Internet question

Nathan Newman nathan.newman at yale.edu
Thu Nov 5 14:54:30 PST 1998


As I understand it, they asked AT&T to take over the non-military parts of the Internet back then, which was mostly servicing the university part of the network- which was probably not that attractive a prize back then.

Actually, AT&T had turned down the Internet once before in the late 1960s when RAND did a little research on the feasibility of the packet-switching concept. Not only did AT&T say the concept was not doable, they refused to share the technological specifications to check out the feasibility. Folks at RAND had to purloin copies to test their ideas.

When ARPA set up the Internet, this was one reason why they turned to the Cambridge, MA-based consulting firm BBN to setup the network.

In AT&T's defense, this was a period when the FCC regulators were increasingly telling the company that they had absolutely no right to touch any commerce involving computerized services, and the Internet had to smell like a big fat regulatory no-no to the company. And since AT&T would probably be barred from getting involved in a serious commercial way, they had infinite self-interest in opposing and denigrating the whole idea of packet-switching, since it was a threat to AT&T's whole set of economic and technological assets.

Contrast this with Minitel in France where the state telecom system not only dedicated itself to electronic communication but used the economic proceeds from it to subsidize universal service to French customers who had previously never had a phone. It is an interesting fact (see my earlier post) that where economic subsidies in the US went from lower-income, basic phone users to subsidize upper-income Internet users, the subsidies went in the opposite direction in France, from electronic services users to fund basic service.

--Nathan Newman

-----Original Message----- From: michael at ecst.csuchico.edu <michael at ecst.csuchico.edu> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Cc: pen-l at galaxy.csuchico.edu <pen-l at galaxy.csuchico.edu> Date: Thursday, November 05, 1998 1:57 PM Subject: Internet question

I heard Peter Schwartz on NPR today saying that the government offered the Internet to AT&T in 1978 and 1988. The company turned down the offer saying that it had no commercial value. Can anybody verify that story?

Thanks.

-- Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu



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