The govt. bought thousands of miles of dedicated circuits by the time the Internet was privatized. There were a number of companies founded just to build the internet, almost exclusively for the government. These companies would be UUNet, BBN Planet, and others. All government (defense dept.) contractors.
In 1985, I worked at 3Com, one of the major networking companies, and we had a Vax running Unix that was connected to Usenet via POTS. Meanwhile, our interns who went to Stanford had accounts on the school network. Via Usenet, an email from Mountain View, CA to Virginia took 2-3 days to reach the destination. Those guys who sent mail from Stanford accounts got their emails delivered within seconds.
The WAN that connected the universities and research facilities was hugely expensive and very fast for its day. A T1 circuit in those early days cost maybe $10,000 for a short distance, and the university backbone was all T3 circuits (45x faster, more expensive). The circuit pricing was based on miles; the longer the circuit, the bigger the cost.
Not only did the govt. purchases of circuits become a cash cow for the telcos, all the equipment needed to connect it up built up a number of high tech companies and drove the development of bigger and faster communication technologies, primarily fiber optics. Companies like Cisco came into existence primarily to make routers for the Internet.
The privatization of the Internet further fueled private sector growth, obviously. But early on, Southern Pacific Railroad started a telecom company, SP Telecom, that laid fiber optic cable nationwide. They built a special railroad car with a spool of fiber on it that trenched next to the railways as the train went down the track, and laid the fiber at the same time.
The private sector was doing its own thing at the same time as DARPA. There were services like CompuServe and AOL, and Microsoft was trying to compete with those with their MSN (Microsoft Network). All of those offerings were closed networks and proprietary technologies. Basically glorified BBS systems.
The world would be a vastly different place if not for Reagan's defense spending (investment in DARPA) and the eventual privatization of it. We probably wouldn't have Cable or DSL speed access (still dial up modems), and the whole experience would be like being connected to just S2 if you were an AOL user or just some other one site if you were an MSN user, etc. They likely would not have even exchanged mail.
TCP/IP is the low level protocol used to transmit data from one end point to another on the network. It was designed to be self healing, especially so if a city like Chicago were nuked by some enemy, the network would route the data around it and your emails would get through.
You act like the government spending huge sums of money (relative to what the biggest corporations make and spend) and contracting private companies is the same thing as the private sector doing all that with no help. It's just not right to disconnect government demand driving the private sector business decisions.
We wouldn't be sitting around today with smart phones and laptops and video game machines and personal computing devices of any kind if it weren't for government demand for the microprocessor. There were real military and scientific uses for microprocessors long before there were video games (one of the earliest commercial mass consumer of them).
The military designs and builds planes. The requirement for those planes includes flying fast and having computers to control weapons systems, navigation, and the like. Computers without microprocessors were huge and heavy, having lots of vacuum tubes and the like. At some point, they couldn't have gotten big and fast enough to control advanced weapons systems. They couldn't make (fighter) planes small and have enough horsepower to lift the goddamned things. In fact, our military superiority over the Soviet Union and their MIG type aircraft was demonstrated periodically when one of their pilots would land at guantanimo seeking asylum and we reverse engineered the planes to find they had those vacuum tube type computers.
Similarly, the Space Program created demand for microprocessors. The cost of every ounce of anything they launch is so expensive it was worth their while to seek lighter and lighter computers. The same for ICBMs and so on.
Heck, look at the early manufacturers and designers of microprocessors and you'll see a who's who of defense contractors. Companies like Texas Instruments (built lots of stuff for WW II), Fairchild, Rockwell, etc.
Carry on.
