American History 1988
Chapter 184 - 178: Commercial Internet Exchange

Chapter 184: Chapter 178: Commercial Internet Exchange

Bell South’s phone lines could be used not only for making calls but also for dial-up internet access.

The Information Superhighway plan had not yet been formally proposed, and apart from the NSFnet’s main backbone using optical fiber communications, the other branches still relied on traditional phone lines.

Therefore, if the network interconnection plan were to be implemented, then Bell South’s telephone network would have another field to play in.

Providing data connectivity services for the network wouldn’t conflict with Bell South’s telephony business and could even bring in additional revenue.

Moreover, the prospects of the network communication market were much larger than IP telephony. Capturing just a small part of it could bring enormous profits to Bell South.

It was precisely because of this potential that Duane gave up the 5 million US Dollar patent fee and instead chose the network interconnection plan.

Of course, due to previous antitrust issues, whether Bell South could enter the network communication market was still an unknown.

However, Dean had a circuitous plan that might bypass this restriction.

The value of this plan was roughly 5 million US Dollars. Indeed, it was because of it that Duane charged Byte Company only a symbolic licensing fee of 500,000 US Dollars.

Of course, what surprised Duane the most was that the initiator of the networking interconnection plan published by the Washington Post turned out to be Dean.

However, that wasn’t important, the crucial point was whether Bell South could join in.

Although most of the network operators involved in this plan were of moderate scale, this organization was not under the jurisdiction of the federal government.

This meant greater freedom for everyone, which was something Bell South valued greatly.

Only those who have experienced strict regulatory oversight from judicial institutions could appreciate the preciousness of free enterprise.

However, as one of the titans of the capital market, regulating Bell was necessary.

Otherwise, the monopolistic party driven by the pursuit of profits would inevitably exploit the general public even more.

So, how one viewed this issue depended entirely on their position.

Of course, this wasn’t Dean’s focus today; he was merely responsible for acting as a broker.

"The members of the network interconnection project alliance are all of a small scale at present, the biggest two being SPI and UUNET.

Bell South is a behemoth to them, so it would be best if you didn’t display too much aggressiveness later.

This could cause our allies to become wary, as nobody wants to see the Bell of the past make a comeback,"

Pre-divestiture Bell was an entity feared by all, and Dean reminded Duane to appear a bit more harmless.

As for their purpose in coming here today? Of course, it was to attend a meeting.

Members of the networking alliance would formally hold a symposium in the Arlington area to establish a Commercial Internet Exchange.

This was the first time everyone sat down together for a tentative contact and preliminary negotiation regarding the networking interconnection plan.

It’s unlikely that this meeting would result in substantial progress, as it was the first, but it still had extraordinary significance.

The rules of network operations for the next few decades might just begin with today’s meeting.

The reason for choosing the Arlington area close to Washington for the meeting’s location wasn’t only because AOL and UUNET’s headquarters were here.

In addition, it was close enough to the White House, which would provide ample political resources should there be a need for political lobbying.

Of course, Dean had played a role in the background of this meeting, as it was also part of his business agreement with Bell South.

And concerning the formulation of the rules, Bell South naturally did not want to miss out.

"I’ll only attend the meeting today and not express any opinions," Duane promised solemnly.

Bell South had not yet received the approval of the alliance members, and he knew how to stay low-key when necessary.

"Good, that’s exactly what I wanted to hear," Dean was quite satisfied with his attitude. "You should be grateful that IBM established the ANS department ahead of time."

"Why?" Duane was only half aware of the story behind this.

"Because IBM is like a mountain pressing down on everyone’s heads; its enormity is terrifying."

In the current era, IBM’s dominant position in the computer field was unchallenged.

It was the Bell of the computer domain. Two years earlier, it was nearly targeted by the Department of Justice to be split up under antitrust laws.

Such a colossal entity had established a network monopoly division and refused the inclusion of other operators.

One could imagine the pressure that the newly established SPI and UUNET must have felt from such a move.

It was also because of IBM, a common enemy, that the networking alliance agreed to let a representative from Bell South attend as an observer.

Otherwise, it’s possible that Bell South would be viewed as the enemy by the members of the alliance, replacing IBM.

At that moment, Duane even felt somewhat relieved that Bell had been split into seven "Baby Bells," making him seem less threatening.

"Alright, we’ve arrived," Dean said, leading Duane and the others into an unremarkable two-story building on Woodset Street in Arlington.

If not for the blue AOL logo hanging at the door, Duane might have found it difficult to associate it with a company.

While the people from Bell South were taking in their surroundings, Dean had already warmly greeted a young man with brown skin.

"Steve, this is Duane, the CEO of Bell South," Dean introduced them to each other.

"Welcome to Virginia, Mr. Duane."

"Thank you, I’ve been very much looking forward to this day," Duane responded, displaying the humility he professed.

"Dean, the representatives from the other parties have also arrived; perhaps we should start sooner rather than later?"

Steve Case showed no enthusiasm toward Bell South. If it wasn’t for Dean acting as an intermediary, he would probably not have any interaction with them at all.

The name "Bell" inevitably brought to mind the past. Dean shrugged at Duane, reminding him not to forget the purpose of today.

