Advanced Network and Services and the National
> Science Foundation that he said gave the company unfair control over access
> to the network. The result, he added, was that the Government turned over
> valuable public property to a private company.
> 
> "It's like taking a Federal park and giving it to K Mart," Mr. Schrader
> said. "It's not right, and it isn't going to stand."
> 
> Performance Systems and several other companies have set up an alternative
> to NSFnet, known as a CIX. Mr. Schrader said his company and the venture of
> I.B.M. and MCI were competing for the same customers but unlike his rival
> he lacked a Federal subsidy. He said he might ask the Internal Revenue
> Service to look at the business relationship between Advanced Network's
> nonprofit and for-profit operations.
> 
> *'Very Competitive Environment'*
> 
> Allan Weis, the president of Advanced Network, disputed that his company
> had an unfair advantage. "It's a very competitive environment right now,"
> he said.
> 
> At the National Science Foundation, Stephen Wolff, director of its
> networking division, said I.B.M. and MCI had overbuilt the network and were
> selling commercial service based on the excess capacity that was available.
> 
> A number of organizations are working informally to settle the dispute.
> 
> "I think it's a mess," said Mitchell D. Kapor, the founder of the Lotus
> Development Corporation and now head of the Electronic Frontier Foundation,
> a public-interest group focusing on public policy issues surrounding data
> networks. "Nobody should have an unfair advantage."
> 
>