[1710] in Commercialization & Privatization of the Internet

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Re: natural monopolies

daemon@ATHENA.MIT.EDU (Karl Denninger)
Fri Dec 13 06:06:36 1991

From: karl@ddsw1.mcs.com (Karl Denninger)
To: SEAN@SDG.DRA.COM (Sean Donelan)
Date: Fri, 13 Dec 91 1:08:54 CST
Cc: com-priv@psi.com
In-Reply-To: <911212002204.926e@SDG.DRA.COM>; from "Sean Donelan" at Dec 12, 91 12:22 am

> 
> If you go with PSI or Alternet you have to pay full freight.  But if
> you go with ANS, NSF picks up a healthy chunk of the costs.  At the last
> MIDNET meeting I attended the fact that NSF had already paid to bring the
> ANS connection to MIDNET made choosing ANS more attractive.  The alternative
> meant paying (at a minimum) for a cross-country circuit to a ?IXs.  Signing
> an agreement with ANS was essentially "free" for MIDNET.
> 
> So you are correct that there are no "natural monopolies," but an academic
> site is faced with this choice:
> 
>     ANS/NSF connection:   $0
>     Any other carrier:  $$$$
> 
> What do you think the market survivability of the "other carriers" is?
> --
> Sean Donelan, Data Research Associates, Inc, St. Louis, MO
> Domain: sean@sdg.dra.com, Voice: (Work) +1 314-432-1100

IMHO, the Government shouldn't fund either of these cases, or it should fund
BOTH of them.

There are two separate issues:

1)	Why award the money.

2)	How to assure that the money is spent reasonably for the purpose
	that it is supposed to be used for.

I won't debate the first issue; I have mixed feelings on it.

Point #2 is defined by the >requirements< of the network to be connected
through or to, not the provider's name.  

It is thus proper to specify technical details (ie: speed of connection,
up-time guarantees and compensation for breaches, round-trip "ping" time
perhaps, and connectivity to other sites or networks.   It is proper to
specify the kinds of packets you expect to be routed and how (ie: IP
protocols, IPX, SNA, etc) as well as the cost basis (ie: bandwidth of
connection, actual packet usage, etc).

Why hasn't this path been followed?  

-- 
Karl Denninger (karl@ddsw1.MCS.COM, <well-connected>!ddsw1!karl)
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