Computer Network Group Asks for Aid

The system could reach every home

The San Francisco Chronicle
The New York Times

July 16, 1990

IBM, MCI Communications Corp. and officials at a group of Michigan universities have quietly begun discussions with the federal government about creating a non-profit company that would operate a high-speed computer network that could one day reach every home in the country.

Some competitors worry that International Business Machines Corp. and MCI will gain an inside track in the race to build such a network, which is expected to replace the various specialized but much slower networks in use today.

The proposed network would function like the nation's interstate highway system, carrying not just computer data but television images, telephone conversations and other forms of communication.

Just as the highway system created economic activity everywhere it was built in the 1950s, the computer network is expected to create businesses that take advantage of its technology.

The proposed network is thus seen as a significant business opportunity.

Traffic on the National Science Foundation Network, or Nsfnet, a specialized network started three years ago by IBM, MCI and the Michigan universities, is increasing by 25 percent a month.

IBM and the Washington-based MCI say their motivation is to make the United States stronger. But their proposal is raising complex issues such as who will operate the data networks and how they will be financed.

A number of corporations, including computer manufacturers, regional telephone operating companies and providers of long-distance telephone service are eager to participate in developing high-speed networks.

The discussions with the government center on the network's management, whether by the government or private corporations, as well as its structure.

Many industry executives and public officials view the networks as essential to promoting industrial competitiveness in areas ranging from broadcasting to scientific research.

IBM, MCI and the universities quietly sent a proposal to government officials urging that they set up a non-profit corporation to operate a national network that would carry data at more than 700 times the speed of today's fastest networks.

Some competitors in the computer and communications businesses are concerned that creating a corporation involving IBM and MCI might stifle small commercial operations that have begun providing network services regionally.

"The regional computer networks are very uptight about this," said one computer industry executive, who spoke last week on the condition that he not be identified. "They are very scared about this issue."

Copyright 1990