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June 16, 2008 / Toby Dayton

How AT&T Lost The Internet…

This month’s Vanity Fair has an excellent story on the early origins of the web. While the story and the personalities are pretty well known, the Vanity Fair piece contains first-hand accounts from not only the key players directly involved with Arpanet back in the 60’s but also from an excellent collection of people that in the subsequent decades were instrumental in turning the internet into what it has become today. Again, while everyone is familiar with that history and the stories behind AOL, Amazon, Netscape, ebay, etc., the anecdotes are fascinating and the stories related contain some interesting things that I hadn’t heard before (including, for example, why the @ symbol is used in email).

One of those stories relates to the earliest days of Arpanet and the involvement (or lack thereof) of AT&T. In an effort to decentralize the network and protect it against an attack on what was formerly a centralized telecommunications infrastructure, Paul Baron, who was working at Rand Corporation, developed the concept of packet switching. The biggest opponent of this new idea was AT&T. As Baron and Bob Taylor (Director of ARPA’s Computer Science Division) relate:

Paul Baran: The one hurdle packet switching faced was AT&T. They fought it tooth and nail at the beginning. They tried all sorts of things to stop it. They pretty much had a monopoly in all communications. And somebody from outside saying that there’s a better way to do it of course doesn’t make sense. They automatically assumed that we didn’t know what we were doing.

Bob Taylor: Working with AT&T would be like working with Cro-Magnon man. I asked them if they wanted to be early members so they could learn technology as we went along. They said no. I said, Well, why not? And they said, Because packet switching won’t work. They were adamant. As a result, AT&T missed out on the whole early networking experience.

A short while later, Bob Metcalf, who was working on Arpanet at M.I.T. and who later invented Ethernet and founded 3Com, was giving a demonstration of the network that had been developed to a group of AT&T executives in 1972:

Bob Metcalfe: Imagine a bearded grad student being handed a dozen AT&T executives, all in pin-striped suits and quite a bit older and cooler. And I’m giving them a tour. And when I say a tour, they’re standing behind me while I’m typing on one of these terminals. I’m traveling around the Arpanet showing them: Ooh, look. You can do this. And I’m in U.C.L.A. in Los Angeles now. And now I’m in San Francisco. And now I’m in Chicago. And now I’m in Cambridge, Massachusetts—isn’t this cool? And as I’m giving my demo, the damned thing crashed.

And I turned around to look at these 10, 12 AT&T suits, and they were all laughing. And it was in that moment that AT&T became my bête noire, because I realized in that moment that these sons of bitches were rooting against me.

To this day, I still cringe at the mention of AT&T. That’s why my cell phone is a T-Mobile. The rest of my family uses AT&T, but I refuse.

The story also illustrates (yet again) how Al Gore played a critical role in the evolution of the web. He didn’t invent the web and he never claimed to have done so, ever, but he was instrumental in providing funding that led to major innovations. As Marc Andreessen elaborates:

Marc Andreessen: Mosaic was built at the University of Illinois. I was an undergrad student, but I was also a staff member at the National Center for Supercomputing Applications, which is basically a federally funded research institute. When Al Gore says that he created the Internet, he means that he funded these four national supercomputing centers. Federal funding was critical. I tease my libertarian friends—they all think the Internet is the greatest thing. And I’m like, Yeah, thanks to government funding.

At any rate, I am perpetually amazed and intrigued by stories of huge monopolists that miss enormous opportunities due to flawed thinking, lack of creativity, risk averse attitudes, stubbornness, and arrogance. AT&T’s obstinacy is a classic example, and one worth retelling.