Call CNGI the first-mover advantage to end all first-mover advantages. "[China is] looking to leapfrog the U.S.," says Michael Gallagher, who was assistant secretary of commerce for communications and information, and President Bush’s top adviser on Internet issues before joining the law firm Perkins Coie in February. According to Chinese and U.S. sources familiar with the project, the Chinese government has already invested close to $200 million in CNGI and has created a special office of the State Council dedicated solely to the project. China’s major telecommunications companies, each of which is responsible for building a portion of the network, have also spent hundreds of millions of dollars so far. Today, CNGI connects 100 universities, 100 research institutes and 100 companies in 20 cities. At the Beijing Olympics in 2008, China plans to use CNGI for everything from broadcasting the events to controlling the Olympic facilities.

The Coming Threat

The United States is still the undisputed leader when it comes to the Internet. "[But] we cannot let our current success become a liability, with a continued reliance on the present protocol, while everyone else moves forward," says Rep. Tom Davis (R-Va.), chairman of the House Committee on Government Reform.

But that’s exactly what’s happening, in large part because few people in the United States know the threat exists. "Over time IPv6 could revolutionize what we can do with the Internet," says David Powner, director of information technology management issues for the Government Accountability Office. "My concern is that we will get behind."

If China gets too big a head start, U.S. CIOs could be in the unfamiliar position of having to play catch up to the rest of the world—while paying as much as 30 percent more to manage their networks, according to estimates by the National Institute of Standards and Technology. Worse, organizations that lag behind the world in IPv6 adoption will be more vulnerable to hackers and other security threats. According to research by the U.S. Department of Commerce, the cost for an enterprise to build an IPv6 infrastructure is minimal if it is spread out over time as part of the normal technology refresh cycle. However, companies that wait until demand for IPv6 services emerge—either from overseas business partners or U.S. customers—could face a massive onetime hit in the ballpark of what it cost to fix the Y2K problem.

And while China’s first-mover advantage is by no means a given, China has already established itself as the world’s leader for IPv6, and, accordingly, is positioned in IPv6-related standards organizations. That could mean that the next-generation Internet is China-centric, the way the rest of the world feels the current one is U.S.-centric. "We used to be behind on the Internet," says Xiang Yangchao, executive vice president of Digital China Networks. "But we hope that we can become the leader of the IPv6 Internet."