7.0234 Internet Business Journal Vol 1.2 (1/491)

Tue, 5 Oct 1993 20:37:36 EDT

Humanist Discussion Group, Vol. 7, No. 0234. Tuesday, 5 Oct 1993.

Date: Tue, 05 Oct 93 18:11:14 EDT
From: Michael Strangelove <441495@ACADVM1.UOTTAWA.CA>
Subject: The Internet Business Journal Vol. 1.2

The Internet Business Journal
Commercial Opportunities in the Networking Age

Volume 1, Number 2 - August, 1993

Michael Strangelove (Mstrange@Fonorola.Net)

Electronic version featuring the full text of Robert
Larribeau Jr.'s article, "The Future For The Commercial
Internet Service Providers".

NOTE: This freely available electronic edition contains
a table of contents and abstracts only. Also note that it
has been designed to be compatible with electronic reader
devices for the print challenged, therefore, no
extraneous characters, lines or tags have been used.

Copyright (C) 1993 by Strangelove Press. All rights
reserved. This document may be archived for public use in
electronic or other media, so long as it is maintained in
its entirety and no fee is charged to the user; any
exception requires written consent from Strangelove


RFC/FYI - Editorial
Michael Strangelove

The Internet Hunt
Rick Gates

The Future For The Commercial Internet Service Providers
Robert Larribeau Jr.

Internet Company Profile
Archie - A Canadian Internet Success Story
Kevin M. Savetz

The Internet and E-Mail
Internet Continues to Exert Influence on E-Mail
Jim Carroll

The Gender of Cyberspace
Leslie Regan Shade and Gladys We

Internet Use At Carnegie
Michael Bauer

Regular Features:

Internet in the UK - SuperJANET Explained
Susan Hallam

Government Online
Carl Briggs

Resources for networked Business, Commerce and Industry

Internet Access News


The Internet Hunt
Rick Gates

The Internet Hunt is a monthly "game" intended to sharpen
the skills of Internet users. Every month its creator,
Rick Gates, sends a set of questions out to the Internet
community. Participants have a limited amount of time to
discover the correct answers and e-mail these back to
Rick for scoring. The August Hunt focused on business
related questions.

Internet Providers:
The Future for the Commercial Internet Service Providers
Robert Larribeau Jr.

