The growth and development of the Internet'

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U10988 The Economics of the Internet (ENET)

• Lecture 2
• The growth and development of the Internet.
• Internet growth statistics, access and use.
• Infrastructure, institutions and protocols.

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Todays objectives

• to inform you about the important stages in the
  development of the Internet, the applications
  that run on it and the associated protocols
• to familiarise you with some key points about the
  technical infrastructure of the Internet
• to highlight the role of some key people and
  organisations
• to look at the growth of the Internet and
  consider factors (especially economic ones) that
  can account for this growth

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Reading

• Rohlfs (2001) book - especially Chapter 13
• Rohlfs (2001) article available online
• Greenstein and Prince (2005)
• Tanenbaum - especially Chapter 1
• the material on the ENET website for week 2 and
  the links from it

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Follow up work for the week

• Practical 2
• 1 explanation of some key terms and consideration
  of their relevance to our understanding of the
  growth and development of the Internet
• 2 identification of the role of some key people
• 3 identification of the role of some key
  organisations
• 4 Internet metrics issues

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Some points from last week

• the Internet and the World Wide Web are not the
  same thing
• the importance of protocols - the standards or
  set of rules that enable computers to communicate
  with each other
• the adaptable nature of the Internet and its
  institutions
• The importance of network externalities and
  complementary bandwagon effects for the take off
  of the Internet

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The Internet

• The Internet is an interconnected set of computer
  networks across the globe that work together
  under a common set of rules or protocols (the
  TCP/IP suite).
• The name Internet refers to the global seamless
  interconnection of networks made possible by the
  protocols devised in the 1970s, the Internet
  protocols, still in use today. Vint Cerf, 1995

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Internet backbone networks, ISP etc.
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From ARPANET to Internet
1969 ARPANET - a single network with 4 nodes
(funded from US Defense budget) 1973 work began
on linking networks Internetting first
international links to UCL and Norway 1985 NSF
takes over the backbone for interlinking networks
(still government funded but by now more
academic than military) 1995 NSF funding stops -
commercial companies take over the Internet - by
then it consists of over 50,000 networks
connecting over 5 million computers

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The original ARPA network
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Internet traffic (2001) as depicted by
TeleGeography Inc.
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A more detailed depiction of Internet traffic
from TeleGeography Inc.
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http//www.telegeography.com/maps/internet/images/
europe_map_large.gif
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JANET - the Joint Academic Network in the UK
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Protocols

• A protocol is an agreement (set of rules)
  between the communicating parties (peers) on how
  communication is to proceed.

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The TCP/IP suite

• Q Why is it important?
• A It enables computers on different networks,
  designed by different vendors, to work together
  in delivering various applications e.g. e-mail,
  file transfer, remote login (telnet), use of the
  web etc.
• TCP/IP was the key to turning the Arpanet into
  the Internet.

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TCP/IP key dates

• 1964 Paul Baran (RAND Corporation) publishes
  paper on packet-switching networks
• 1974 Vint Cerf and Bob Kahn publish paper
  describing TCP
• 1978 Vint Cerf and others separate the TCP and IP
  functions

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Internet applications and their protocols

• Early core applications
• File Transfer FTP (SSH is usually now preferred)
• Terminal access (remote login) Telnet
• Electronic mail (E-mail) SMTP
• Newsgroups Usenet
• The World Wide Web HTTP
• Other Internet applications include chat
  systems, Videoconferencing, Video and audio
  streaming, Voice over Internet, peer-to-peer
  file-sharing, instant messaging etc.

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The IP address

• Every computer on the Internet has a unique IP
  address - four numbers separated by dots
• e.g. 198.137.240.100
• identifies the main host computer at the White
  House

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Find your IP number

• The State University of New York at Stony Brook
  provides a service whereby you can find out the
  IP number of the Internet computer you are
  connected to.
• Why not try it? (URL on my links page).

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DNS - Domain Name System (1)

• DNS is a hierarchical domain-based naming scheme
  and distributed database system for mapping host
  names and e-mail destinations to IP addresses.
• Domain names are easy (for humans) to remember
  names for the computers on the Internet i.e.
  those that have been assigned IP numbers

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DNS - Domain Name System (2)

• ICANN (Internet Corporation for Assigned Names
  and Numbers) coordinates the assignment of IP
  numbers and Internet domain names.

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DNS - Domain Name System (3)

• The top level domain covers two identifiers,
  separated by a dot
• generic type - e.g. .com, .ed (or .co and .ac) -
  recent additions include .biz and .coop
• country codes - e.g. .uk, .cn, .gr, .nl, .jp

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DNS - Domain Name System (4)

• Sub-domains can then be created lower down the
  hierarchy by those responsible for that level
• e.g. userweb.port.ac.uk

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Computer networks

• A computer network is a collection of
  autonomous but linked computers.

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Why computer networks?

• Resource sharing
• Communication
• Increased reliability
• Improved scalability
• Cost savings

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The Internet puts you in touch with resources
and people

• Access to remote information (e.g. data sources,
  e-commerce, video on demand)
• Person to person communication (e.g. e-mail,
  videoconferencing)
• synchronous and asynchronous links

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Network connections

• via
• copper wires
• cable
• fibre optics
• microwaves (radio frequency)
• communication satellites

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Network architecture

• architecture is a set of layers and protocols
• purpose of layer is to carry out services for the
  higher layer in a way that is transparent to the
  higher layer
• layers communicate with their peers according to
  known protocols
• between layers there is an interface

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Design issues for layers

• layers need to
• identify senders and receivers
• have rules for communication (protocols)
• know about different available routes
• have conventions about speed
• identify and correct errors

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Size classification of networks

• Local Area Networks (LAN)
• Wide Area Networks (WAN)
• internets
• Tanenbaum also distinguishes Home Networks,
  Wireless Networks and Metropolitan Area Networks
  (e.g. based on cable TV)

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client-server model
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clients

• E-mail client software
• Outlook
• Groupwise
• Eudora
• also web based e-mail systems such as GMail,
  Hotmail and Yahoo!

