Government Spending

Privatizing Internet

Phasing out government subsidies for Internet infrastructure


Al Gore may hype government spending to guarantee universal access to the "information superhighway," but one government agency is phasing out spending on one aspect of the Internet in recognition of an ever-growing group of market providers.

The Internet is that concatenation of linked computer networks that allows far-flung researchers, writers, and citizens instant or almost-instant access to the latest scientific research, weather data, or even just letters from friends.

The National Science Foundation, which provided infrastructure support for this network of networks through its NSFNET program since 1985, has begun gradually eliminating such funding over the next five years. (It will continue to subsidize connection fees for specific institutional users.) Eliminating the NSF's subsidy to the "backbone" of the Internet (the infrastructure that links local service providers) has made some users nervous, NSF spokesperson Beth Gaston acknowledges. "There's a sense of protectiveness on the part of Internet users, like 'We have this, don't mess with it.' With any change people are concerned. In this case the concerns are mostly unwarranted."

Chief among the concerns is that with for-profit businesses running things, the breadth of Internet connectivity could be reduced. Mark Miller, a software architect with Agorics Inc. in Los Altos, California, argues that that fear stems from a "misunderstanding and mistrust of market forces. The benefits of Internet are very much in scale with the number of other people [you can] connect with. Anyone not offering connectivity with as many different aspects and services as possible would be cutting their own throat."

Dave Farber, a professor of telecommunications systems at the University of Pennsylvania, says the NSF funding cutback can be seen as a victory for markets in computer interconnection services. Since the NSF began its involvement in the Internet, the number of users and the number of businesses in the network service provider business has boomed. "We're better off letting prices be driven down by the private sector," Farber says. "In two or three years you won't see any difference in access, and you'll even see lower prices."