The document discusses network layer design issues related to connectionless and connection-oriented services. Connectionless services route each packet independently, while connection-oriented services establish a logical connection and route all traffic for that connection along the same path. Virtual circuits use connection-oriented services, pre-determining the route and maintaining state information for each connection. Datagram subnets are connectionless, routing each packet independently without state information. Virtual circuits provide easier quality of service and congestion control while datagram subnets are more robust to router failures.