Coordination and Decomissioning: NSFNET and the Evolution of the Internet in the United States, 1985-95

The objective is to examine the role of public policy in the development of the Internet in the United States. Until the middle of 1980s, the lack of interoperability delayed the wide adoption of computer networks. In 1985, the National Science Foundation created the first public national backbone NSFNET using a nonproprietary TCP/IP network protocol. It also provided a seed funding for the regional networks. These policies eased the coordination failure and created the critical mass for the growth of networks. Second, in early 90s, the NSFNET was privatized at a relatively early stage. This early privatization avoided the regulatory capture and inertia. This combination of coordination and early privatization can be a useful framework for an economic development policy.