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SMTP

• Simple Mail Transport Protocol
• encodes every e-mail message as a sequence of
  ASCII characters
• Used to send e-mail messages from one server to
  another. Messages can be retrieved with an e-mail
  client using POP or IMAP protocols

The Economics of
the Internet Guy Judge, February 2006
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M IM E

• Multipurpose Internet Mail Extension
• specifies how non-text may be transmitted by SMTP

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Key dates in the evolution of the Internet -
Electronic Mail

• 1971 - Ray Tomlinson of Bolt Beranek and Newman
  Inc. (BBN) invents the first e-mail program to
  send messages across a distributed network
• 1972 - Tomlinson adapts the program to run on
  ARPANET where it is immediately taken up with
  enthusiasm
• 1975 - John Vittal develops MSG, the first widely
  available e-mail program
• 1978 the first incidence of spam!

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Ray Tomlinson
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World Wide Web (WWW)

• The World Wide Web is a collection of
• inter-linked documents and associated
• files that are made available to people
• with computers connected to the
• Internet via a special protocol called
• HTTP (HyperText Transfer protocol)

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Key dates in the evolution of the Internet -
precursors of the World Wide Web

• 1965 Ted Nelson sets up project XANADU to
  establish world-wide distributed library of
  information (earlier inspiration from Bush
  1945)
• gopher system developed at University of
  Minnesota
• mid 1980s - hypertext packages such as HyperCard
  (1987) and Guide developed

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Key dates in the evolution of the Internet -
the World Wide Web

• 1989 - creation of the World Wide Web and HTTP at
  CERN(Geneva) by Tim Berners-Lee and others
• 1993 - first publicly available web browser
  (MOSAIC) developed at NCSA
• 1990s - new browsers (Netscape, IE) - with helper
  applications and plug-ins for dealing with
  graphics, video etc.
• 1994 - W3C, the World Wide Web Consortium set up
  (http//www.w3.org/)

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Sir Tim Berners-Lee
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remote access or terminal emulation telnet

• telnet allows you to login to other remote
  computers on Internet to which you have access
  rights
• e.g. I used to log in to the MIMAS computer at
  Manchester from Portsmouth using MS Telnet

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file transfer

• transferring files from computer to computer on
  the Internet
• FTP File Transfer Protocol
• first established 1971
• FTP and FTP client software (e.g.. WS_FTP32)
• anonymous FTP
• more secure protocols such as SSH are now
  preferred

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Internet organisations and agencies

• No single body in overall charge, but the
  following all have important roles
• ICANN (Internet Corporation for Assigned names
  and Numbers) manages domain names and IP
  addresses
• ISOC (The Internet Society)
• W3C (World Wide Web Consortium)
• We should perhaps also mention the regulators
• Ofcom (UK) and FCC (US)

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Internet organisations and the United Nations

• Many people have argued that the Internet should
  not be governed by a private (US) company (ICANN)
  but by a multilateral organization with
  international legitimacy and democratic processes
  under United Nations control like the ITU
  (International Telecommunications Union) some
  have suggested that the ITU should take over some
  of the functions of ICANN.
• The second World Summit on the Information
  Society (WSIS) was held last November in Tunisia.
  It received a report from the Working Group on
  Internet Governance (WGIG).

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Internet metrics

• The Internet Software Consortium conducts a
  semi-annual survey of the number of Internet
  hosts (see next slide).
• But Zook (2000) cautions us about using this
  measure uncritically

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Source OECD
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Internet Access Highest in London and South East
Adults who have used the Internet in the last 3
months by Government Office Region and GB country
Source National Statistics http//www.statistics.
gov.uk/CCI/nugget.asp?ID914
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Internet metrics

• There are also problems in counting the number of
  people online, or the number of web pages (see my
  links page for more details).
• But despite these concerns there is no doubt that
  there has been phenomenal growth in the Internet
  and its use - particularly since around 1994 -
  WHY?

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Reasons for the rapid growth of the Internet and
its use

• Network externalities - the value of the Internet
  to any one user is an increasing function of the
  total number of users Rohlfs
• Complementary bandwagon effects - part of the
  value of the Internet derives from the
  availability of complementary products, services
  and applications (e-mail, web browsers, news and
  information services etc..) As the network
  expands there are increased incentives for the
  suppliers of complementary products Clements
  (2004) calls this an indirect network
  externality
• E-Commerce
• Despite the hype and the bursting of the dot.com
  bubble
• the Internet continues to grow and expand into
  new areas

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Metcalfes law or DeLongs law

• Metcalfes Law - the value of the Internet to
  any one user increases as the square of the total
  number of users
• DeLongs Law - the most important and cheapest
  links are established first and it becomes
  increasingly costly to connect the last few users

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E-commerce and e-banking drivers

• Lower transactions costs - automated systems can
  vastly reduce transactions costs
• Global reach - more customers are within reach
  (especially for information products that can be
  delivered as well as ordered and paid for over
  the Internet

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Reduction in transactions costs Cost to bank -
typical US funds transfer transaction ()

Source PIU Report on e-commerce
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Possible essay question

• To what extent can the phenomenal growth of the
  Internet in the last decade  be explained by
  economic factors? Use relevant economic concepts
  and models to support your arguments.
• Hints You would need to include the following
  concepts
• (i) network externalities (ii) complementary
  bandwagon effects (iii) critical mass (iv)
  interlinking (v) common standards and protocols .