Robert V. Binder

Who Spun the Web?

July 27, 2012  |  Blog, Business, Networking, Software Products

Abstract global networksGordon Crovitz’s Wall Street Journal editorial “Who Really Invented the Internet?” (July 23, 2012) generated a lot of blowback owing to factual errors in his recounting of how certain network technologies were developed. As he used this story to support a broader case for limiting government intrusion into technology markets, the responses were often vituperative. Although Crovitz was wrong on some of the history, I agree with his point of view:

“It’s important to understand the history of the Internet because it’s too often wrongly cited to justify big government. It’s also important to recognize that building great technology businesses requires both innovation and the skills to bring innovations to market. As the contrast between Xerox and Apple shows, few business leaders succeed in this challenge. Those who do—not the government—deserve the credit for making it happen.”

The bile of the complaints seems to be motivated more by a dislike of Crovitz’s point of view about government than a desire to set the record straight. Many pointed to a few now-seminal results of certain government funded projects as proof positive that public R&D is necessarily a good thing, that Crovitz’s factual errors indicate he is an ignorant fool, and therefore what he has to say is simply a right-wing polemic.

The confluence of many technology streams made today’s Internet. It is now so ingrained in daily life that it is hard to grasp what an immense project it has been. Suppose, circa 1990, you had issued a request for proposal for a network system that would securely and reliably transmit millions of bits per second between any computer, anywhere in the world, for fractions of a cent per megabyte. Oh, and by the way, this network must also reach hundreds of millions of mobile hand-held endpoints (like those exotic new-fangled cell phones), all kinds of vehicles, any industrial machine, residential appliances, home entertainment systems, and medical devices. It must not have any central control, but all of its parts must follow certain rules (protocols), which will be developed on the fly. I’m sure this would have been viewed as science fiction and/or a grandiose delusion by nearly everyone at the time. So how did all this (and more) happen anyway?

What has been missed in Crovitz’s chorus of condemnation is a recognition of the unquestionably crucial role of entrepreneurs, markets, and risk capital in creating today’s incredible global Internet. I am certain that no single entity, government or private, could have achieved this and that it could only have been a product of free-market capitalism.

Some commenters wondered what kind of network infrastructure we would now have if the early Internet had been a commercial project, suggesting that (snicker, snicker) something like AOL would have been the result. The Internet is and has been realized by tens of thousands of private companies responding (rapidly) to market forces producing network equipment, services, and software.

What if all this had been only a creature of government? We have a few case studies of what happens when government takes control of a public network. In the context of European democracy (France) we get the Minitel system (shut down about a month ago after 30 plus year run.) But more often, a national Internet supports a police state in closed societies like China, North Korea, and Iran. I suspect that if “the Internet” had been wholly a US government project, it probably would resemble the US Postal Service  or Amtrak. But then, what would have been the Internet of national Internets? Would we have needed a North American Free Information zone?

Also missing in the chorus of condemnation is a recognition that substantial commercial network technology evolved in parallel with the Arpanet project. (The US Department of Defense funded Arpanet in the late 1960s through the early 1970s. It produced technologies which (after much revision) have become part of today’s Internet. Crovitiz’s recounting of its history provoked the furor.) I worked with several early networks: IBM’s remote data entry and bi-synch protocol, DECNET – the Digital Equipment approach for interconnecting its computers, and ISDN – AT&Ts high speed digital data link for switched networks. I used a statistical multiplexer that achieved a screaming 9600 bits per second, full duplex, over leased lines – very bleeding edge then. The alternative was shipping reels of magnetic tape over hundreds of miles, daily. There were, of course, many others. Unlike government-funded R&D, these technologies had to make money.

Many commercial innovations that enable today’s Internet were privately developed in the 1980s, which built on commercial technology and markets established in the 1970s. I worked with several of them. Compuserve operated a widely-used X25 packet network that used PDP-8s to control many dial-up modems. IBM’s Token Ring LANs and SNA achieved broad use. The Quotron system replaced the punched paper “ticker” tape system that had used the Teletype network to disseminate near real-time market data among US stock exchanges. Cisco was founded at the end of the 1980s to provide high capacity Ethernet equipment, building on the Ethernet stack Xerox pioneered. The Williams Pipeline company (Tulsa, Oklahoma) spun off Williams Telecommunications (WilTel) to pull fiber cable through its gas pipes to create a broadband backbone network. US Sprint built out its long distance service with this, immortalized in Sprint’s “pin drop” ads. I subsequently worked with WilTel to develop automated testing for their frame-relay switching systems, the better to push bits through gas pipes. Although many of these technologies are now long gone, they informed the designs of competitors and provided proof of commercial viability for investors in start-ups like US Robotics, 3 Com, and Cisco, which subsequently took to market technologies taken for granted today.

