Re: VCC cost models .... (was Re: Limits

"Silverman, Steve" <ssilverman@reston.btna.com> Mon, 06 May 1996 18:09 UTC

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From: "Silverman, Steve" <ssilverman@reston.btna.com>
Subject: Re: VCC cost models .... (was Re: Limits
To: curtis <curtis@ans.net>
Cc: rolc <rolc@nexen.com>
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The point of the original message was that you can't view Internet links as 
"free"
while assuming a charge for ATM links.  This makes makes the use
of ATM uncompetitive.  The subsidies are disappearing (or are gone).
We need to create a system that optimizes in some sense the service the 
users
get versus the total costs which the user's will have to pay in one way or 
another.
I think (with no real proof) that ATM is a component in this "solution" but 
an analysis
to prove this (if possible) must be based on  what will be not what was.

I agree that these subsidies (of the Internet) created an industry and were 
a very good
investment, far better than most of the other federal government's 
expenditures.

In the early '80s, I was able to identify several hundred million 
dollars/year in govt. subsidies
of the Internet.  Most of what I saw was funneled thru DOD but I am 
confident I only saw a
piece of it.

Steve
 ----------
From: curtis
To: Silverman, Steve
Cc: rolc
Subject: Re: VCC cost models .... (was Re: Limits
Date: Monday, May 06, 1996 1:04PM


In message <199605021712.NAA12419@guelah.nexen.com>, "Silverman, Steve"
writes:
>
> I think there is confusion over price vs. costs.   The Internet has always
> been cheap in price because the US government subsidized it.  If you knew
> what
> it actually cost during the early '80s,  those of you who payed those 
taxes
> would howl!


The cost to the NSF of the NSFNET DS3 backbone was about $10M per year
during the late 1980s and early 1990s.  Toward the end of this period
there were an estimated 2M directly attached hosts in the US based on
the DNS walk of in-addr space.  That comes to about $5 per year per
host for the cost of the backbone as a very rough estimate.  Compare
this to the $2B that UUNET was recently valued at and the fact that
UUNET is only one Internet service provider.

In contrast, one fighter plane or nuclear submarine is as costly or
more than the 5 years of NSFNET backbone network service.  I suggest
you read the OIG report of March 23, 1993 which reviewed the NSFNET
program and spoke very highly of its cost effectiveness.  The NSFNET
program is often cited for its enormous return on a small government
research effort by the NSF.

Curtis