The growth of the Internet is well documented. In 1992
the number of hosts grew from 750,000 to 1.4 million. The
current growth rate for the number of networks connected
to the Internet is about 7% per month and about 14% per
month for hosts. The backbone traffic at the end of March
1993 was about 5.3 terabytes and increasing about 10% per
month. The commercial use of the Internet is an important
component of this prodigious growth.
The Internet is a hierarchical network with the
NSFNET is at the top. The NSFNET is the backbone that
connects separately administered and operated mid-level
networks and NSF funded super computer centers. The
approximately 35 mid-level networks provide Internet
connection services for local academic or commercial
When the Internet was formed by the NSF in 1987, its
objective was to provide data services for the research
and education communities. The NSF instituted an
Acceptable Use Policy (AUP) that limited the use of the
NSFNET backbone to research and education purposes.
Specifically it says that use "for-profit" and that
"extensive use for private or personal business" are
unacceptable uses of the Internet. However, the AUP
explicitly permits the use of the Internet by for-profit
organizations where this use is "covered by the General
Principles or as a specifically acceptable use." .This
opens the door wide enough to allow the engineering
departments of many companies to use the Internet,
especially those in computer and communications
companies. The AUP does not apply to the mid-level
networks, which permits the formation of for-profit,
commercial mid-level networks.
As the Internet grew, commercial companies started
using it more and more. Today more than half the hosts
connected to the Internet are said to be in commercial
organizations. At first commercial companies accessed the
Internet through the existing nonprofit mid-level
networks whose primary objective is to serve the research
and education community. These mid-level networks were
generally organized as nonprofit associations of the
academic institutions that they served. Their commercial
users are generally offered a lower level of membership
than the academic members. These networks typically
enforce the NSF AUP on their own network. However the
nonprofit mid-level networks still provide Internet
access for many commercial companies today.
These nonprofit mid-level networks are providing
"Commercial use" of the Internet. This is different from
the "commercialization" of the Internet. In January 1990
the commercialization of the Internet started when both
Performance Systems International (PSI) and UUNET started
offering Internet commercial Internet services. PSI and
UUNET are for-profit organizations that offer TCP/IP
network services and access to the Internet. They do not
require conformance to the NSF Acceptable Use Policy on
their own networks.
PSI was formed in 1989 as a spin-off from the NYSER-
Net, a nonprofit academic network based in Syracuse, NY.
NYSERNet continues to use PSI as its network service sup-
plier. PSI's network has grown to the point that it now
has 51 points of presence in over 40 cities in the U.S.
and includes 31 dialup terminal servers. PSI can be
contacted at info@psi.com or 1-800-82PSI82.
UUNET began offering UUCP based information services
in 1987. It created its AlterNet network in 1990 to
provide Internet services. AlterNet currently has twelve
backbone nodes located in the U.S. and provides several
connections to international Internet networks. UUNET can
be contacted a info@uunet.uu.net or 1-800-4UUNET3.
A third network, CERFnet, which provides AUP-free
services in California was formed in 1988. It is managed
by General Atomics of San Diego, a high- technology
research and development company. CERFnet has seven nodes
located in both Northern and Southern California. CERFnet
can be contacted at help@CERF.net or 1-800-876-CERF.
The first challenge for PSI, UUNET, and CERFnet was
to provide an NSF AUP-free path for their customers to
communicate with each other. At the time they were
formed, PSI, UUNET, and CERFnet were interconnected by
the NSFNET backbone. This meant, for example, that a PSI
customer communicating with a UUNET customer had to
conform to the NSF AUP. These three networks were
isolated islands of commercialization that had to be
bridged. In March 1991 the islands were linked by the
Commercial Internet Exchange (CIX). The CIX was formed to
provide a direct AUP-free interconnection among the three
original members: PSI, UUNET, and CERFnet. The membership
of CIX has expanded from three members to 12 members
today. The CIX members connect directly or indirectly
using T1 facilities to a router, called CIX-West located
in Santa Clara, CA that is managed on a 24 hours per day,
seven days per week basis. CIX-West provides an AUP-free
path between the CIX members. CIX can be reached at
One interesting aspect of the CIX is that there are
no settlement fees. Members pay an annual membership fee
of $10,000 and a one-time start-up fee of $5,000. Each
member arranges for its own connection to CIX-West. CIX
members do not charge each other for the traffic that
they exchange at CIX-West. This is quite unlike the
public telephone networks.
Soon after the commercial Internet providers started
business a significant event in the development of the
Internet occurred. Advanced Network & Service, Inc.
(ANS), a not-for-profit company, was formed by IBM, MCI,
and Merit, Inc. in September 1990 to implement and
operate an upgraded T3 backbone for the NSFNET. ANS
quickly became a major factor in development of the
Internet and began to take a strong role in the
commercialization of the Internet.
ANS formed a wholly owned for-profit subsidiary in
May 1991 called ANS CO+RE Systems, Inc. to serve com-
mercial customers and link them to the research and
education community. ANS CO+RE provides AUP-free access
to the NSFNET T3 backbone for a premium over the price
charged to a research and education organization. Net
returns from ANS CO+RE are returned to ANS for
reinvestment in the network infrastructure.
CIX and ANS CO+RE provide alternative and competing
