Economics and the Internet

This is a collection of documents that have to do with the economics of the 
Internet, information goods, and related issues. It is maintained by 
Hal.Varian@umich.edu. These documents do not represent the official views of 
the University of Michigan or Hal Varian. The most one can hope for is that they 
represent the views of their authors! 

This document is currently under construction and can be expected to change. If 
you have suggestions for additions or changes, please send them to me. 
Introduction
This is a draft of a paper that describes some of the economic issues relating to 
the Internet. 

This is a summary of a Harvard conference about commercialization of the 
Internet. 

Accounting
Some the accounting issues involved in measuring Internet traffic are described 
in A framework for flow based accounting. Network Analysis in Support of 
Internet Policy Requirements describes the relationship between traffic 
measurement and various Internet policy goals. Network Analysis for a Public 
Internet describes some related issues. 

Long-term traffic aspects of the NSFNET describes some ways in which traffic 
on the NSFNET may evolve. Several other related papers are listed here.

RFC1272 is an Internet "Request for Comment" that provides some background 
on Internet accounting issues. RFC1346 discusses resource allocation, control 
and accounting in networks. 

RFC1125 describes some of the problems involved in connecting together 
various administrative domains. 

This report discusses some issues of authorization. 

Finally, here is a description of NetTraMet, which is a program for analyzing 
network traffice for accounting purposes. 
Government
HR1757 is the text of the "Boucher Bill" which provides for a "coordinated 
Federal program to accelerate development and dissemination of ... high-speed 
networking". Here is a Commentary on HR1757 by Mike Rogers of the EDUCOM 
Networking Task Force. This is the The national information infrastructure: 
agenda for action. Here is a draft report on the NREN that was commissioned by 
the OTA entitled The NREN: Whom shall it serve?. 

Here is the National Science Foundation's solicitation for the new high-speed 
network NSF9352. This is the review of the NSFNET by the Office of Inspector 
General.

Information Goods
Here are two papers by Brad Cox on "superdistribution", which is a way to 
charge for the use (but not the distribution) of information goods. Market 
Processes and Software Engineering and What if there is a silver bullet and the 
competition gets it first? 

Here is a discussion of some issues dealing with Internet Mercantile Protocols, 
which is a set of protocols to pay for information goods. Here is a proposal for 
constructing NetCash, a way to allow for "anonymous" payment.

Here is a paper on anonymous credit cards, and this is a followup that analyzes 
collusion with anonymous credit cards. 

This is a description of a proposed Internet Billing Server This is a more 
detailed description called the Internet Billing Server Prototype Scope.

Miscellaneous
This is a history of the Internet. (The author has many strongly-held opinions 
that I do not endorse, but there are some interesting stories here.) 

Here are some miscellaneous factoids about the Internet.

Here is a report by an economist at UCSD about how to price their local campus 
network. It contains a good, simple discussion of some of the economic issues. 
Technical reports
This is a paper by Jeff MacKie-Mason and Hal Varian on The Economics of the 
Internet. We followed this up with a paper called Pricing the Internet. There is 
considerable overlap in the first parts of these papers. 

In these papers we describe a pricing mechanism that uses real-time "smart 
markets" to control congestion. Here is another approach to congestion control 
using precedence bits entitled Mitigating the coming Internet crunch.

A Measurement Study of Internet File Transfer Traffic describes patterns of 
FTP traffic, which still makes up the bulk of Internet traffic. There are also 
some remarks about how the FTP system can be made more efficient. How Slow 
is One Gigabit argues that there will be relatively few problems in upgrading 
the network's bandwidth to very high speeds. 

Empirical evidence about usage-based pricing is relatively scant. Chile 
currently has a usage-based accounting scheme. New Zealand also uses usage-
based pricing, but I do not have a good written description of it yet. 

One important set of issues is using pricing to influence user choice of type of 
service. This set of issues is discussed in 
Pricing in Computer Networks: Motivation, Formulation and Example 
	Ron Cocchi, Deborah Estrin, Scott Shenker and Lizia Zhang 
Service Models and Pricing Policies for an Integrated Services Internet 
	Scott Shenker 
A Study of Priority Pricing in Multiple Service Class Networks 
	Ron Cocchi, Deborah Estrin, Scott Shenker and Lizia Zhang 
Economics of the Internet /University of Michigan / Hal.Varian@umich.edu