American History 1988
Chapter 185 - 179: Challenging the Blue Giant

Chapter 185: Chapter 179: Challenging the Blue Giant

Today’s meeting was merely a sit-down discussion to talk about the feasibility of establishing an Internet Exchange.

According to our previous conception, this is a neutral third-party organization.

Everyone in the organization is considered equal, there is no special distinction made due to the size of their respective enterprises.

This is a necessary prerequisite to ensure future data interconnectivity and transparency, as everyone sitting on an equal footing can achieve true network liberalization.

So, upon hearing a question from UUNET founder Adams, Dean didn’t engage in any meaningless pleasantries.

"How to deal with IBM’s aggressive push in the networking services field? My opinion is precisely today’s topic, to establish a commercial Internet Exchange."

To elucidate his viewpoint, Dean had even prepared a map of America.

However, this map was special; in addition to the standard markings, it had lines of various colors running through the fifty states.

When Dean spread the map out on the table, it captured everyone’s attention.

"This is...?" Recognizing some familiar connection points, Adams ventured a guess.

"This is a schematic of the NSFnet backbone, I spent a month drawing them up."

Dean’s professor, Donald Knuth, was a researcher in the offices of the National Science Foundation, and he knew Kevin, the chief editor of "Global Overview."

The latter was well acquainted with the staff in the Palo Alto National Science Foundation office, and under his introduction, Dean had even visited their local server room.

Because of these connections, and the fact that California was one of the four major backbone nodes of NSFnet, Dean had access to many insider details about NSFnet.

Like the routing layout of NSFnet in America as marked on the map, and the contractors who undertook local network maintenance for each state.

After all, the office of the National Science Foundation is a non-profit organization with an academic slant; it is only responsible for policy management regarding the operation of NSFnet.

As for the establishment and maintenance of the hardware infrastructure, this relies on the cooperation of contract contractors.

IBM’s ability to imperiously deny other network service providers’ entry into NSFnet is because it is the largest contract contractor under the offices of the National Science Foundation.

Nowadays, academic institutions and government public departments across America are able to exchange information via NSFnet, which depends on IBM’s technical support.

If IBM wanted, it could take over most of NSFnet’s network in a very short amount of time.

Now, Dean clearly presented America’s network layout and the scope of various network operators, all concretely depicted on the map.

Honestly, it was the first time that these network operators obtained such a direct understanding of the overall situation of NSFnet.

"Incredible," Adams said, his gaze fixed on the map. "I’m seeing NSFnet from this perspective for the first time."

"Getting back to our earlier topic," Dean pointed to the dense blue lines on the map, "all of these are NSFnet controlled by IBM, though perhaps now we can call it the ANS department."

The blue lines, representing IBM, were the main theme of the map, especially on the East Coast where IBM had nearly monopolized the market.

"Well, looking at it, I’m even beginning to doubt if UUNET can hold out until the day of network liberalization."

The map wasn’t devoid of information about other network operators, such as the orange lines representing UUNET.

They were also on the East Coast, but compared to IBM, their presence was almost negligible.

No wonder Adams felt an absence of the will to fight after seeing this map.

"Relax, guys, we’re not completely without advantages," Dean said, turning his head to see everyone looking solemn, which wasn’t the effect he was aiming for.

Pointing at the blue lines on the map, Dean emphasized, "They only represent academic institutions and government public departments, a field where IBM certainly holds a leading position.

But beyond that, almost all of us are on the same level, and even more so, the market potential in this other part is even greater."

Everyone’s expressions shifted, and Schrader of SPI uncertainly spoke up, "Dean, are you referring to the network market outside of the government sector?"

"Of course, isn’t that the main clientele everyone here currently serves?"

Due to its specifics, NSFnet’s clientele were mainly universities and research institutes, non-profit departments that were difficult for private network service providers to penetrate. Customers outside the system with network needs were the basic clientele for everyone.

"But with its hardware advantage, IBM can still rapidly expand into other markets," Schrader and others worried that IBM had the capacity to do just that.

"That’s exactly why we need to work together!" Dean leaned forward with his hands on the map, his gaze sweeping over everyone in the meeting.

"It’s evident that on our own, none of us are a match for IBM.

But united, everyone in this conference room is enough to challenge the blue giant.

The more people join us, the stronger we’ll become."

IBM, with its extensive hardware infrastructure, could provide data interconnectivity over a vast area.

