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How much did NSFNET cost?

It is difficult to say how much the Internet as a whole costs, since it consists of thousands of different networks, many of which are privately owned. However, it is possible to estimate the cost of the NSFNET backbone, since it was publicly supported. In 1993, NSF paid Merit about $11.5 million per year to run the backbone. Approximately 80% of this was spent on lease payments for the fiber optic lines and routers. About 7% of the budget was spent on the Network Operations Center, which monitorer traffic flows and troubleshoots problems.

To give some sense of the scale of this subsidy, add to it the approximately $7 million per year that NSF paid to subsidize various regional networks, for a total of about $20 million. Based on estimates that there were approximately 20 million Internet users (most of whom were connected to the NSFNET in one way or another), the NSF subsidy amounted to about $1 per user per year. Of course, this was significantly less than the total cost of the Internet; indeed, it does not even include all of the public funds, which came from state governments, state-supported universities, and other national governments as well. No one really knows how much all this adds up to, although there are some research projects underway to try to estimate the total U.S. expenditures on the Internet. It has been estimated---read ``guessed''--- that the NSF subsidy of $20 million per year was less than 10% of the total by expenditure U.S. public agencies on the Internet.



Jeffrey K. MacKie-Mason
Tue Jul 11 10:21:32 EDT 1995