TCP/IP Choice Also was a Business Model Choice

Every now and then, when trying to explain to regular people how networks support the internet, one also realizes how much networks have changed over the last 50 years. Diagrams back then would have emphasized switches more than transmission; local loop more than wide area network; fixed network to the exclusion of mobile; hierarchical call flows more than horizontal data routing. 

To some extent it remains true that we can diagram traffic flows separately from switching operations, only routers and servers are the nodes. 

Computer networking including X.25 featured much flatter networks based on peering relationships between switches. Details of the transport and access networks were relatively immaterial. 

So these days we routinely abstract the details of the WAN when diagramming local networking. There are edge devices and users and servers located somewhere “in the cloud.” One might argue that details of the network always are hidden from end users. These days, even network architects routinely abstract those details, spending most of their time on the edge devices (servers and client devices). 

source: Researchgate 

One might still argue that most of the complexity remains at the edge and in the local or “last mile” networks. It remains true that the bulk of total network cost resides in the local or access networks, not the wide area transport network. 

source: Asian Development Bank 

Functionally, all public communications networks now are data networks. That has enormous business model ramifications as well. Where is the value in a data network? At the edge: end user devices; servers; software and solutions. Data transport is a cost and necessity: it must be present, but beyond that, value lies in the devices, software and business problems solved. 

Physical media choices have changed quite a lot. Fixed networks now include hybrid fiber coax networks, mobile access and Wi-Fi as building blocks for local connectivity. 

But the biggest change is that all networks now are essentially open (though governments still can block traffic), not closed. Use of networks is permissionless. No business relationship has to exist between any application and the network resources that app uses. No business relationship has to exist between a user’s choice of apps and the network, beyond access to the network itself. 

Most of the business model issues connectivity providers now face can be traced back to the switch in network architecture. In choosing data network protocols, and choosing to become data networks, connectivity providers also opened the door to “dumb pipe” value propositions.