Who Will Profit From Broadband Innovation?

Demand for broadband and the value of a broadband connection are both on the rise, even as the cost a service provider can charge for such connections drops. Figuring out a business model that benefits service providers and consumers -- and that continues to drive innovation -- was a key theme at "The New Broadband Buildout," a GigaOM Bunker Session held last week in our San Francisco office. The event, which featured heated debate about the fate of broadband innovation, also tackled the thorny issue of finding a broadband business model for future. While many in the audience said that carriers need to get out of the way and accept their dumb pipe status, David Morken, CEO of Bandwidth.com, and Sergio Catanaziti, an R&D executive from Orange Labs, the research arm of France Telecom, refuted that idea. Morken's company owns its own network, and although he accepts that bandwidth is a commodity, he offers enterprise customers voice service and other products on top of that network in order to turn a profit. The strategy is paying off; the company is approaching $100 million a year in revenue without ever having taken external funding.