[ih] History of the Economics of the Internet?

[Brian E Carpenter]

I think there are some really interesting economic questions, such as:

- why did advertising, and charging for domain names, become major factors in Internet economics?
- how has the design of BGP4 affected carrier economics (competition vs collaboration)?
- why did flat-rate charging become the dominant model for ISPs?
- what fractions of application layer revenue come from advertising, subscriptions, pay-per-view, etc?
- why does anyone trust cryptocurrency?
- how will AI change Internet economics?

I think email and spam are actually minor, economically speaking.

Regards/Ngā mihi
    Brian Carpenter

On 29-Jul-26 08:39, Jack Haverty via Internet-history wrote:
> On 7/25/26 15:39, Ofer Inbar via Internet-history wrote:
>> On Sat, Jul 18, 2026 at 12:51:04PM -0700,
>> Jack Haverty via Internet-history <internet-history at elists.isoc.org> wrote:
>>> Over the last decade or two, I've suggested, several times, to
>>> several ISOC administrations, that ISOC "walk the walk" with email
>>> by serving as a prominent example of "how to do email right".   That
>>> of course might require policies to possibly be changed, technical
>>> flaws to be addressed, educational efforts, and even perhaps
>>> governments' actions.
>>>
>>> Most Internet users today likely experience things like phishing
>>> attacks, emails with forged sources, and other such effects that
>>> make email untrustworthy in their views.   Most of the Internet
>>> users have no idea how to protect themselves from such attacks.
>>>    Most regulatory and government authorities seem to have no idea
>>> what, if anything, they can do about it.
>> A majority of younger Internet users (at least in the English speaking
>> world I'm familiar with) - perhaps not an overwhelming majority, but
>> quite certainly a majority - simply do not use email to communicate.
>> They use it to verify their address for accounts, they use it to check
>> for a specific thing that they know is going to be sent to them by
>> email and that they know they want to see, and most of the rest of the
>> time, they let their email pile up and they ignore nearly all of it.
>>
>> To actually stay in touch with friends, family, coworkers, groups
>> they're part of, etc. - all the things email used to be for - they
>> use messaging apps.  Discord, Facebook, Slack Instagram, and more
>> like that.  Or SMS/RCS phone texts.
>>
>> All of the various problems with email today, including the ones you
>> listed, are I think dwarfed by one big one that has caused this:
>> spam.  This includes both scattershot scam-oriented spam, but also
>> lots of lists that sign you up without asking permission.  You donate
>> to a political candidate, and some sleazy "grassroots" database starts
>> selling your address to loads of other campaigns of the same party.
>> You pay for a meal at a restaurant with your phone, enter the email
>> address for your receipt, and now not only are you on the email list
>> for that restaurant, but also the next cafe or ice cream place or
>> whatever where the payment system recognizes your card and offers
>> to email your receipt and you didn't notice the small checkbox to
>> opt out of signing up.  You RSVP to an event on some sleazy site like
>> eventbrite, and now you're on several mailing lists for similar events.
>>
>> The majority of email is assumed to be spam or otherwise irrelevant,
>> by people whose experience of email started after the explosion of
>> spam that I described above.  They never knew what it was like for
>> email to be relevant and worth checking, so they don't think of it
>> as relevant or worth checking.  Knowing this, they also don't think
>> it's a useful way to communicate with anyone they know.
>>     -- Cos
> 
> You're absolutely right.  The email world has fragmented into a gaggle
> of separate "messaging" services.  In the beginning, email was a
> universal service, and even "being on the 'net" meant that you had an
> ARPANET email address.  Even when other mail services were in use, e.g.,
> UUCP or even MCIMail, there were sometimes arcane ways to interoperate,
> using %, !, and the like to glue two messaging worlds together.   Today,
> there are lots of ways for people to communicate, and I've found few
> ways to make them work together.   The history of that evolution might
> be an interesting topic for some historian.
> 
> Spam is certainly an issue.  For history's benefit, spam was well known
> as an issue even in the early 1970s when email started on the ARPANET.
> Licklider at MIT pointed out (to me at least while we were implementing
> email) that every system needs some kind of "negative feedback" to be
> stable.   Engineers know this, whether they're building electronic stuff
> or steam engines a century ago.
> 
> Use of some resource, such as email, must have some "cost" associated
> with its use, to prevent rampant overuse.   We actually tried to
> introduce the notion of "stamps" to the develolping email standards in
> the 1970s to provide a form of negative feedback.  Even just a limit on
> the number of emails that one address could send over some time period
> would exert back pressure.
> 
> All such proposals were soundly rejected by the research community.  So
> no backpressure scheme was created and today it costs virtually nothing
> to send out hundreds or thousands of emails.   So corporations,
> politicians, charities, and entrepreneurs send them. Same with
> advertising, which does have a cost to the advertiser but little cost to
> the company injecting ads into web pages.  Most of such stuff would be
> considered spam by the recipients, to be scrolled past as quickly as you
> can.
> 
> This is all just one part of a larger History of Internet Economics, and
> it goes far beyond just email.  Yesterday I saw an article about the
> "dead internet theory" which characterizes the recent emergence of AI
> agents as disrupting the economics of the Internet as we've known it.
> See
> https://www.fastcompany.com/91579817/dead-internet-theory-is-real-web-agents
> if you're interested.   The economics of the Internet are now breaking
> again and no one knows what comes next.
> 
> For example, I recall hearing presentations at some conference in the
> early 1990s about "micropayments" and the technical ideas and progress
> which were currently being tested.  Yet today, we are all barraged with
> content that we can't access unless we subscribe to something.  Everyone
> wants a subscription and the continuous revenue stream it would bring -
> similar to the "all you can eat" philosophy sometimes used by
> restaurants if only for special events. Micropayments were touted as
> alternatives to subscriptions, so an Internet user could pay for one
> "meal" (article) at a time instead of committing to weeks or months of
> all-you-can-eat content.
> 
> What happened to micropayments?
> 
> Any economists out there?  Perhaps someone can relate the history and
> timeline of how the Internet Economy has evolved over the decades?   Is
> The Internet dying?
> 
> /Jack Haverty
> 
> 
> 
>