To see how big carriers could control the online world, you must understandi

How The Internet Works
   To see how big carriers could control the online world, you must understand its structure.
   When Jennifer, who lives in Pasadena, Calif, wants to send an Email message from her home computer to her mother in Washington, D. C. , she uses a local Internet service provider (ISP) such as Earthlink Network Inc. (EINK) Earthlink gives Jennifer access to the Internet, much in tile way that an onramp puts a driver on the national highway system.
   After Jennifer’s computer makes a local telephone call to Earthlink local bank of modems, Jennifer types in her Email message and hits" send". Based on Mom’s Email address, Earthlink will recognize that Mom is a custmer of an ISP in Washington called Erols Internet Inc. (RCNC). Earthlink will then send the Email to an Internet "back- bone provider", such as GTE Corp. (GTE), to route it along it way.
   Backbone providers are the Internet players that typically own and lease long-haul fiber- optic cables spanning a large region. They also own the communications gear that directs traffic over the Internet. There are only a handful of major backbone providers, including MCI, Worldlom, Sprint Cop. (FON), GTE, and PSINet Inc. (PSIX)
   Backbone providers connect to each other to exchange data between their customers. They also pick up and deliver traffic for a fee from the 7000 or so smaller ISPs, who give residential and small-business users access to the Internet. Backbone carriers are like the highway system over which most of the freight of the Internet travels to reach its destination.
   When the Internet was still a government -run system, there was only a single Internet backbone: the NSFNET, operated by the National Science Foundation, which connected the regional government -funded Internet networks that were run by various research universities. When the government privatized the NSFNET in 1995, companies such as MCI, UNNET Technologies (now owned by worldcom), BBN (Now owned by GTE), and PSINet stepped into the breach by setting up commercial Internet backbone services. New, instead of one NSFNET backbone, there are many of them that link together to provide the global connectivity, that is the Internet.
   When the NSFNET was privatized, the government set up three locations in the U.S. where various Internet backbone companies could place their communications gear side by side and connect to each other. These so called "public peering points" are in Chicago, Palo Alto, Calif. , and Pennsauken, N.J. Later, the government sanctioned two industry- run public peering points called Metropolitan Access Ex- change East and West – MAE East, in Vienna, Va. , and MAE-West in San Jose, calif.
   The problem was, as the Internet grew, the public points became overburdened and traffic’slowed at these bottle- necks. So backbone providers started making arrangements with each other, called “private peening” There are direct, bilateral connections between two carriers in which no fees are charged.
   Backbone providers aren’t charging peers now, but there is a lot of discussion about whether they should. Most industry experts say the Internet needs to develop some payment scheme. After all, it is now a commercial, profit-making business, not a government free bie.
   But the industry has not figured out how to calculate who owes what to whom. Without an industry standard or government regulation, smaller companies fear that larger ones will set these charges in an arbitrary and discriminatory fashion. There could be a lot of "cockamamie measure- ments," says Leonard kleinrock, an Internet founder and computer science professor at the University of California at Los Angeles.
   Since the Internet was privatized, it has grown by leaps and bounds into a remarkably successful communications medium without government regulation--and most want it to stay that way.
   But the Internet has matured to a point that more uniform rules are needed to safeguard competition. As a first step, experts argue that backbone providers should have to disclose the criteria for becoming a peer. This would allow companies to see whether they are being discriminated against.
   An industry group called the Global Internet Project- whose members include such major backbone providers as MCI, GTE, and AT&T--is developing a longer term solution. The group advocates a fair and public system under which all backbone providers would pay each other for carrying Net traffic.
   "We need a market mechanism to ensure peering for all," says Daniel Schulman, president of AT&T WorldNet Service, a project member. Many issues need to be worked out, including who would do the policing. Still, with a clear payment system, those who can afford to pay the price can become peers. Peering would be determined by the market rather than by a private company with its own competitive interests.