Would the Internet exist without US Government sponsorship?

Yet another post based on the muse of Facebook…

I gotta ask, how subsidized is the “internet”? Would this thing be able to operate on a free-market, in your opinion(I would assume yes, as it has massive profits available to it), but, could the start up of the internet, been possible without subsidization? Not sure how clear my question is.  (a Facebook Friend)

My response:

As it is right now, there are no subsidies involved… it’s self-supporting based on domain registration fees and general good-will of the various commercial suppliers involved. To the extent the US Govt is involved at present, it is as a major consumer of bandwidth, and as a content supplier.

Starting out… The Internet (TCP/IP) protocol suite displaced X.25, which was available commercially from the late 1970s (I had an account from May 1978 onwards via Tymnet). X.25 is based on virtual circuits and is closer in conception to telephone switching than to the current Internet.

In X.25 networks, you connected to a single destination, and relied on that destination to provide your content and services. This was the original function of services such as CompuServe, Delphi, Prodigy and AOL. By 1993 the X.25-based services were handling around 20 million subscribers compared to TCP/IP having perhaps 500,000 users. It’s for this reason Windows 95 did not handle TCP/IP very gracefully; there was a good business argument to be made against the whole Internet “fad.”

In ’93 or ’94 the US Govt started to transition out of running the “Internet” – and opened it up to commercial users. Since TCP/IP ran on damn near anything (X.25 required special switches and lots of infrastructure by comparison) and had no messy royalties and such, it began to catch on quite quickly.

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