The document discusses two network reference models: the OSI model and TCP/IP model. The OSI model has 7 layers - application, presentation, session, transport, network, data link, and physical. It defines the functions performed at each layer to allow for interoperability between vendors. The TCP/IP model has 4 layers - application, transport, internet, and network access. It combines functions of some OSI layers. Both models use encapsulation to break messages into packets at each layer for transmission across a network.