[ih] History of the Economics of the Internet?

Wed Jul 29 08:35:13 PDT 2026

vis-a-vis "... looking forward to the completely unobvious, surprising
outcomes. At least I think I am… if it’s on the enjoyable side of “no one
ever anticipated that” rather than the “oh shit” side."

IIRC, Bob Kahn (then as the director of ARPA-IPTO) once gave a talk about
the ARPANET and the budding Internet R&D of the day in which he stated that
the “no one ever anticipated" things were the most interesting outcome of
the ARPANET... and that one of the no one ever anticipated, completely
unobvious, surprising outcomes things was email.

g

On Wed, Jul 29, 2026 at 6:34 AM John Romkey via Internet-history <
internet-history at elists.isoc.org> wrote:

>
> > On Jul 28, 2026, at 5:35 PM, Brian E Carpenter via Internet-history <
> internet-history at elists.isoc.org> wrote:
> >
> > 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?
>
> For domain names, scarcity. This was unintentionally encoded in the system
> by having only a handful of TLDs at the start, with .com the most
> recognized and therefore most valuable. Even if businesses hadn’t come
> online “smith.com” or “sex.com” would have had a lot of competition for
> them and therefore value.
>
> Advertising was the existing dominant model in broadcast publishing
> already, and “the Internet” fit that model quite well.
>
> What were the viable alternatives?
>
> Subscriptions are hard to bootstrap and would have been especially
> difficult when the Internet was new. There also wasn’t the infrastructure
> to support them back then as there is now. And they suffer in the face of
> “free” services although obviously several models survive along side one
> another today.
>
> > - how has the design of BGP4 affected carrier economics (competition vs
> collaboration)?
> > - why did flat-rate charging become the dominant model for ISPs?
>
> I remember John Curran predicting this in the early 90s (I think it was
> the early 90s anyway), basically it can cost more to meter than it’s worth.
> At some point the cost per bit becomes noise.
>
> > - what fractions of application layer revenue come from advertising,
> subscriptions, pay-per-view, etc?
> > - why does anyone trust cryptocurrency?
>
> I’m sure you could write a PhD thesis in psychology about this one… but at
> this point it’s along the lines of why does anyone trust the stock market?
> Most coins are essentially gambling these days. Libertarian and anarchist
> philosophies, distrust of the government, cult of personality, gold rush
> fever.  Not to be too dour but the general population hasn’t really
> demonstrated that it’s great at critical thinking.
>
> > - how will AI change Internet economics?
>
> There are some obvious things, like undermining advertising by vomiting up
> so much content that its value approaches zero and further pollutes the
> ability to actually find anything.
>
> I’m looking forward to the completely unobvious, surprising outcomes. At
> least I think I am… if it’s on the enjoyable side of “no one ever
> anticipated that” rather than the “oh shit” side.
>         - john romkey
>
>
> >
> > 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
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living as The Truth is True