In the universe of people who’ve experienced the value of a persistent broadband network, I don’t think many would disagree that it’s transforming. Where we seem to do battle is how that network should be delivered. Given the worsening global economic outlook, the biggest of those battles is not which technologies will deliver the Anywhere Network, it’s about how the economics will work.

The dirty little secret–no, make that the dirty big secret–is that the widespread adoption of broadband connectivity, whether in the fixed line world or the wireless space, is mostly headed towards uneconomic. Revenues going to network providers for broadband connections are largely based on flat-rate pricing. But the costs to deliver that experience are not fixed; they vary widely depending on how much the connection is used. Thus as usage goes up, revenues stay flat but costs rise.

And usage is not going backwards. As Cisco observed in its launch yesterday of a capacious new edge routing platform, Internet traffic is doubling about every two years. So back to our flat-revenue, rising-cost problem. I call it the Anywhere Network profit gap. It’s already a big concern to network service providers. But we all need to care, because as a global community, we won’t be able to build a successful Anywhere Economy on the back of a network that depends on the charity of its providers. What to do?

• Change the cost model. I’m not YG’s network equipment geek–that job is in the capable hands of the redoubtable Jennifer Pigg–but what I get from Cisco’s launch is that in creating dramatically higher capacity at the network’s edge, and providing some CDN function collapsed into the router itself versus a separate overlay network, the network can be more efficient at handling big loads like video.
• Change the revenue model. This is going to be very hard work, and all the more reason it has to start immediately. The big shift that has to happen first is a cultural and mental one: from a one-to-one, you-use-my-network-I-send-you-a-bill subscriber mentality, to a multi-stream revenue structure that combines cost contribution from users with other sources, in much the same way that a publisher (subscription, advertising, list rental, conferences) or a sports team (stadium tickets, concessions, TV fees, merchandise) does.

If you’re a network provider, you already know this. The question is, how hard are you pushing towards these two fixes?  The schizophrenia you will have to live with next year is in continuing to invest in your network to support this while you watch everyone else around you cut spending like crazy. 

If you’re not a network provider, please approach the net neutrality discussions, which appear likely to ramp up again in the U.S. with a Democratic administration, with a constructive mindset. If the money doesn’t come from creating variable pricing based on servicing the burgeoning network load, it’s got to come from somewhere else.