At 25, Internet Readies Move Into Free Market : Technology: Quasi-public computer network to be privatized. Some are leery, others see opportunity.

For 25 years, from its founding by the Defense Department as a tool for the scientific elite to its recent astounding growth like some ferocious strain of fiber-optic ivy, the amorphous computer network known as the Internet has been anchored financially and technologically by the federal government.

Not anymore.

As the ‘Net celebrates its silver anniversary this month, the National Science Foundation--which has been spending upward of $10 million a year administering the central “backbone” of the Internet--is preparing to relinquish the world’s closest thing to an information highway to the vagaries of the free market.

Many longtime users believe the move is crucial to the growth of the network. People can still find and exchange an enormous amount of data and chat cheaply over thousands of miles, but the Internet is becoming strained by the influx of the curious and the commercial into what was once the preserve of researchers.

But others fear that pieces of the Internet could split apart as profit replaces sharing as the motive linking it all together. As the network of networks becomes central to commerce and begins to touch the lives of ordinary citizens, the stakes in its responsible operation have grown exponentially.

“It’s going to be like the Copernican revolution, when people suddenly realized the universe did not have a center,” said Bill Washburn, who heads a consortium of smaller networks that is one of many entities hoping to profit from the new Internet order.

“The Internet is anarchy, it’s a form of chaos, and with the disappearance of the NSF network, that chaotic quality will become more immediate and more evident to a lot of people who have been able to ignore it.”

Whatever the outcome, the quasi-public network has arrived at a watershed as it begins the first stages of official privatization.

“This is an immense change affecting millions of people and tens of thousands of individual networks,” says National Science Foundation networking chief Stephen Wolff, who has spearheaded the move. “But the marketplace is there now, and there’s no point in having the federal government competing with the private sector.”

Indeed, the foundation’s withdrawal is in one sense symbolic, since the network has been de facto open to businesses for years. More than half of the Internet’s rapid growth this year is accounted for by commercial traffic, much of which technically conflicts with the agency’s rule that it be used for research only.

This “acceptable use” policy, as it is known, had become something of a conundrum for the foundation--essentially unenforceable, it nonetheless impeded the network’s growth by making some firms leery of joining it.

Already, the investment in the network’s infrastructure by dozens of private companies like Cerfnet and Netcom--go-betweens that link customers to the Internet for a fee--far outweighs the government’s contribution. And as the market for providing business and consumer Internet access expanded, there was pressure on the government to make way for private enterprise.

For example, the members of Washburn’s group, the Commercial Internet Exchange, have a standard agreement to exchange traffic with one another without using the science foundation backbone.

Still, much of what drives the demand for access are the resources and the promise of connection with others around the globe made possible by the foundation’s core network. There are 3 million computers and 38,000 networks on the Internet. The nerve center knows the name and address of every one of them, and how to route a packet of data between any two. And now it is dissolving away.

The government’s plan, set in motion over a year ago, is just beginning to take effect. By the end of this year, if all goes well, each of the 400 billion bytes of data that flow daily over the foundation’s high-speed fiber pathway (each byte is equal to roughly one letter of the alphabet) will have found another, privately owned route to its destination.

Now telephone companies and firms that run regional data networks linking customers to the Internet are rushing to capture the business created by the government’s abdication. It promises to be a competitive free-for-all.

But if all 20 million Internet users--a population that is increasing at a rate of nearly 20% a month--are to continue to be able to exchange electronic mail, then all those private carriers, including direct competitors like Sprint, AT&T; and MCI, must forge exchange agreements.

And while the National Science Foundation is helping to fund several neutral switching points--informally referred to as “demilitarized zones” where data are handed off between networks--no one is compelled to connect to them.

“They’re private businesses--it’s up to them to decide what they want to do. Nothing is guaranteed,” says Jon Postel, a USC professor who participated in the birth of the network in 1969 as a graduate student and is working with the National Science Foundation to oversee the transition. “Everybody knows they have to do it, but no one wants to commit yet.”

William Schrader, president of Performance Systems International, a large Internet service provider in Reston, Va., for example, says he may choose not to connect to the government-sponsored switches because of concerns over the security and privacy of his customers’ data. Instead, he might forge his own private links with other carriers.

“I’m glad the government is finally getting out of our business,” Schrader says. “And I would like there to be no bifurcation of the Internet--but there is that risk.”

Such talk strikes fear in the heart of someone like Bill Emery, a professor of aerospace engineering at the University of Colorado, who relies daily on his Internet connection to send and receive data from weather satellites.

“I can’t live without my connections, and I’m afraid during some of the uncertainties when other people are doing the wiring I won’t be able to get it,” Emery says. “I don’t think the Internet is going to go away, but we’re going to live through some pain, and it’s not going to be this sort of fundamental right that it’s been in the past. Things are going to cost more.”

Indeed, for the academic world, long addicted to e-mail and the ability to search faraway databases without leaving campus, the change will probably mean an end to what for most has been unlimited free on-line access.

And that, says Wolff, is part of the point: “The whole idea is to reduce the network to the status of the telephone. The Internet is one of the costs of doing business, and universities will provide for it the same way they provide for desks and chairs and roses in front of the president’s house.”

The costs are hard to predict. University connection costs, subsidized by the government, range between $20,000 and $50,000 a year, and the National Science Foundation estimates that costs will rise only a few thousand dollars at a school like UCLA in a heavily populated area. But at Colorado, there have been estimates that the service could cost an additional $100,000.

Users who have piggybacked on the government’s backbone service may also see connection costs rise. Rural areas and small businesses that must purchase their own connections would probably be hit the hardest.

But perhaps the biggest concern among Internet users is that the telephone companies and other firms that take over the networks will find a way to start charging for data by the packet, in much the same way they charge for normal phone calls by the minute. More than anything, that would discourage exploration and end cheap access to communication.

“All I can say is that we’re looking at a multitude of options for the long term,” says Robert Collet, networking director at Sprint, which counts among its data network customers several large corporations and the Philippines. “Right now we’re in the world of flat monthly rates.”

Wolff allows for the possibility that somewhere down the line, regulation may be necessary. But he says the price pinch, if there is one, will not hit academics immediately. For the next three years, the National Science Foundation will continue to partially subsidize several of the regional networks that connect universities and research institutions.

Ultimately, the research community is counting on a plan to resurrect the past with a smaller, more exclusive network boasting superior high-speed technology. It will initially be reserved for the research elite represented by the nation’s National Science Foundation-funded supercomputing centers.

If, in the end, the whole point of the Internet is how it connects people rather than computers and fiber, then the biggest changes may come as its new underpinnings reshape the network’s traditionally homogenous sociology.

“We’re evolving past being one organism,” said Jim Pepin, executive director of computing services at USC. “The Internet has become weighted down by its own weight. Now there’s a whole set of new social dynamics.”