Moral Outrage Over "Loosely Coupled Networks" is Misplaced

Lots of start-ups find they actually change revenue models models on the way to building a sustainable business, compared to what they originally were funded to undertake. But there are lots of more-subtle ways businesses wind up providing value in the Internet ecosystem, for end users and other business partners, even when nothing “Internet” is actually directly related to their actual revenue streams.

These days, it is common for Internet service providers, for example, to lament the way value, revenue and equity valuations are created by successful application providers who do not have a formal and direct relationship with access providers.

That leads to ISP efforts to create such business and therefore revenue relationships between some popular application providers. One might say there is almost a sense of moral outrage that in a loosely-coupled ecosystem, companies are able to build big, valuable Internet-based businesses without necessarily having a direct business relationship with any access provider.

One might well argue that a healthy ISP business, broadly defined, is in the consumer interest, the public interest or  the national interest. One might well debate various ways to ensure that this outcome is achieved.

But some of us might argue that the sense of moral outrage is misplaced. One might argue that telecom service providers would not have preferred the loosely-coupled “Internet” as a major communications architecture able to rival their own “closed” and tightly-coupled networks.

One might argue about the degree to which telecom organizations and interests, as opposed to “Internet” organizations and interests, “created” the Internet. But it is hard to argue that telecom interests did not help create the protocols and networks, or that global service providers have not selected Internet Protocol as the foundation of their next generation networks.

That is not to say that all IP networks are “the public Internet,” or that all business models using IP are equivalent. They are not.

But the moral outrage about loosely-coupled networks is more than a bit wrong. Everyone now agrees that this is the way software gets written and that this is the way modern networks operate. The actual ownership of applications and services will vary (some tightly coupled, but most only loosely coupled).

But loose coupling (“over the top” apps) is the way we all have decided modern networks will work. That is not to say, as some once did around the turn of the century, that “bandwidth wants to be free.” That is not to argue the importance of maintaining viable access networks, or the legitimate challenges that have to be faced as massive changes occur in ISP revenue sources.

But the moral outrage really is misplaced. The layered model, by definition, presupposes separation of the application and other layers, including physical and transport layers. It therefore is not surprising at all that new revenue models and business categories now exist, and that such businesses exist without the “permission” of participants working at other layers.

The emergence of loosely coupled networks is profoundly disturbing for legacy access providers, to be sure, even if all service providers now accept such models as the foundation of their own next generation networks.

But any sense of moral outrage or entitlement is wrong and misplaced. Without question, we will need viable and profitable ISPs to support the Internet ecosystem. And video applications do pose issues for ISPs that are very complicated and challenging in a loosely coupled framework.

But that’s the nature of the networks we all have chosen to build and use. In that sense, and without diminishing the legitimate need for strong, financially viable ISP businesses, moral outrage probably is not helpful.

This is the communications world we all have chosen to live in, and some would argue it is a good model. The magnitude of transition issues for access providers should not be underestimated. But in a loosely coupled world, application providers create value, they do not steal it.