But what about the private network service providers? Dispersed and disunited.

Some are in Ohio, some in Virginia, and others in New York, California.

Geographical dispersion is one thing, but the scale of the operations varied significantly.

Some had hundreds of thousands of users, others just tens of thousands, and none of them had an influence close to NSFnet’s.

"Only by establishing a network exchange center and connecting our data can we attract more users to choose our service."

The NSFnet policies are too rigid, they don’t even allow students to exchange football tickets on it."

"But our network is unrestricted, everyone can do anything on it, that’s the real liberalization of the network."

To illustrate the scenario of network interconnectivity more vividly, Dean placed several network operators’ logos on the map.

"With the network exchange center, we are connected together." As he drew a few lines, representing the private operators, they gradually encompassed most of the states on the map.

"IBM’s ANS department is a single operator, it can offer limited online content.

Imagine what we could achieve after completing the interconnection?"

Dean had already thoroughly considered all this, so there was no need for them to answer.

"Compuserve’s users can use their own email to communicate with AOL users across service providers through the exchange center.

PSI users and UUNET users can chat or play games in the same software.

Although everyone accesses the network from different locations, we obtain and share information in the same network environment.

The more operators that join the organization, the richer our network content becomes.

Without a doubt, our network is more attractive to users compared to the monotonous ANS!"

Well, the scenario depicted by Dean certainly moved most of the people here.

Although U.S. Internet and AOL are competitors, so are SPI and UUNET.

But only by making the cake bigger, can everyone get a larger piece.

As for how U.S. Internet and AOL should compete for more user subscriptions within this network, that’s up to their own abilities.

The same principle applies to users deciding whether to opt for SPI or UUNET for their network services; it’s competition between the two operators.

"Dean, if we establish a network exchange center, can it be technically achieved?" Duane, who was a newcomer, wasn’t familiar with the organization’s operating principles.

To his question, Steve Case of AOL smiled and answered, "Dean had technically validated it quite some time ago and even received approval from the National Science Foundation office."

"Wow," Duane looked at Dean in surprise, "I’m curious, is everyone at Stanford a genius like you, or is this an exception?"

"That depends on how you look at it," Dean joked before returning to the main topic.

"Technically, it has indeed been validated, but considering the different communication protocols we have.

The routers and gateways for the exchange center might need to be customized, and I personally suggest choosing Cisco.

Their products are outstanding in this field; IBM and the federal government both use them."

No one objected to this point, but a completely neutral third-party organization was not so simple to establish.

"So...regarding the commercial internet exchanges," the exchange referenced by Robert was the name they gave to this organization.

"Should we establish detailed rules for it? Such as the location of the network exchange center, whether we need to report to the Communications Commission, and the charging standards between us?"

Founding such an organization involved various aspects, and Robert’s question marked the substantial beginning of discussions regarding its setup details.

"As I initially suggested, the commercial internet exchange must remain absolutely neutral.

The managing authority should rotate among us present here, as a precondition for equal communication."

To prevent discriminatory practices within the organization, Dean had to ensure that all participants could take turns in managing.

"I agree," "I have no objections," ...

Representatives both large and small in the meeting room raised their hands in support of Dean’s proposition.

When facing the giant IBM, everyone understood this was the most reasonable approach.

"Moreover, regarding the charging issue, members of the exchange only need to pay a fixed fee to cover equipment and maintenance costs.

Each member must also commit not to charge based on the amount of data transferred, otherwise, we would still not be a match for IBM."

Currently, IBM charges based on internet traffic, similar to mobile data fees later on.

But Dean thought this was an incredibly foolish policy, and users would be scared off by IBM’s expensive charges within a year.

The development of the network is fast and the speed of broadband is only set to increase. IBM’s fee model, based on kilobytes, is like digging its own grave.

It was too greedy; the cost to the operator does not increase with the amount of data transmitted.

However, it was IBM’s greed that gave private network operators their chance.

Currently, both U.S. Internet and AOL’s network services are time-based in billing, which, though still expensive, is more reasonable than IBM.

Therefore, regarding Dean’s commitment not to charge based on traffic, no one present objected, as this was already their practice.

"OK, interconnectivity of data, not charging based on traffic, compared to IBM we already have two major advantages."

Of course, to tackle IBM, Dean had more strategies up his sleeve than just these two.

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