Active networking is the placement of user-controllable computing functionality in the switching nodes of a network. The end-to-end argument states that functions should be placed "in" the network only if they can be cost-effectively implemented there. We argue that active networking is a natural consequence of the end-to-end argument, because certain functions can be most effectively implemented with information that is only available inside the network. We propose a performance model for quantifying the benefit of implementing a particular functionality solely in the end system versus implementing it through a combination of end system and network support. We show how the model applies to specific services, including congestion control and reliable multicast.