Remembering Dean’s instructions, Duane continued to enthusiastically follow Steve into the office interior.

Today’s informal discussions took place at AOL with a total of roughly a dozen participants.

When Dean walked into the meeting room, his old acquaintance Robert was so surprised he almost stood up.

"Dean, what are you doing here?" blurted out Robert, the CEO of American Link Network.

"It’s great to see you, Robert," Dean greeted him warmly. "I would certainly come to such a grand event."

"But..." Robert wanted to ask in what capacity he had come, if he remembered correctly, Dean had already sold off all his American Link Network stocks.

Byte Company was neither an internet company, nor was Dean a shareholder of American Link Network, so what was he doing here?

"Let me introduce him," as the host, Steve Case came to stand next to Dean, "Dean Price, I believe many of you already know him.

Of course, his presence here today is not only as the initiator of the network interconnection project, but he is also AOL’s largest individual shareholder."

A shareholder of AOL? Three question marks sprouted above Robert’s head.

WTF? When did this happen?

Well, actually, it wasn’t just him; Duane was also quite surprised Dean was still a shareholder of AOL.

Ignoring everyone’s astonished looks, Dean had already spoken privately with most people here.

Don’t forget that when the alliance was first established, it was Dean who personally visited and persuaded them one by one.

"Guys, whether as an individual or from the company’s perspective, I am very eager to achieve network liberation as soon as possible."

The "company" Dean now referred to was obviously AOL; being a major shareholder, he naturally had to consider things from AOL’s perspective.

"Achieving network liberation is also what I have been working on. Today, to fight against the Blue Giant, I have brought a powerful ally."

Dean gestured with his hand to Duane beside him, "Mr. Duane from Bell South is equally committed to the network interconnection project, which is a great boost for us."

Taking advantage of Steve’s introduction, Dean also introduced Duane to everyone.

Bell South, though bearing the Bell name, was just one of the seven Bell companies.

Its deterrence power almost plummeted in a straight line compared to the domineering IBM.

Moreover, before today’s meeting, Dean had already hinted to most of the representatives here.

So, when they saw Duane politely stand to greet them, everybody nodded back politely.

They were on the fence about Bell South.

The former made them somewhat wary, but IBM’s clout also drove them to actively search for every ally they could find.

Only Robert stared at Dean, unable to figure out how Dean had become a shareholder of AOL.

Shit! Just a few months ago, he was a major individual shareholder of American Link Network; now, suddenly, he had become a major individual shareholder of AOL, a competitor to American Link Network!

Yes, from a business perspective, American Link Network and AOL were more direct competitors.

Both provided online content services as operators, while SPI, UUNET, NETcom only provided network connectivity without content services.

Jumping from his own company to AOL, it was hard for Robert not to overthink.

In fact, the whole matter was not that complicated. Dean’s initial investment in American Link Network was just to make a quick buck.

And that’s what he did. When the stock price of American Link Network rose close to 16 US dollars, Dean sold off all his shares.

He didn’t even wait for the last deadline in the agreement, one year; the two rounds of cashing out brought Dean a total of tens of millions of US dollars.

The moment his shares were sold, he had no more ties to American Link Network.

The reason Dean became a shareholder of AOL was not to earn quick money, but because he saw a promising future for the latter.

The purposes of the two investments were fundamentally different; AOL deserved more of Dean’s effort.

Of course, Steve’s mention of the largest individual shareholder was actually just 10% ownership of AOL.

Dean’s investment included a 200,000 US dollar check, as well as the C-Link instant messaging technology he developed in Cleveland.

AOL had its own client, but its chat system was outdated.

The tools Dean developed could greatly enhance the user experience.

This was why Steve Case accepted Dean’s investment; otherwise, AOL didn’t really lack investors.

And Dean used the slightly outdated C-Link technology, and not the more advanced instant messaging system of Teams software.

Because C-Link belonged to Dean personally, Teams belonged to Byte Company.

See, 10% of AOL’s shares legally belonged to Dean personally, not to Byte Company.

This was why Dean could sit here today and participate in the discussion of the Commercial Internet Exchange.

"Guys, please forgive my directness. Regarding the establishment of the Commercial Internet Exchange, perhaps we need to accelerate our pace."

Dean stood up to distribute the collected information to everyone, "IBM’s ANS is aggressively progressing, and they have already started providing network services for public institutions."

Being at Stanford, which was one of the main nodes of the NSF network,

and with Professor Donald Knuth as a researcher at the National Science Foundation office, Dean had access to a lot of first-hand information.

"Backed by a contract with the National Science Foundation, IBM is now taking most of the public sector’s orders.

If we keep going dispersed like this, we will quickly lose most of the market."

The subscription customers were already few, and if IBM snatched away some more, there might indeed be a risk of bankruptcy.

Seeing this information, the most nervous were the pure network service providers like SPI and UUNET.

They had invested in hardware infrastructure, much like telephone companies laying lines.

This was undoubtedly a huge expense; without customers, they would be the first to go under.

"Dean, do you have any suggestions?" Adams, the founder of UUNET, believed that since Dean had brought forward detailed information, he must have his own views.