Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

How IT Came to Rule the World, 2.3: Data Packets for Dollars

Posted on | June 25, 2010 | No Comments

Share

This is the 18th post in the mini-series How IT Came to Rule the World and addresses some of the earliest attempts to privatize and globalize the Internet. Here, the early Internet, called ARPANET, was privatized by a bunch of entrepreneurial engineers who worked with the ITU to make a pre-TCP standard, the X.25 and X.75 protocols to provide data networking for banks and other multinational users.

Larry Roberts, the Chief Scientist at ARPA who oversaw the development of the ARPANET, became the CEO of the new subsidiary – Telenet, that went into operation in 1974 offering packet-switched data communications commercially. Telenet also set out to plan a new international data-networking standard and quickly began working on packet-switching standards with the ITU, the organization that set standards for world’s telephone organizations.

Generally called PTTs (Post, Telephone, and Telegraph), these organizations were nearly universally controlled by the governments of their respective countries. They were concerned that privately owned data networks would cut them economically out of potentially profitable new services and were thus motivated to facilitate the new standards that would allow them to manage and tariff (price) international data flows. They were also politically concerned that proprietary data networks would become “Trojan Horses”, allowing sensitive national information to pass easily through their borders.

Roberts negotiated a series of new protocols that left more control at the level of the telecommunications network rather than at the individual host (as it would with TCP/IP). The X.25 and related X.75 protocols allowed countries to set up their own public-switched data networks such as Uninet, Euronet and the Nordic Data Network. The new data communications standards would not end the economic and political debates. In fact, they would just begin, as packet-switching networks began to have a revolutionary new role as a major conduit for a brave new world of electronic money and international news. Before email and the World Wide Web, electronic money was the “killer app” for data networking.

Using the new X.25 series of packet-switching protocols embraced by the ITU, banks developed extensive international networks and clearinghouse systems to offer information services for the movement of credit information and money and to settle accounts. The supranational fund of electronic eurodollars that emerged out of the OPEC surpluses of the 1970s’ oil crises an provided an important step to the global Internet as the packet-switched technology was implemented in banking networks to coordinate the resultant flows of international currency exchange and debt. This newly forming regime of electronic money led to dramatic transformations of the world’s electronic infrastructure, including the privatization of the global satellite system and national telephony systems that had previously set up formidable obstacles to the flows of digital communication.

Anthony

Anthony J. Pennings, PhD has been on the NYU faculty since 2001 teaching digital media, information systems management, and global political economy.

Comments

Leave a Reply





  • Referencing this Material

    Copyrights apply to all materials on this blog but fair use conditions allow limited use of ideas and quotations. Please cite the permalinks of the articles/posts.
    Citing a post in APA style would look like:
    Pennings, A. (2015, April 17). Diffusion and the Five Characteristics of Innovation Adoption. Retrieved from http://apennings.com/characteristics-of-digital-media/diffusion-and-the-five-characteristics-of-innovation-adoption/
    MLA style citation would look like: "Diffusion and the Five Characteristics of Innovation Adoption." Anthony J. Pennings, PhD. Web. 18 June 2015. The date would be the day you accessed the information. View the Writing Criteria link at the top of this page to link to an online APA reference manual.

  • About Me

    Professor and Associate Chair at State University of New York (SUNY) Korea. Recently taught at Hannam University in Daejeon, South Korea. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, media economics, and strategic communications.

    You can reach me at:

    anthony.pennings@gmail.com
    anthony.pennings@sunykorea.ac.kr

    Follow apennings on Twitter

  • Traffic Feed

  • Recent Posts

  • Pages

  • RSS CNN.com – RSS Channel – App Tech Section

    • Untitled
      Just as we now realize that fast food was "engineered to addict us," says author Franklin Foer, we must recognize the role that Big Tech plays in "shaping our future as a species."
    • Untitled
      One Russian-linked campaign posing as part of the Black Lives Matter movement used Facebook, Instagram, Twitter, YouTube, Tumblr and Pokémon Go and even contacted some reporters in an effort to exploit racial tensions and sow discord among Americans.
    • Untitled
      The Rosetta spacecraft was launched in 2004 and arrived at Comet 67P/Churyumov-Gerasimenko on August 6, 2014, becoming the first probe to rendezvous with a comet. On November 12, Rosetta dropped its Philae lander to the comet's surface -- another first. But Philae bounced and didn't grab onto the comet in its designated landing spot. After […]
    • Untitled
      Digital artist Jan Frojdman spent three weeks shifting through 33,000 images obtained from NASA to create this 3D model of Mars.
    • Untitled
      Members of the Cassini mission say goodbye to the spacecraft, their coworkers and some long-held traditions.
  • October 2017
    M T W T F S S
    « Aug    
     1
    2345678
    9101112131415
    16171819202122
    23242526272829
    3031  
  • Crossword of the Day

  • Disclaimer

    The opinions expressed here do not necessarily reflect the views of my employers, past or present.