Will Commercial Networks Prevail in Emerging Nations?

Larry Press

OnTheInternet, pp 40-41, March/April, 1997.

Nearly every nation's network began as a university research project [3]. But, was the period of academic/research leadership merely a transitory, technology-transfer stage? Will the growth of commercial networks displace the pioneering academic/research networks?

In the U. S., the National Science Foundation (NSF) backbone has given way to 13 commercial backbone providers [7], and there has been a rapid growth in the number of .com domain names [10]:

     Date    .com Domains

     7/94       12,687
     7/95       55,679
     7/96      284,737

By contrast, there were only 11,463 .edu domains in July, 1996.{footnote}

The ascendance of commercial networking is also reflected in the evolution of the NSF International Connections Program (ICP) which supports collaboration and communication between between U. S. scientists and educators and their international counterparts [4]. While the initial ICP solicitation was for Europe, much of the effort has gone toward connecting emerging nations. NSF has helped research and education networks in Latin America, Asia, and Africa with U. S. connection points, communication links, and consultation. This program has been indefatigable and instrumental in bringing the Net to nations where it would otherwise not reach; however, the ICP is in the last year of its management contract with Sprint, and will shift focus to high- speed research connectivity.

I just visited Chile, where the academic networks were commercial almost from the start. In 1986, Chile's first international connections were established with a UUCP network connecting 4 university computer science departments and REUNA (the National University Network), a BITNET network. This work was done at the University of Chile, and traffic grew rapidly, making it clear that an IP network with high speed international connectivity was needed. In 1991, motivated by the need to share the cost of international links, REUNA was formalized as a non-profit consortium of 19 of Chile's 22 traditional universities and CONICYT, the Chilean Science and Technology Research Commission [2]. Politics and controversy over cost sharing led to the establishment of a second academic network, RdC, (Network of Computers) [5]. In spite of pressure at the time, administration of the Chilean DNS has remained in independent hands at the University of Chile Computer Science Department.

From their inception, RdC and REUNA planned to become self- sufficient by providing commercial service as well as serving universities. Today RdC is roughly 60% commercial, and a visit to the REUNA offices has the feel of a completely commercial enterprise with an aggressive marketing department.

A year ago, there were 5 Chilean ISPs, and today there are 20, but REUNA remains the largest with about 50% of the total Chilean connectivity minutes. Both REUNA and RdC have had the familiar Internet exponential growth. Though relatively high-priced, REUNA has carved out a niche as a full-service provider with extensive, 24-hour support, in-home installation, rich WWW content (some of which is only available to subscribers), PGP support, Web hosting, Web development, Web mirroring, databases, a magazine [8] called Interr@ (a small version of Wired), an annual conference, non-stop PR, etc. On January 20, REUNA announced a strategic alliance with CTC-Mundo, the ISP arm of a major Chilean telephone company (and previously a competitor).

While Chilean university networks are overtly commercial, the universities have fared well. All are connected to the Net, and thirty have active Web sites [11]. Volume-related charges for international traffic have led to restrictions on student access in some cases, but that may have been necessary regardless. REUNA universities are also precluded from switching to lower- priced ISPs or from competing with REUNA, and this has constrained a few members or academic departments; however, the universities and CONICYT now own a valuable asset.

Commercial networking has also thrived, and with 1.226 hosts per 1,000 population, the Chilean connectivity rate is more than twice that of the second most connected nation (per capita) in South America, Uruguay [6]. (Both lag behind industrialized nations like Finland (62 hosts/1000) or the U. S. (31 hosts/1000) [9]). This growth has been achieved in spite of all local calls being metered in Chile, and the cost of a REUNA account being around $60 per month.

Of course the Chilean experience is unique to Chile. They have followed an aggressive free market and trade policy, urged by consultant Milton Friedman, since a 1973 military coup. This policy continued without pause when democracy was restored in 1990, resulting in a market-oriented economy and culture and economic prosperity, with the economy having grown around six percent per year for more than ten years. The market-oriented policy has also led to telephone privatization, deregulation, and competition. For example, Chile has 7 long-distance carriers, and customers can choose a carrier at the time they place a call by dialing the appropriate prefix. They also enjoyed the advantage of strong academic and research programs in their universities [1].

The Internet is clearly in commercial hands in Chile, and the university and research community has not suffered. Will this happen in other emerging nations with market economies? If so, will it be good for the university community? What is the situation in your nation?


The number of hosts is closer to even, with 3,323,647 in .com and 2,114,851 in .edu. The number of .com hosts overtook the number of .edu hosts in October, 1994.


1. Baeza-Yates, R. A., Fuller, D. A., Pino, J. A., and Goodman, S. E., Computing in Chile: The Jaguar of the Pacific Rim?, Communications of the ACM, September, 1995. http://som.csudh.edu/fac/lpress/devnat/nations/chile/chilejag.htm.

2. Utreras, Florencio I., REUNA: How an Academic Network can be Self Funded, Proceedings of INET 95, The Internet Society, Reston, VA, 1995, http://info.isoc.org:80/HMP/PAPER/121/html/paper.html.

3. Goodman, S, Press, L, Ruth, S., and Rutkowski, A., "The Global Diffusion of the Internet: Patterns and Problems," Communications of the ACM, Vol 37, No 8, pp 27-31, August, 1994. http://som.csudh.edu/fac/lpress/sy.htm.

4. Goldstein, Steven N., "Future Prospects for NSF's International Connections Program Activities," Proceedings of INET '95, pp 681-685, The Internet Society, Reston, VA, 1995. http://info.isoc.org:80/HMP/PAPER/178/html/paper.html.

5. Baeza-Yates, Ricardo, Piquer, Jose M., Poblete, Patricio V., The Chilean Internet Connection or I Never Promised You a Rose Garden, Proceedings of INET '93, pp GFC1-9, The Internet Society, Reston, VA, 1995. http://sunsite.dcc.uchile.cl/chile/cl/inet93/paper.html.

6. http://ns.cr/latstat/.

7. http://www.boardwatch.com/.

8. http://www.interra.cl/.

9. http://www.mids.org/.

10. http://www.nw.com/.

11. http://www.reuna.cl/reuna/chile/ues.html.

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