Metcalfe's Law does not lead to conclusions as obviously counterintuitive as Reed's Law. But it does fly in the face of a great deal of the history of telecommunications: if Metcalfe's Law were true, it would create overwhelming incentives for all networks relying on the same technology to merge, or at least to interconnect. These incentives would make isolated networks hard to explain.
To see this, consider two networks, each with n members. By Metcalfe's Law, each one's value is on the order of n2, so the total value of both of these separate networks is roughly 2n2. But suppose these two networks merge. Then we will effectively have a single network with 2n members, which, by Metcalfe's Law, will be worth ( 2n ) 2or 4n2--twice as much as the combined value of the two separate networks.
Surely it would require a singularly obtuse management, to say nothing of stunningly inefficient financial markets, to fail to seize this obvious opportunity to double total network value by simply combining the two. Yet historically there have been many cases of networks that resisted interconnection for a long time. For example, a century ago in the United States, the Bell System and the independent phone companies often competed in the same neighborhood, with subscribers to one being unable to call subscribers to the other. Eventually, through a combination of financial maneuvers and political pressure, such systems connected with one another, but it took two decades.
Similarly, in the late 1980s and early 1990s, the commercial online companies such as CompuServe, Prodigy, AOL, and MCIMail provided e-mail to subscribers, but only within their own systems, and it wasn't until the mid-1990s that full interconnection was achieved. More recently we have had (and continue to have) controversies about interconnection of instant messaging systems and about the free exchange of traffic between Internet service providers. The behavior of network operators in these examples is hard to explain if the value of a network grows as fast as Metcalfe's n2.