IF U.S. BROADBAND ADOPTION HAD FOLLOWED industry predictions, homes and businesses of all sizes would be equipped with a variety of multimedia applications powered by broadband connectivity. Broadband appliances would connect to customizable entertainment programs, movies-on-demand and streamed Internet radio. Communicating over video-enabled IP phones, or holding videoconferences complete with application sharing and other collaborative tools would be an everyday activity. We might check in on children at day care centers or “virtually visit” parents in assisted living facilities via a broadband service. A web conference with a leading specialist regarding a health matter or an online wellness program tuned to our unique physiological requirements would be possible. Participating in distance learning at our favorite university or earning a degree in a virtual classroom would occur from the comfort of our homes.

While broadband adoption has been much slower than predicted with only some of the aforementioned applications recently becoming available, it is finally becoming a reality in the U.S. and key global markets. While a number of factors have converged to set the stage for widespread broadband adoption, a key hurdle remains.

What’s stalling broadband deployment is a mismatch between the capabilities of the broadband infrastructure and the desires of broadband users. The way in which broadband providers deliver and bill for connectivity—a set monthly price for a specified amount of bandwidth regardless of how much of that bandwidth is used—sets the stage for a revenue model that financially penalizes providers who roll out bandwidth-hungry multimedia services. There is simply no incentive for providers to roll out services that consume more bandwidth because no additional revenue is tied to those services.

For broadband to become ubiquitous, providers must move from a static model of delivering and billing for bandwidth to a fluid service delivery model where bandwidth is the underlying infrastructure and billing occurs based on the type of service being offered. After all, the real value to broadband users lies in the new services the technology makes possible.

To understand the state of broadband in the U.S. and its future potential, it’s helpful to look at certain Asian markets, where broadband has been widely deployed. Hotspots like Korea and Japan provide an example of how the availability of high-speed, affordable access has spawned broadband-enabled applications and fast uptake.

Korea and Japan both have extremely high rates of business and consumer broadband adoption. DSL is the broadband access of choice, with 12.3 million DSL lines deployed in the Asia Pacific region. South Korea has 6 million lines, while Japan is second with 4.2 million DSL lines, according to research firm Point Topic. Broadband is typically offered to consumers at a whopping 8-12 Mbps in Japan and up to 20 Mbps in Korea. Not surprisingly, bandwidth-intensive multimedia applications such as online gaming and video communications have followed with new applications being developed all the time.

With never-before-seen amounts of bandwidth now offered to most homes and businesses, it’s only natural that bandwidth-intensive services have followed to rapidly subsume the available bandwidth. While Korea and Japan have shown the promise of widespread deployment, broadband providers in Asia also lack the service delivery infrastructure required to intelligently bill on a per-service model. As a result, broadband providers in Korea and Japan are already looking to upgrade their infrastructure. Their goal is to move beyond large, always-on pipes to an intelligent infrastructure that auto-senses whether the consumer has called up a movie on demand with a per movie charge or a videoconference service that bills by the minute. Billing would then be based on the services consumed.

For those who may doubt that broadband applications will become pervasive beyond key hotspots to change the way entertainment, education and communications occur on a global basis, just wait. History has repeatedly shown huge demand for valuable new technologies, resulting in mass markets for related appliances and content as well. Television, for example, has spawned cable and satellite TV, VCRs, DVD players, DVRs and associated television programming and advertising content industries.

Yet, to reach widespread adoption, any new technology must overcome purchase objections that tend to stall deployment. Shifting our focus to the U.S., it’s clear that a number of factors are converging to move broadband from hype to reality. Let’s take a look at U.S. broadband delivery in the context of these criteria.

First, service must be available. Businesses have been frustrated by the months it can take for connectivity. Consumers have been deterred by providers marketing broadband services to them, only to find that they are not available in their area. This has slowly changed as 75% of U.S. homes now have some sort of broadband access. So, the availability issue has been largely solved.

Next, broadband service must be easy to use. Millions of untapped broadband users such as small businesses and consumers have neither the time nor the expertise to spend hours attempting to configure broadband connectivity appliances. That’s one of the main reasons cable modems have overtaken DSL to become the dominant broadband technology for U.S. consumers. Self-installation has done much to address ease-of-use. Another factor aiding broadband ease-of-use is the increasing comfort the average U.S. household now has with Internet technology. Home networks are becoming more common and a majority of the population has been exposed to web-based services either at home, at work, or at school. This familiarity will help ease the adoption of broadband delivery appliances. Broadband providers who offer the easiest user experience will have an even greater advantage. AOL is a perfect example of this, as their ease of use in the early stages of the dial-up Internet market allowed the company to capture significant market share and a loyal user base.

Finally, broadband providers must provide new value to justify the additional cost to households that already allocate dollars to entertainment and communications services such as cable television, movie rentals, and cell phones. There must be broadband services that users will pay to receive. Numerous studies have shown that consumers place a high perceived value on multimedia applications, which often require broadband for satisfactory delivery. Companies such as RealNetworks, which has nearly 1 million subscribers for its streaming audio and video service, have shown that consumers will pay for multimedia content.

While demand factors that will drive broadband adoption are coming together, it is up to broadband infrastructure equipment providers to allow broadband service providers to deliver and bill for the broadband-enabled services that will drive widespread deployment. Providers will then have the ability to bill for the specific services consumed. This also benefits broadband service users. Instead of forcing them into a model where they pay for a certain amount of bandwidth regardless of what they do with it, they will receive and pay for only the services they find valuable.

So, what specifically is required at the broadband infrastructure level? To begin with, it requires network level intelligence that goes far beyond ensuring bandwidth delivery. This infrastructure must add a new level of intelligence to deliver exactly the right user experience for the service offered. That means neither too much bandwidth nor too little. For example, streaming video requires better quality than just plain Internet connectivity that must only be good enough for a satisfactory web browsing experience.

After delivering the services desired with the quality required by users, the broadband infrastructure must contain the intelligence to capture usage data on a per-service level and bill the consumer specifically for those services. For example, a consumer may have a video appliance in their home that is tied into their broadband infrastructure. This appliance might offer video streaming, video-on-demand or video conferencing services. Each of those services may have its own billing model. The user may be billed a monthly charge for a broadcast video package, per movie for video-on-demand, or per minute for video conferencing sessions.

It’s these types of broadband services that consumers and businesses find valuable, and are the keys to driving deployment. As the broadband infrastructure evolves to enable broadband providers to deliver and bill for any service they can imagine, I predict a wide range of valuable broadband-enabled applications, widespread adoption and profitable bandwidth service delivery models will follow.

Atul Bansal is the Co-Founder, CEO, and President of Laurel Networks, specializing in the application of IP technology into the service provider sector. As president of FORE Systems' Network Control Technology, an IP routing technology subsidiary, as well as director of FORE's multilayer Ethernet switching division, he led efforts that generated hundreds of millions in revenue. At Digital Equipment Corporation, he spearheaded the design of routers and led the implementation of the Integrated IS-IS routing protocol used today by many large ISPs.