[ih] History of the Economics of the Internet?

[Craig Partridge]

Adding perspective on two points in this excellent note.


On Wed, Jul 29, 2026 at 7:34 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.
>
>
Which was ironic, as one of the major motivations for domain names was to
solve the problems of a flat namespace. In a flat space, there could only
be one "frodo" and domain names meant every sub-domain could have its own
"frodo".

Dredging my memory from discussions of the period, I would say the
expectation was that everyone was thinking in terms of universities (so
subdomains hanging off example.edu) and not enough about corporate names.
DNS also came well before the Web.


> > - 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.
>
>
While I'm quite sure my buddy John said this, there were several prophets
of flat rate charging at the time.  I think all the NSFNET regional
networks used it.  Steve Deering strongly pushed back against people who
suggested usage charging led to efficiency and would point out the effort
they put into metering wasn't worth it (and it shaped some of his IPv6
thinking).

Craig

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