Red light, whatever its source, doesn't travel far through water, which suggests these communications are intended to be private, seen only by nearby fish of the right species. There are several lines of evidence to support this, says [Nico Michiels of the University of Tübingen Michiels]. "Most of these fish are small and live at the bottom in pairs or groups. They are generally quite cryptic but often have conspicuous behaviours characteristic of the species. And there's obvious variation in markings between closely related species, which suggests they might be important in species recognition."-- from Code red: How deep reef fish keep in touch
It all sounds very plausible. "The idea of red-light private communication channels is intriguing," says Julian Partridge, head of the Ecology of Vision group at the University of Bristol, UK. He says that if a fish can signal important things without being noticed, there can be big pay-offs. "Long-wave light doesn't travel far under water, so a male fish can wave its red sexy bits at a female and not be noticed by animals further away. Not only will that reduce his chances of being eaten while distracted with flirtation, but it will also make him less likely to be beaten up by a rival."
Michiels suspects that red fluorescence has another important role for some reef fish: helping them blend in with their background rather than making themselves seen. During his first dive with the red filter over his mask, he noticed that reef corals and algae glow a dark but faint red too, with brighter patches here and there. Against this irregular red background, a fish that glows red all over, like the small wrasse, would be hard to spot.