Many competing network architectures and protocol stacks were in use during these early decades, so the realization of data communication among remote computers was not unique to Arpanet. I’m not sure why TCP/IP came to be a de facto standard in the two layers of the stack it inhabits (and hence its subsequent enshrinement and role in the “invention” of the Internet). It probably has a lot to do with fact that, by the late 1980s, it was proven, available, interoperable, and license-free. As a result of this low barrier to adoption, it was the right technology at the right time and reached dominance in a few years. By 1995, every platform vendor had to have a TCP/IP stack, or they couldn’t sell anything. The unintended lock-in became permanent by the end of the 1990s. TCP/IP is now so deeply embedded in all kinds of networking that replacing it is completely unthinkable.

Several innovations dominated networking in the 1990s: cheap personal computers drove the emergence of client/server computing, which drove demand and development of local-area network technology. Clunky standalone network interface boxes became add-in cards, which became integrated into motherboards. PCs also enabled the simultaneous rise of popular distributed apps (e. g., bulletin board systems and email) and the market for dial-up equipment. With the coincidental development of HTTP and early browsers (government-sponsored at CERN and the University of Illinois), content displayed in GUIs had a whole new dimension – it seemed magic when you first used it. It wasn’t hard to see the staggering commercial potential of “the web” (billions of eyeballs). That inflated the investment bubble of 1998 to 2000.  Although a lot of technical failures and financial losses ensued, the bubble also launched technologies and businesses that are key parts of today’s Internet. It also drove an insatiable appetite for bandwidth, which spurred a rapid increase in the availability and capacity of digital broadband – so much so that we had a lot “dark fiber” for a few years. No more.

In the last decade, the US government funded network R&D in many ways, notably its recent focus on “cyber security”. We’ll have to see where this leads. I can say with certainty that today’s Internet is the result of a lot of high-risk investment in technology businesses and, increasingly, the contributions of the open source community. The extent to which markets self-organized to achieve all this is simply astounding. Publicly traded companies that provide equipment, physical plant, and services are essential for today’s Internet. In 2011, these 268 firms sold about $1.4 trillion of related goods and services. That’s real money, even in Washington D.C. Here are the numbers by sector:

Sector 2011 Revenue, $ Billions * Number of Public Companies
Communication Equipment 174.7 64
Diversified Communication Services 58.6 30
Internet Information Providers 63.2 48
Internet Service Providers 2.0 8
Internet Software & Services 10.6 24
Networking & Communication Devices 56.3 18
Telecom Services – Domestic 309.9 22
Telecom Services – Foreign 439.4 18
Wireless Communications 264.0 36

Many other key players – start-ups and private firms – are not included in this tally. While it is true that results of certain government-sponsored R&D evolved into critical pieces of the Internet as we know it today, it is ludicrous to assert that any single actor (private or public) can claim sole parentage. It is also clear only a highly competitive and profitable market economy could have engendered the dazzling array of technology that we now cannot imagine living without.

Estimated as 4x most recent quarterly revenue for selected technology sectors, as reported at YCharts.



8 Comments


  1. My 00.2 cents on Mr. Binder’s view….he forgets the core argument, without govt support the Internet would not have been possible. Without the govt. massive projects like sending a man to the moon simply can’t be done without govt support. THAT is the point and the rest is subterfuge, plain and simple.

    …and Mr. Binder, just because technology developed extensively over the years doesn’t mean that the core technologies that was the springboard could have been created without the necessary resources that only a state sponsors effort could provide. Just look at the difference in development of aircraft vs automobiles. Both came to the US in the early 1900’s and both were creations by the private sector without govt help. Look at how each developed for the first 30 years and then watch what happens over the next 80 years. For the first 30 years aircraft development mirrored automobile development but as soon as Billy Mitchell dropped bombs on battleships the govt realized that aircraft would be the weapon of the future and just look at the innovation and technologies spawned from the research provided through govt contracts to Lockheed, Northrop, Boeing and others. We’ve gone from a biplane that flew hundreds of feet at a time a few feet off the ground to self docking space craft drones, yet we still put gas in our cars and control it with pedals and a steering wheel. That sir is the difference between govt sponsored projects and those possible being funded privately.

    • While it is certainly true that Arpanet needed Government funding, I don’t think it follows “without govt support the Internet would not have been possible.” A lot of other viable network technology evolved in parallel – I mention several. My hunch is that Arpanet technologies ended up playing a central role because they had the fewest obstacles to interoperability compared with proprietary alternatives.

      • Bob – you are right on…Vint Cerf and Rob Kahn certainly were the DARPAnet creators and proved that we could communicate network to network but without the IBM’s, Burrough’s, Shell Oil,,,,and a huge lot of domestic private and international companies we would not have the internet of today. I like you, worked with closed networks back into the 60’s, but nothing like the internet of today…I saw many of the innovations that led to todays internet and most if not the majority came from private companies. I am shocked that people want to down play the part that privtae industry played to falsely build up that all the innovation came from the government. We need to allow more freedom of the private sector, reward them, reduce the highest corporate taxes in the world and let innovations flourish. We need smaller government and much more private industry. I guess the younger generation is not getting that big government means less private industry and therefore less jobs. Wake up America, while we are still free and can do like Canada and drop corporate taxes and drop the unemployment rate or do we want to be like the old Soviat Unon where everyone worked for the government…except the criminals. Our Congress MUST wake up!

