MCI AND BT: LIMO SERVICE FOR CRUISING THE NETThe alliance will help business surfers go first class-for a price
Rhone-Poulenc Rorer Inc. has seen both the good and the bad of the Internet. Cyberspace looked great in January, when 1,200 people from seven countries logged on for the Collegeville (Pa.) drugmaker's online introduction of Rilutek, the first drug to treat Lou Gehrig's Disease. It's been a drag, though, on days when drug researchers tried to download big files of data on the human genome--and ended up staring at frozen computer screens. ``At times it works very well, and at other times it's not just congested, it's constipated,'' says Jeffrey E. Keisling, vice-president for information systems. ``You can sit there and wait with absolutely no response at all.''
Consider it a modern-day version of feudal England's ``tragedy of the commons,'' where a free public resource is overused to the point of exhaustion because no one has an incentive to use it efficiently. Up to now, people haven't been charged based on their usage of the Internet, and that has encouraged serious overcrowding and congestion. With circuits overloaded and with popular World Wide Web sites unable to handle all would-be visitors, electronic mail gets slowed down, cruising the Web gets more difficult, and movement of data files can slow to a crawl, especially in peak-use periods during the business day and in the early evening. All that means the Net can be hard to use just when a company such as Rhone-Poulenc Rorer needs it most.
The result: The Internet is beginning to look a lot less communal. On June 10, MCI Communications Corp. and British Telecommunications PLC announced that they would offer what amounts to first-class service for businesses on the Internet--a separate parallel network with extra capacity, especially on international routes, and duplicates of many popular Web sites. The service is guaranteed to be more lightly trafficked so packets of information can be moved more quickly and dependably. Not surprisingly, this premium service will cost more than other Internetaccess services, though the partners aren't saying by how much. According to Vinton G. Cerf, the Internet pioneer who is now MCI's chief Internet strategist: ``For a while, in the Internet community, anybody who charged for anything was a bad guy. But the system can't survive unless its costs are met.''
MCI is not the first to offer a premium Net service. Sprint Corp., the world's largest carrier of Internet traffic, took a similar step in February when it offered to set up big corporate customers with ``intranets'' that would give their employees and selected outsiders fast, secure Internet links. Sprint charges 50% more for an intranet connection than for standard Internet service.
Indeed, of the big three long-distance voice carriers, only AT&T, a newcomer to Internet service, is resisting the move toward partitioning its network. Marshall J. Ball, general manager for AT&T Worldnet Service, says differential pricing is bound to confuse and alienate customers: ``We're trying to bring people onto the Internet, not keep them off.''
OVERDUE. To be sure, the Internet is no disaster area--it is just in the midst of explosive growth. The number of computers attached to the Net is growing 85% a year, according to Network Wizards, a Menlo Park (Calif.) Internet company. The Internet is also carrying more graphics, video, and even telephone calls--all of which require more bandwidth than simple text and data.
Still, economists say capitalism's invasion of the Internet is overdue. ``I view this as an opportunity to make the Internet a whole lot more valuable for a whole lot more people,'' says Jeffrey K. MacKie-Mason, a University of Michigan associate professor of economics, information, and public policy. For instance, he says, video sent over the Internet today is jumpy and grainy in part because no one has a financial incentive to equip the network for something better. But on May 11, a day after the announcement with BT, MCI announced a deal with Intel Corp. in which, among other things, they will develop software for high-quality Internet videoconferencing.
Capitalism won't solve Internet congestion overnight. In fact, the Net will always be bumping against its limits, predicts Tim Berners-Lee, director of the World Wide Web Consortium, a standards-setting body, and the man credited with creating the World Wide Web as a researcher at the CERN particle physics research center in Switzerland. ``Use will always expand to fill available bandwidth. The faster people can get information, the more they will browse,'' says Berners-Lee. True enough. But now, someone will be there to satisfy that rising demand--and collect for the service.
By Peter Coy in New York, with Paul C. Judge in Boston
Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.