Classroom Companion: Business

 
Chapter 4 · Digital Economy Ecosystem

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4
charging. This separation of services and networks is also one of the core premises 
of net neutrality (see 
7
Chap. 
21
)—the ISP cannot discriminate between different 
uses of the network and, therefore, cannot levy charges reflecting the value of the 
service offered by the ASP.
The businesses of the ISP and the ASP are independent in the sense just 
described. The businesses of the ISP and the ASP are also complementary in the 
sense that each needs the other to conduct its own business. The ASP cannot offer 
services without the assistance of ISPs, and the ISP does not create value for the 
consumers beyond that of transferring bits and providing basic communication 
services. Hence, the ISP needs the ASP to make the network attractive and useful 
for consumers, and the ASP need the ISP to deliver the services to the consumers.
One particular consequence of this decoupling of ASP and ISP functionality is 
over-the-top (OTT) media services in which the ASP offers services that tradition-
ally were supported by dedicated networks—such as the telephone network and 
cable television networks—without any involvement by the ISP other than sending 
the information in unspecified IP packets to the consumers. See 
7
Box 
4.2
 for 
Skype as a typical over-the-top telephone service. Note that voice over IP (VoIP) 
may not always be an over-the-top service since several VoIP applications require 
particular protocol support from the ISP, for example, using the Session Initiation 
Protocol (SIP) for establishing and deleting the call and supporting quality of ser-
vice management. In this case, the ISP can distinguish VoIP from other Internet 
services and levy charges based on this knowledge. The telephone service in 4G and 
5G mobile systems is a VoIP service of this type, but competition from Skype has 
limited the opportunities of mobile operators to levy differentiated telephone 
charges based on call duration and distance.