Who Owns the Internet?

No one owns the Internet. This is a truism we can all stand behind.

But the infrastructure on which the global network runs is owned by a handful of powerful corporations that can, and often do, use control over the Internet backbone as a tool in business negotiations. Some fear their influence is strangling smaller companies and reducing customer choice.

"I can give you an example that shows that the Internet is owned by someone," says Jilani Zeribi, a senior analyst at market researcher Current Analysis. "Look at old peering arrangements, which were basically, 'I'll connect to your network, you carry my data and I'll carry yours.'"

"The carriers started to realize that smaller ISPs [Internet service providers] were free-riding on their network, so they started charging for peering arrangements," Zeribi says.

In the Hands of Few

A relatively small number of companies own and operate the fiber and the cables of the Internet infrastructure. They include AT&T, UUNet (a division of MCI WorldCom), GTE's Internetworking, Global Crossing, Qwest Communications International, and PSINet.

It's nearly impossible to measure exactly who owns how much. It's generally accepted that UUNet owns 30 percent of the backbone, and AT&T claims the number-two spot.

Perhaps more important than ownership percentages are questions about what an ownership stake means. These companies have invested millions in building and maintaining the infrastructure. What kind of power do the Net owners claim, and how might they wield that power--either for good or for nefarious ends?

Another sticky issue relates to co-location, the place where a cluster of ISPs keeps their servers and other hardware. This is typically owned by a major vendor like UUNet. Other concerns relate to network access points, which is where ISPs trade packets with other ISPs.

NAPs are supposed to be neutral territory, not subject to squabbles like those over peering arrangements. But they aren't always. "Getting in and out of the NAPs is tricky," says Vince DiBiase, senior vice president and chief sales officer for ICG Communications, a communications service provider.

Open for Competition?

Some say the Internet business is so competitive that the threat of newcomers can always keep big players from wielding power unfairly. But DiBiase and others suggest large infrastructure players and large service providers bolster each other's position.

Again, he points to UUNet (whose parent company, MCI WorldCom, would not respond to inquiries for this report). UUNet provides Internet backbone for America Online. Given its millions of global Internet subscribers and its corporate growth, UUNet won't approach its AOL deal the same way as it does involving agreements with smaller ISPs.

Instead, AOL gets a much better pricing deal because of the huge volume of traffic it brings to the UUNet backbone. "That's a cost advantage that a smaller ISP doesn't get," DiBiase says.