[2769] in Commercialization & Privatization of the Internet
Third Issue of COOK Report on Internet -> NREN out tonight
daemon@ATHENA.MIT.EDU (Gordon Cook)
Tue May 26 21:46:12 1992
To: com-priv@psi.com
Date: 26 May 92 21:01:25 EDT (Tue)
From: cook@tmn.com (Gordon Cook)
Message-From: Gordon Cook <cook@tmn.com>
The third issue of the COOK Report on Internet -> NREN is out.
The lead article: What Is ANS and ANS CO+RE? Incomplete Delaware
Corporate Filings Reveal Ambiguities
is based on the findings of a Friday trip to Dover Delaware to obtain ANS'
public records. The slightly edited conclusion of the nearly 5000 word
article follows.
_________________________
We apparently have a dual company in ANS. On the one hand, a would be
non-profit. On the other hand, a profit-making enterprise. Yet with the
delay to October 27 1991 in filing for 501 (c)(3) status, the status of
the "non-profit" has not been declared by the IRS. And with the failure of
the profit making enterprise to file it's annual report we know nothing
about its directors or affairs. In fact it seems incredibly sloppy --
given who these people are -- that they could be, as this is written,
roughly 85 days late in filing two required annual reports with the State
of Delaware. (The 1991 Reports for ANS and for ANS CO+RE).
Why am I saying this? Because the future of the National Research and
Education Network is at stake. The NREN will have a major impact on the
flow of information in this nation and on citizen's access thereto. A lot
is at stake. The public has a right to know the decisions that the
technocrats are making. The very declaration of ANS, Inc. as a non-profit
raises its record and actions to the highest standards of public scrutiny.
Of course it is speculation to wonder whether in taking a long time to
file for 501(c)(3) clearance with the IRS, ANS wanted to buy 27 months of
time free from the scrutiny that release of a Form 990 would entail.
However, because the existence of ANS has been controversial from the very
beginning, one would assume that they would be squeaky clean in all their
actions. When they also fail to file required Annual Reports - especially
given their resources - it does raise one's suspicions.
It seems reasonable to ask under the conditions outlined here whether
readers of the COOK Report would do business with this corporation? Surely
it is incumbent on the NSF to know with whom they are doing business? Now
the NSF will say with MERIT, Inc. not ANS. However, I would question
whether MERIT, Inc. can serve as a buffer for the NSF because MERIT, Inc.
afterall is one of the founding members of ANS.
Some Additional Questions
Does Congress know with whom it is dealing when it approvingly cites ANS'
role in the May 1991 Report on S217?
What is the rationale of the National Science Foundation when it pays ANS
founding member MERIT an extra $7 million dollars a year for a backbone
that apparently has yet to meet fully its advertised functionality? When
MERIT gets the check from the NSF does it pay ANS Inc. or ANS CO+RE? What
would be the benefits to ANS Inc of the first versus the second action?
When an ANS salesman makes a call on a Fortune 1000 company, does he
bill ANS or ANS CO+RE for his expenses? When the same salesman calls on
Harvard, whom does he bill? For purposes of accounting to the IRS what
counts as an ANS CO+RE connection to the network? According to information
released by MERIT, ANS recently connected J.P. Morgan, 60 Wall St, NY, NY
to the network. Do the funds from this connection go on the books of ANS,
Inc. or on the books of ANS CO+RE?
Who should be exercising "due diligence" regarding ANS? Congress? The
National Science Foundation? These are a few questions to which it would
be useful to know the answers.
There is a sense among some people who have been deeply immersed in these
developments that the outcome was pre- determined quite a while ago. Some
believe that the pre- determination was published in the pages of IEEE
Spectrum on February 1, 1988. There Gordon Bell, who had recently finished
a tour of duty at the National Science Foundation wrote with reference to
the proposed National Research Network:
"Both the executive and legislative branches of the Federal government are
simply incapable of setting up a line item to be funded and administered
either by an agency or inter agency group, even though the facility would
support the entire research and education community.
A radical approach though could work: select a private sector company to
manage and develop the network, and provide it with a budget, to which
every agency would contribute under NSF guidance. (Each would list its
support for the network as a single line item in its budget. Each would
relinquish control of its networks to the manager.) Assure the network
manager of steady support Q both fiscal and political Q for the first five
operating years or so of the network. And instruct the manager to devise a
plan for gradually shifting all operating costs to users. . . [T]he
national research network . . . could be funded in this fashion."
It appears that Gordon Bell was suggesting that the National Science
Foundation pick a winner for what has since become the NREN. The
Congressional Hearings of March 12, 1992 showed some of the problems that
this stance has created. Unfortunately problems that are still festering
seem to have been glossed over. The COOK Report believes that the NREN is
too important to be implemented behind closed doors.
A Postscript: As we were going to press Susan Eldred called back and
stated that ANS had asked its accounting firm to find out what had
happened to the Annual Reports. Asked about the Directors for CO+RE, she
said they were a subset of the 8 ANS Directors. When asked which of the
eight she stated that she would prefer not to say which. She did not
believe that ANS was recquired to make this information public.
A Preview
Discussion of Issues Raised by May 15th FNCAC Meeting to Be Featured in
July COOK Report.
The COOK Report has talked in depth with an attendee of the May 15, 1992
Federal Networking Council Advisory Committee meeting. From that
conversation it has compiled a 3000 word summary of the day long
discussions.
The picture that begins to emerge is disturbing. The meeting, postponed
from March 92, was called on such short notice that only 9 of the 21
members could attend.
A Byzantinely complex group of new HPCC committees, groups and task forces
working on key plans for the network was outlined. The NSF made plain
that it is more interested in its Advisory committees views on some
matters than on others. One FNCAC member apparently even complained that
the FNC management plan gave the Advisory Committee too much freedom ro
speak on on any networking issues rather than on just those which the FNC
requested the advice of its Advisory Committee!
Enough detail about Network Access Points emerged to show just how
nebulous the concept is. Mid-levels who care to connect to them will
apparently have to pay 100% of the connection cost by 1996. It does not
appear to be clear whether the cost of interconnection will be by size of
bit pipe or by ammount of traffic sent. When asked how much it would cost
a mid-level to hook to a Network access point, a representative of the FNC
replied that he hadn't a clue.
One of the most disturbing moments apparently came when a highly respected
employee of an entity that develops standards for the Public Switched
Telephone Network noted that he was hearing a rather far reaching plan for
data communications on a national level that would set precedents and
affect a range of users far beyond the boundaries of the NREN. Therefore
it should be reviewed by broad policy making organizations like the FCC
and perhaps the telecommunications sub committees of the Congress.
Apparently the only response to this concern was that the plan was only an
opportunity to connect and that there was nothing forcing the national
networks to do so. They could take it or leave it.
Issue 4 of the COOK Report will appear in about a month. It will feature
a discussion of what was learned at the FNCAC May 15th meeting. The
editor invites those who would like to have a part in that discussion to
contact him at cook@tmn.com.
Additional articles in 14 page issue 3
Is COREN a Plan to Interconnect Network Access Points?
George Johnston's April 30 1992 Address to FCCSET "Realistic Computer
Networks for K -12 Science and Mathematics" is published.
Al Weis' "From the President and CEO... Allegations Answered" is
republished with commentary.
The ANS-NSF Agreements are Republished __________________________________
The complete Cook Report is available only to paid subscribers.
