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Federal funding of long-term research has not increased to cover the decline in industry support. No systematic efforts, such as took place for the semiconductor industry with SEMATECH, have emerged. Because the benefits of much telecommunications research cannot be appropriated by individual firms, therefore, public funding of such research appears necessary.

Before the emergence of the Internet and other data networks, telecommunications had a clear meaning: the telephone (and earlier the telegraph) was an application of technology that allowed people to communicate at a distance by voice (and earlier by encoded electronic signals), and telephone service was provided by the public switched telephone network (PSTN). Much of the U.S. network was owned and operated by American Telephone & Telegraph (AT&T); the rest consisted of smaller independent companies, including some served by GTE.

Then in the 1960s, facsimile and data services were overlaid on the PSTN, adding the ability to communicate documents and data at a distance—applications still considered telecommunications because they enabled new kinds of communication at a distance that were also carried over the PSTN. More recently, of course, communication at a distance
The NSF and the Defense Advanced Research Projects Agency (DARPA) have been the two primary sources of federal telecommunications R&D support. NSF, long a supporter of telecommunications R&D spanning a range of topics, has recently been increasing its attention to telecommunications R&D, with an emerging emphasis on new approaches to networking. DARPA, which funded a number of important telecommunications advances in the past (including elements of the Internet itself), has been shifting its emphasis toward more immediate military needs and giving less attention to long-term telecommunications research.

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