Mike Apgar, CEO, Speakeasy

Two and a half years ago, it occurred to Mike Apgar, CEO of Seattle broadband provider Speakeasy, that selling high-speed Internet access was a money-losing venture. He assumed the rest of the industry knew it, too.

“I didn't know we'd end up with large, bureaucratic, uncreative companies that focused on commodity connectivity,” he said. “Why would you want to do that? It's not going to make any money.”

Apgar and his crew decided back then to use value-added services to make broadband pay off, selling faster ping times to online gamers and enhanced security for day-traders. But to win a wider audience, Apgar said the broadband industry will need to find ways to bring more rich content through its networks.

The problem with that? Most content providers accustomed to having publishers and distributors do all the footwork haven't yet found a reliable way to sell their wares online, especially one that would smoothly span dozens of disparate broadband providers.

“I see a real need for companies to mediate between the broadband networks and content providers that enable them to have one relationship that covers distribution and billing,” said Apgar. “But content providers don't have the operational block-and-tackle in place, and that's a big chunk to bite off.”

To lead content providers to the promised land, Speakeasy introduced Moses, a homegrown back office platform named for its ability to “part the Red Sea between content and broadband networks.” With it, Speakeasy linked arms with Valve Software, maker of popular “shooter” games CounterStrike and Half-Life, allowing customers to subscribe to video games rather than buy them. And in January, thanks to Moses, Speakeasy became the first broadband provider to fully integrate Rhapsody — the voluminous online jukebox service from Listen.com — into its back office.

Though Speakeasy has only begun to draw a crowd to these value-adds, Apgar expects these burgeoning applications to ignite broadband growth. To help fan the flames, he said, regulators should encourage nimble, independent firms rather than hand the industry over to phone and cable juggernauts.

“A lot of these content providers are like, ‘Oh, man. There's no way I'm going to deal with Qwest. Sure, they have coverage everywhere, but forget trying to get them to do unified billing,’” he said.

Parting the Red Sea was tough enough in Speakeasy's back office. Telcos and cable operators, however, would have to split oceans.—Ed Gubbins