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The growth and development of the Internet'


The growth and development of the Internet. Internet growth ... work began on linking networks 'Internetting'; first international links to UCL and Norway ... – PowerPoint PPT presentation

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Title: The growth and development of the Internet'

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.

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
  • to look at the growth of the Internet and
    consider factors (especially economic ones) that
    can account for this growth

  • 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

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
  • 4 Internet metrics issues

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
  • The importance of network externalities and
    complementary bandwagon effects for the take off
    of the Internet

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

Internet backbone networks, ISP etc.
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

The original ARPA network
Internet traffic (2001) as depicted by
TeleGeography Inc.
A more detailed depiction of Internet traffic
from TeleGeography Inc.
JANET - the Joint Academic Network in the UK
  • A protocol is an agreement (set of rules)
    between the communicating parties (peers) on how
    communication is to proceed.

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.

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

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.

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

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).

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

DNS - Domain Name System (2)
  • ICANN (Internet Corporation for Assigned Names
    and Numbers) coordinates the assignment of IP
    numbers and Internet domain names.

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

DNS - Domain Name System (4)
  • Sub-domains can then be created lower down the
    hierarchy by those responsible for that level
  • e.g.

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

Why computer networks?
  • Resource sharing
  • Communication
  • Increased reliability
  • Improved scalability
  • Cost savings

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,
  • synchronous and asynchronous links

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

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

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

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)

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

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

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
  • 1975 - John Vittal develops MSG, the first widely
    available e-mail program
  • 1978 the first incidence of spam!

Ray Tomlinson
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)

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
  • gopher system developed at University of
  • mid 1980s - hypertext packages such as HyperCard
    (1987) and Guide developed

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

Sir Tim Berners-Lee
remote access or terminal emulation telnet
  • telnet allows you to login to other remote
    computers on Internet to which you have access
  • e.g. I used to log in to the MIMAS computer at
    Manchester from Portsmouth using MS Telnet

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

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
  • ISOC (The Internet Society)
  • W3C (World Wide Web Consortium)
  • We should perhaps also mention the regulators
  • Ofcom (UK) and FCC (US)

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).

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.
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 -

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
  • E-Commerce
  • Despite the hype and the bursting of the
  • the Internet continues to grow and expand into
    new areas

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

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

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

Source PIU Report on e-commerce
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
  • (i) network externalities (ii) complementary
    bandwagon effects (iii) critical mass (iv)
    interlinking (v) common standards and protocols .