In 1957, the Soviet Union launched the first satellite, Sputnik I, promoting U.S. President
Dwight Eisenhower to created the Advanced Research Projects Agency (ARPA) to regain the technological lead in the arms race. ARPA (renamed DARPA, the the Defense Advanced Research Project Agency, in 1972) appointed J. C. Licklider to head the new Information Processing Techniques Ofice (IPTO).
Licklider was given a mandate to further the research of SAGE system. SAGE system was a continental air-defense network commissioned by the U.S> military and designed to help protect the United States against a space based nuclear attack. SAGE stood for Semi-Automatic Ground Environment . SAGE was the most ambitious computer project ever undertaken at the time, and it required over 800 programmers and the technical resources of some of the America’s largest coporations. SAGE was started in the 1950s and became operational by 1963. It remained in continous operation for over 20 years, until 1983.
While working at ITPO, Licklider evangelized the potential benefits of a country-wide communications network. His chief contribution to the development of the Internet was his ideas, not specific inventions. He foresaw the need for networked computers with easy user interfaces. His ideas foretold of graphical computing, point-and-click interfaces, digital libraries, e-commerce, online banking, and software that would exist on a network and migrate to wherever it was needed. Licklider worked for several years at ARPA, where he set the stage for the creation of the ARPANET. He also worked at Bolt Beranek and Newman (BBN), the company that supplied the first computers connected on the ARPANET.
After he had left ARPA, Licklider succeeded in convincing his replacement to hire a man named Lawrence Roberts, believing the Roberts was just the person to implement Licklider’s vision of the future network computing environment. Roberts led the development of the network. His efforts were based on a novel idea of “Packet Switching” that had been developed by Paul Baran while working at RAND Corporation.
The idea for a common interface to the ARPANET was first suggested in Ann Arbor, Michigan, by Wesley Clark at an ARPANET design session set up by Lawrence Roberts in April 1967. Robert’s implementation plan called for each site that was to connect its computer to the network. To the attendees, this approach seemed like a lot of work. There were so many different kinds of computers and operating systems in use
throut the DARPA community that every piece of code would have to be individually written, tested, implemented, and maintained. Clark told Roberts that he thought the design was “bass-ackwards.” 
After the meeting, Roberts stayed behined and listened as Clark elaborated on his concept to deploy a minicomputer called an Interface Message Processor (IMP) at each site. The IMP would handle the interface to the ARPANET network. The physical layer, the data link layer, and the network layer protocols used internally on the ARPANET were implemented on this IMP. Using this approach, each site would only have to write one interface to the commonly deployed IMP. The host at each site connected itself to the IMP using another type of interface that had different physical, data link, and network layer specification. These were specified by the Host/IMP Protocol in BBN Report 1822.
So, as it turned out, the first networking protocol that was used on the ARPANET was the Network Control Program (NCP). NCP provided the middle layers of a protocol stack running on an ARPANET-connected host computer. The NCP managed the connections and flow control among the various processes running on different ARPANET host computers. An application layer, built on top of the NCP, provided services such as email and file transfer. These applications used the NCP to handle
connections to other host computers.