Application innovation and financing is at the edge of the network

The Internet was conceived as an end-to-end, dumb network. The only function of the network was to route packets of information as efficiently as possible from one computer to another. The network routers are not aware of the content or data type of those packets. The network routers do not know if the packets they forward contain healthcare information or movies. They do not know who sent or who is receiving the packets, just their IP addresses.

The computers that run the applications -- the clients and servers -- are at the edge of the network. Content creation and innovation take place at the edges of the network. Every user is a potential application inventor and developer. The bulk of the cost -- people and equipment -- are also at the edge of the network.

This may be contrasted to the "smart" telephone network. The devices at the edges (primarily telephones) are cheap and simple, and the circuit switches are complex, expensive and designed to handle voice calls.

Applications like caller ID and voice mail run on computers inside the network. The computers are owned by the telephone company. The applications were designed by the telephone company, and it was they who decided to offer them.

Contrast that with Internet telephony (Voice over IP or VOIP). Many competing companies offer VOIP service with many options like conference calling, video calling, voice mail, caller ID with photos and user profiles, the ability to say you are "unavailable," etc.

These services run on computers owned by the users and the companies offering the service, not those of the network operators. The prices are low (or free) and anyone can enter the business and add new features.

The fact that anyone can decide to offer a service on the Internet also means more capital is available. The venture capital industry has been instrumental in funding Internet start-ups. Even if start-up companies are small, there may be an unlimited number of them.

It also means a small business with a small, specialized audience may be viable. A large record company can only afford to produce and promote a few albums per year, but thousands of musicians can survive selling to a small fan base. Sales may be small, but so are the costs of production and distribution. (See the class note on the long tail).

Once applications are developed, the network provides a platform for deployment and testing. For example, after writing the first Web server and browser program, Tim Berners-Lee put it on the Internet, and invited people to download and try it. Companies regularly publish early (beta) versions of their software and invite the user community to find bugs and suggest changes. Software can evolve continuously.

As you see in these papers, the Internet architects intended it to be an end-to-end network:

Saltzer, J. H., Reed, D.P. and Clark, D.D., End-to-end Arguments in System Design, Second International Conference on Distributed Computing Systems (April 1981) pages 509-512. Published with minor changes in ACM Transactions in Computer Systems 2, 4, November 1984, pages 277-288.
Isenberg, David S. The Dawn of the Stupid Network, Networker 2.1, February/March 1998, pp. 24-31.

Large ISPs like Verizon and SBC would like to re-engineer the Internet so they could charge rates that depend on the application, type of data or user. You can read and hear more on the politics surrounding these proposals at:

The end of the Internet?
Revising the 1996 Telecommunications Act
Larry Lessig audio on applications at the edge of the network
New York Times editorial
Vint Cerf's letter to the congressional committee conducting hearings on this issue
Audio roundtable discussion of deep packet inspection

Governments may also interfere with the end-to-end principle, for example, the Chinese government puts limits on the end-to-end design principle, and you can hear the result.

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