means of providing AUP- free access to the Internet. This
competition has created issues that have been difficult
to resolve. ANS has recently connected its network to the
CIX without becoming a CIX member. This has created
routing issues that prevent complete, bi-directional AUP-
free communication between customers connected to the CIX
and customers connected to ANS CO+RE. As a result both
BARRnet in California and NEARnet in Massachusetts have
subscribed to ANS CO+RE and have become CIX members. Not
every Internet provider that serves commercial companies
can afford to do this. ANS and the CIX will have to
resolve these issues in order for the commercialization
of the Internet to reach its full potential. ANS and ANS
CO+RE can be contacted at info@ans.net or 1-800-456-8267.
The commercial Internet providers offer a range of
services. Typically they offer full TCP/IP leased-line
access at speeds of 56 kbps to full T1 rates. They also
offer dialup SLIP or PPP access at speeds up to 14.4 kbps
using modems or up to 56 kbps using switched digital
services. Asynchronous modem dialup access is offered for
PCs using standard terminal emulation software.
These services are quite similar those offered by
the nonprofit mid-level networks. The nonprofit mid-level
networks typically have low overhead and can set prices
very competitively. This can make it difficult for the
commercial providers to compete in regions where there
are strong regional nonprofit mid-level networks.
The larger commercial Internet providers have
several advantages over the academic regionals. They have
nationwide networks that offer lower cost toll- free
dialing in the important locations around the country.
Some of them offer unique connection options. For
example, ANS CO+RE offers T3 access for the truly high
speed application. PSI offers a frame relay access
service at 56 kbps.
The commercial Internet providers offer added value
services beyond Internet connectivity. PSI offers
Clarinet (clarinet@psi.com), an electronic publishing
network service that provides professional news and
information, including live UPI wire service news. UUNET
offers global networking and archive services for
international electronic mail and electronic news with
publicly available UNIX software and information.
Network security on the Internet is a major concern
for commercial organizations. Both PSI and ANS have come
up with solutions that provide security for private
network applications of the Internet. PSI uses its frame
relay service to define fixed private connections across
its own network. The frame relay architecture prevents
access from the public Internet.
ANS offers the InterLock service that is a family of
application level security services that establishes a
barrier between a private IP network and the public
Internet. Unauthorized users cannot gain access from the
Internet to proprietary data residing on the private
network. These services also prevent unauthorized
communication from the private network to the Internet.
In addition, InterLock services can be used to provide
enhanced access control between segments of any given
enterprise private network.
By its very nature, network connectivity tends to be
a commodity. The non-profit mid-level networks have, on
the whole, been able to build and operate networks
successfully. The challenge for the commercial providers
will be to develop services that differentiate themselves
in terms of quality of service, coverage, support, ease
of use, and added value services. As they grow and start
to compete with the established added value network
providers such as CompuServe and Prodigy, the commercial
Internet providers will have an even more difficult
challenge to face.
The revenue for commercial Internet providers in
1992 appears to have been about $15 million. PSI
accounted for approximately half this figure. This is an
educated guess because many of the commercial providers
are privately held and do not disclose their revenues.
This is a significant accomplishment for the third year
of operation for these businesses.
The rate growth of the commercial Internet providers
will in all likelihood continue or even increase its
current high rate. The tremendous growth of the Internet
itself will generate significant growth for the
commercial Internet providers. The revenue for the
commercial Internet providers could reach $50 million or
more by 1995. This growth will create management
challenges that will include organization growth, rapid
product development, and network expansion. Maintaining
the quality of their service and support will become
increasingly difficult as these networks grow in size and
their customer base expands.
The competitive environment will become more diffi-
cult. Some nonprofit mid-level networks, such as JvNCnet
in Princeton, NJ (market@jvnc.net or 1-800-35-TIGER), are
converting into for-profit commercial operations. The
formation of SprintLink by Sprint (1-703-904-2000) and
the participation in ANS by MCI are examples of how the
telephone carriers are starting to enter the market.
Pacific Bell and other RBOCs seem to be looking at the
developments in the Internet and its conversion to the
NREN with great interest. Everybody is wondering when and
how AT&T will enter the market.
The current commercial Internet providers will need
to develop strong marketing strategies and programs to
support their growth. They need to differentiate
themselves from their current and future competitors.
Even more importantly they must define a strong market
position for themselves and for the Internet to continue
their growth in the long term. There are still too many
people who really do not know what the Internet is or how
they can connect to it, even among sophisticated users.
Accomplishing all this will not be easy. The current
revenue levels probably do not generate enough profits to
finance the growth, the product development, and the mar-
keting programs required for long term success. The chal-
lenge for the current commercial providers will be to
finance and manage their growth so that they end up among
the winners of this game.

