The Internet versus the Internet

We are often told that private companies won’t invest money into certain technologies, such as “green” energy, because it isn’t economically feasible. Government, the argument goes, must “invest” money for the research that will allow these technologies to become profitable. And as evidence, the advocates of subsidies to “green” energy companies point to the Internet.

The Internet would not exist today without the government’s involvement during the 1970s and 1980s. Government investment in “green” energy might produce the same life enhancing values as the Internet. Or so goes the argument.

As is often the case, this argument drops context. The Internet today is nothing like the Internet “created” by the government.

When the Internet was first developed, it was a text only environment. It was developed to allow researchers funded by the government to share information and computing resources. Personal computers were expensive, limited in their capabilities, and owned by few Americans.

It is true that private companies did not develop the Internet. There was no reason for private companies to do so. However, as the potential of the Internet became more evident, private companies sought ways to develop its capacity and capabilities. But until the early 1990s, something stood in their way—it was illegal for private companies to connect to the Internet.

When the prohibition on commercial activities on the Internet was lifted, private companies began to invest billions of dollars in the infrastructure that makes up the Internet today. The Internet today is nothing like the Internet that was controlled by the government. The difference is as stark as that between today’s smart phones and the rotary dial phones of fifty years ago.

The investments in the Internet belie the claim that private companies won’t invest in promising technologies. They do and they will. They just need to be free to do so. And that includes deciding what they believe is promising.