  2. The most fun I’ve read in this massive tempest in a teapot, was how what the govt really wanted was OSI. What it got was TCP/IP, because the various research institutions, colleges, universities, and companies, who collaborated to flesh out the interoperability that TCP/IP represents, were more interested in making things work than in making bureaucratic brownie points.

    So while OSI is a pretty framework, it never did produce anything that _worked_. That’s govt.

    It was only after govt got out of the way, only after the ban on commercial traffic was repealed, only AFTER the restrictions on peering were taken away and the limitations on connecting to “the internet” became purely technical rather than bureaucratic, that what today is recognized as “the internet” could happen at all.

  3. Examples of what commercial entities like Xerox and IBM have done in network technologies, airplanes and cars, and all the rest, including existing network technologies of the 70s like SNA, Token Ring, DECnet, and even Appletalk and Novell Netware, and *especially* whether government can or cannot ever successfully make something, are red herrings: the assertion to be evaluated, I believe, is whether ‘the Internet’ as we know it today is a direct descendant of the ARPAnet, and it unqualifiedly is. One important distinction Mr Binder omits in his rose-colored reminiscences of IBM’s network technologies and DECnet is that while they could (usually) talk with other computers from the same manufacturer, they didn’t have a snowball’s chance of talking with anything else (well, maybe over RS232..) One of the things the government brought to the table, as they’ve done with other crucial technology directions before and since (and, as pointed out, not always brilliantly or successfully–see OSI) was extensive purchasing power that steered technology into a desirable direction: if you were going to get a grant to do research in the ARPAnet, you had to impelement the open standard TCP/IP, and some openly-defined applications on top of it (remember Telnet, FTP, and SMTP?) instead of SNA or DECnet or any other proprietary transport: you had to level the playing field, and play together. NONE of the companies would have done that, and networking would probably still be stuck in the petty fiefdoms of incompatible transports we had then.
    Yes, of course, some companies–notably BBN at the time–also contributed expertise and development, and while I don’t have direct knowledge of the funding behind the private-sector contributions for all of the innovations that improved (either version of) the ‘net, I expect that many of those were also government-funded even as they came from powerhouses of innovation like Xerox PARC, HP, RAND, IBM, and others.

    So yes, the US government unqualifiedly created the ARPAnet, and the ARPAnet is the direct ancestor of the Internet, and the Internet as we know it today–though different in many ways from the ARPAnet, could not have come into being with the ARPAnet.

    Brent Sweeny
    Indiana University (AS89)

    • Thanks for the thoughtful commentary. I don’t view the early network technologies with “rose-colored reminiscences” and didn’t characterize them as such. As I’m not an expert in network history, I stuck to technologies with which I had first-hand experience.

      And, I don’t dispute the now-central role that certain derivatives of government-funded R&D play. My main point is that the entirety of the Internet, as it exists today, is predominantly the result of private enterprise. It is of course true that in the absence of any private or public technology stream, it would be different (but we’ll never know in what way.) What is a gross distortion is to assert that any single contribution, including Arpanet and TCP/IP is responsible for the entirety, as in “X invented the Internet.”

  4. More paternity: the contributions of Louis Pouzin to the Internet as we know it, and how his notions of datagrams influenced Cerf et al.

    http://www.economist.com/news/technology-quarterly/21590765-louis-pouzin-helped-create-internet-now-he-campaigning-ensure-its

  5. Dennis J. Frailey

    What seems to be missing in all of this discussion is recognition that sometimes it’s a partnership. The government is good at some things and free enterprise at other things, and we don’t always know which is better until we try it both ways. What would air transportation be like if there were no government involvement? We’d have had huge battles over air space(and who knows how many more accidents) had there not been an entity to establish overall rules and provide a disinterested way of examining accidents. Many argue that we wouldn’t want the government to actually run the airlines, but the optimal amount of regulation is debatable. There are those of us who remember the logical pricing and hugely more civilized passenger experience back when air transportation in the US was regulated.

    Now consider automobiles. Without the government we would not have the interstate highway system (and we might not even have semi-standardized road widths or traffic signals)and we would probably have much worse gas mileage and most likely would not have seat belts, air bags, and other safety features. Whether you view the latter as good or bad may depend on your ideological persuasion but I for one appreciate those safety features.

    My life’s experience leads me to observe that, regardless of political persuasion, people call for government involvement when what they want to happen isn’t happening naturally, and they oppose government involvement when they perceive it as inhibiting what they want to do. So the conservatives want the government to regulate some things and the liberals want them to regulate different things.

    Another observation comes from a good friend of mine: “Private industry is out to extract all they can out of you, so you can easily get screwed, whereas government generally has more honorable motives but is plagued by a higher percentage of incompetence, primarily via political appointments.”

    As in most things in life, extreme positions are seldom the right answer. We don’t want the government to run everything and we don’t want them to remain totally uninvolved. Our job as citizens is to push for competent government.

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