Robert Larribeau Jr. has been working with ISDN
technology and applications for the last seven years.

Internet Company Profile:
Archie - A Canadian Internet Success Story
Kevin M. Savetz

In this article Kevin Savetz traces the growth of Archie
from it's genesis at McGill University in 1986 to the
Creation of Bunyip Information Systems Inc. in 1992. An
excellent example of a software company that has found
its main source of revenue in the Internet.

Kevin Savetz is a freelance writer living in Arcata,
California with his fiancee (Peace), his cat (Kinsey) and
his Mac Ilsi (Tofu).

The Internet and E-Mail:
Internet Continues to Exert Influence on E-Mail
Jim Carroll

"Anyone involved with electronic mail today has to
consider how they are going to deal with the Internet.
It is a complex and difficult issue; denying its
existence will not make it go away ... Estimates of the
number of individuals accessible via e-mail through a
simple form of domain addressing through Internet
connected networks is now said to be surpassing 40

The Gender of CyberSpace
Leslie Regan Shade and Gladys We

This article provides an overview of issues that relate
to women's use of the Internet and discusses ways to make
the Net more accessible and welcome to women,
particularily in the business arena. This subject should
be of great interest to any business concerned with
creating a comfortable working environment on the
Internet for all of its employees.

Gladys We is a Master's student in the Department of
Communication at Simon Fraser University. Leslie Shade
is a Doctorate student in the Graduate program in
Communications at McGill University.

Internet Use At Carnegie
Michael Bauer

The author explores Carnegie Group Incorporated's current
use of the Internet and takes stock of the benefits of
CGI's Internet connectivity. He also points out that
CGI, in recognition of the excellent commercial potential
of the Internet, has undertaken a program to review its
Internet usage and develop a plan to better use its
Internet connection.

Michael Bauer is the principal consultant at Internet
Business Information Services in Pittsburgh,

Internet in the UK
SuperJANET Explained
Susan Hallam

The Internet in the UK column continues to monitor
Internet developments and issues in Great Britain. In
this month's column Susan Hallam informs us that the
academic community in the UK is implementing a four-year,
$30 million project to provide a state-of-the-art high-
speed computing network.

"Complementing the existing Joint Academic Network
(JANET), SuperJANET will use high-performance optical
fibre technology to transmit voices, data and images. It
will transmit up to a billion bits of information per
second, about 1,000 times faster than the existing JANET
service. The breadth and potential importance of
application exploiting this new resource present a
tremendous opportunity, and great emphasis is being
placed on collaborative ventures between academia and
industry. Discussions are already under way on ideas for
links with the USA and across Europe."

This article's further exploration of the uses to which
SuperJANET will be put provides food for thought for
commercial enterprises.

Susan Hallam is a Senior Lecturer in Information
Technology at The Nottingham Trent University.

Other Items Covered In This Issue:

Internet Business Snapshot
A look at a motion picture soundtrack composer's use
of the Internet

Access - Ability: Assistive Technologies and the Net
Online IBJ Supplement

The Internet Business Journal is pleased to announce the
electronic publication of a regular feature, Access -
Ability: Assistive Technologies and the Net, by Dr.
Norman Coombs. Dr. Coombs has written a series of
articles that focus on the different types of
disabilities and discusses some of the adaptive computing
solutions for each. To receive the first in this series
of articles, e-mail mstrange@fonorola.net.

Telecom Industry Review
Online IBJ Supplement

The Internet Business Journal is pleased to announce the
electronic publication of a regular feature, Telecom
Industry Review, by William Park. Mr. Park has written an
extensive "Trend-Watch" of the telecommunications
industry. To receive this twelve page electronic
supplement, e-mail mstrange@fonorola.net and request the

Business Group Formed To Cruise The Net
The Information Infrastructure Sourcebook
Online Catalog of Goods and Services
Commerce Business Daily
Select News Trial Offer
Four New Gopher+ Implementations
Great Lakes Haylist
Software for Commercial Transactions
Nasdaq Financial Executive Journal
Emerging Technologies Portfolio
INET93 Papers
FAX Service by E-mail
Internet "Want Ads"
New Electronic Mail Forwarding Service
Electronic Newsstand
Internet Economics Paper
Prodigy Offers Internet Gateway
New Implementation of WAIS
Technology Newsletter
Computer Industry Review

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The Internet Business Journal

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