Won't a thousand small operators be encouraged to maximize engagement to maintain their tenuous existence, and thus keep up or even accelerate the outrage cycle? This is exactly what we've seen with a thousand small content providers; why will having a thousand aggregators fix it?

There's similar questions for privacy and security. Why would smaller operators - under less scrutiny - resist the temptation to sell or exploit detailed user data? This was the Uber model, after all: Give every employee full access to the DB until the company is big enough that anyone cares. How many small companies have terrible privacy practices that we've just never heard about?

If you're paying a monthly fee or buying hardware, they don't care how much time you spend using it as long as they get your money, so that's a different incentive.

The ad-supported model is more profitable specifically because of the network effect -- you get more users when you don't charge money and the bigger network is more network effect. But then the users don't have a real choice; the biggest network with everybody on it is the one funded by ads.

In a federated network, you choose the provider who makes the algorithm and can choose one whose business model isn't selling your attention to advertisers, and you're still a part of the same network as people who choose differently. Then people aren't locked in, and when they realize that the algorithm whose purpose is to suck up all their time and spam them with ads is costing them way more than e.g. $10/month, which business model becomes more popular?