chapter  13
24 Pages

Internet Cost Structures and Interconnection Agreements

ByPadmanabhan Srinagesh

The Internet is a network of networks connecting a large and rapidly growing community of users spread across the globe. Individuals use the Internet to exchange obtain and make available information on file servers, and to log on to computers at remote locations. In July 1994, there were 3.2 million host computers on the Internet. The number of hosts on the Internet has been doubling every year since 1989. The number of users on the Internet is not known with any certainty, but estimates range from 2 million to 30 million users. The revenue generated by Internet service providers (ISPs) is not known with certainty, either. The Wall Streef Journal of June 22, 1994 reported that NEARNet, an ISP serving New England, had annual revenues of $5 million in 1994. AlterNet, anational ISP, reported an annual revenue of $11 million for 1994, and a growth rate of 50%. Maloff (1994) estimated that 1994 revenues for all ISPs were $118 million, more than double the revenues in 1993.