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Icann President Debunks Internet Economics

ICANN President Rod Beckstrom

Metcalfe's Law is fundamentally flawed, says ICANN President Rod Beckstrom.


New ICANN president Rod Beckstrom has proposed an economic model for valuing computer networks. In his speech at the recent Black Hat USA 2009 conference in Las Vegas, Beckstrom maintained that Metcalfe's Law, which posits that the value of a network is equal to the number of network nodes squared, is fundamentally flawed. As an alternative, Beckstrom suggested establishing the value of a network based on how many transactions occur.

"The value of the network equals the net value added to each user's transactions, summed up for all users," he said. Beckstrom developed this model with Google's Vint Cerf. If adopted, the model would change the way many companies view their value, as well as help them to quantify the value of the work done by network administrators and security officers.

Beckstrom argued that using this model, chief security officers can see that security is not an investment but a cost to reduce loss. He argued that increasing Internet security with better technology and law enforcement, harsher legal penalties, and reducing the total value that can be gained from a specific target, discourages hacking by decreasing its profit margin.

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Abstracts Copyright © 2009 Information Inc., Bethesda, Maryland, USA


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