[1644] in Commercialization & Privatization of the Internet
Restraint of Trade
daemon@ATHENA.MIT.EDU (William Schrader)
Sun Dec 8 23:15:59 1991
Date: Sun, 8 Dec 91 23:13:34 -0500
From: wls@psi.com (William Schrader)
To: com-priv@psi.com
Many of you have asked privately for this: a 2-screen-brief of
my remarks and opinions on the NSF/ANS mis-steps.
In '86/'87, NSF conducted a legal procurement for a T1 network
facility. In subsequent steps, NSF migrated that network to a
T3 design that was not yet required but which gave the contract
and contractor much public visibility. NSF extended its
network facility to reach all potential regional networks.
Without public disclosure, NSF removed itself as owner of the
facility, substituting the contractor as owner. NSF allowed
the contractor to reorganize itself to be for-profit. NSF gave
the resultant for-profit company the exclusive right to sell
commercial clients access to the federal facility, competing
unfairly with others in the industry.
The for-profit issues its own goals and policies, purporting to
represent NSF policy, pressuring connected regionals to sign
additional agreements which limit their rights, cost nothing to
implement, and provide the for-profit with competitive advantage
in the future.
In short, the NSF effectively pumps vast sums of money into one
provider, and changes the rules of the game mid-play, setting
that provider up to compete unfairly with existing enterprise,
thereby disrupting a burgeoning industry. In legal jargon, this
is called "restraint of trade" and will result in monopoly
positioning for ANS.
These are my arguments, in brief.
To conclude, NSF program management has made serious errors
which have resulted in ANS enjoying an unfair and unnecessary
advantage. These mistakes need to be corrected.
Bill Schrader
