Integrate to innovate

Traditional telecom dies hard - even in the competitive carrier realm. Some thought processes - and physical processes - are so entrenched in how things used to be that even the most innovative companies can get lost in the traditional models.

But a new class of provider is stepping forward to change the service distribution model. So says Catherine Hapka, president of Rhythms NetConnections. Recently, she discussed the emergence of broadband integrators - companies that develop e-relationships with customers and use broadband connectivity to improve the performance and functionality of existing services. Bundling allows ISPs, for example, to add telecom services to the mix. Vertical applications will work, too.

In some cases, content providers are teaming with consumer goods manufacturers to create targeted Web sites. The manufacturer pays the content provider to place product information on a specific Web site, and the end customer can view the content for free.

That scenario is being played out with free Internet and voice-over-IP situations, but it often requires the consumer to listen to advertisements. Despite the claims, most people don't want to listen to ads to use services - think of how many remote controls are picked up during TV commercials.

In the case of the broadband integrator, the transactions are business-to-business. The recipients generally look at information they want and likely would need - not random information that is forced upon them. It s ounds like a winning situation for the business consumer, who gets free or discounted services. The consumer goods manufacturer also wins. It reaches a targeted customer base without putting - and paying for - feet on the street.

Another broadband integrator business model comes from Broadband Office, which prices office space inclusive of high-speed broadband access and other communication services. The company leasing space doesn't have to select providers for voice, data or other services. Broadband Office takes care of that, making its property more attractive and more valuable.

But there is another beneficiary: the bandwidth provider. The broadband integrator acts as an aggregator of sorts, delivering bundles of customers to the bandwidth provider. The more data that flows across the network, the more money that flows into the pockets of the fiber and access providers. And it lessens the marketing burden of reaching individual customers - business or otherwise.

Hapka is counting on it. Backbone providers can make a mint in this new service offering. They woo the content providers - which they already do - and the rest is up to their customers. The provider simply supplies the pipes. Of course, it's in their best interest to promote these relationships - more traffic equals more money.

Aside from their business agendas, however, the concept of a broadband integrator makes sense. Providers reach more customers with less effort. Users get communication services they need; service bundles encourage loyalty. That opens the floodgates to more - and more innovative - services, which in turn results in increased traffic flow for carriers.

Traditional telecom carriers take heed. Hapka, representative of the more forceful brand of competitor, suggests that the broadband integrator concept could leapfrog traditional carriers.

"The broadband integrator is more powerful - it has a total value proposition," she said. "It's not about voice and data anymore - that's telecom talk."