Marcelo Oliveira: The Router is the Next Strategic Battleground for ISPs

Amazon’s recent announcement of backup internet capabilities through its eero platform may look like a simple resilience feature. But it signals something more significant for the broadband industry.

As large technology platforms extend from cloud infrastructure into the home network itself, they are beginning to occupy a layer of the digital home that historically belonged to Internet Service Providers. Companies like Amazon, Google, and Apple increasingly control the software environment inside the home, even when the connectivity itself is delivered by an ISP. The question for providers is no longer just how fast their networks are, but who ultimately controls the intelligence inside the home.

The intelligence layer is moving up the stack

For years, broadband competition has centered on speed, coverage, and price. These remain important differentiators, particularly as federal and state broadband initiatives expand infrastructure investment.

At the same time, the complexity of the in-home network has increased dramatically. Households now rely on dozens of connected devices, including streaming platforms, gaming systems, security cameras, voice assistants, and a growing range of smart appliances. According to Parks Associates, more than 70 percent of U.S. broadband households now own at least one smart home device, and adoption continues to grow.¹

As device density increases, managing performance, reliability, and device interaction inside the home becomes more important. This complexity is shifting attention toward the software and intelligence layers that oversee the home network.

Platforms that provide visibility into device behavior, network health, and user experience are becoming an increasingly important part of the connected home ecosystem. For broadband providers, this shift does not diminish the importance of infrastructure. Instead, it expands the opportunity to deliver services that improve how connectivity is experienced inside the home.

Broadband economics are under pressure

At the same time, the economics of broadband are evolving. Operators are investing heavily in fiber expansion, network upgrades, and next-generation wireless technologies, while competitive overbuild in some markets is increasing pricing pressure and churn risk.

Meanwhile, average revenue per user (ARPU) for broadband services has remained relatively flat in many markets, even as infrastructure investment continues to rise.

Research from Deloitte notes that many telecommunications providers are exploring value-added services and digital home capabilities to differentiate beyond raw bandwidth.² Managed Wi-Fi platforms, network analytics, and device-level diagnostics are becoming tools for improving customer experience while creating opportunities for recurring revenue.

The strategic risk is that if intelligence, device control, and automation move into third-party platforms, broadband providers may end up delivering connectivity while others capture the higher-value digital services layer.

These dynamics are encouraging providers to reconsider their role inside the home.

Trust is an asset, but not a strategy

One of the most persistent challenges in the smart home environment is fragmentation. Consumers often manage devices across multiple ecosystems, each with its own application and support model.

When performance issues occur, it can be difficult to determine whether the problem originates from the network, the device, or the application itself.

Research from McKinsey & Company shows that reliability and ease of use remain among the most important drivers of smart home adoption.³ When problems arise, customers frequently turn first to their broadband provider for help, even when the issue ultimately involves a third-party device or platform.

Broadband providers therefore already occupy a trusted position in the connected home. However, trust alone does not define how that role evolves. Providers must decide whether they remain primarily connectivity providers or expand their role as coordinators of the broader digital home experience.

Consumers will pay for simplicity and support

For many households, the challenge of the smart home is not the availability of devices but making them work together reliably. Consumers often encounter fragmented experiences: devices from different manufacturers that are difficult to integrate, automations that stop working after firmware updates, and troubleshooting processes that require navigating multiple apps.

When something breaks, it is rarely clear whether the issue originates from the device, the application, the cloud service, or the home network itself. As a result, customers frequently experience frustration diagnosing and resolving problems across disconnected platforms.

This creates an opportunity for Internet Service Providers. Because ISPs already manage the connectivity layer linking these devices, they are well positioned to provide tools that offer visibility into the home network and connected devices.

Applications that provide device discovery, network-level diagnostics, and proactive troubleshooting can help identify problems more quickly and reduce the burden on consumers. 

By helping households understand how their devices interact—and by assisting when automations fail or devices disconnect—providers can simplify the smart home experience while improving reliability and customer satisfaction.

Intelligent living as a service

In response to these trends, some broadband providers are expanding their service portfolios beyond basic connectivity.

Managed Wi-Fi, smart home integration, proactive network monitoring, and security services are becoming increasingly common components of broadband offerings. Emerging technology platforms are also making it easier to unify control and visibility across home networks and connected devices.

Platforms designed for residential environments allow service providers to manage Wi-Fi performance, connected devices, smart home systems, and network health through a single interface. By combining device management, network intelligence, and AI-driven diagnostics, these platforms can simplify installation and support while giving homeowners clearer insight into how their digital home is functioning.

A strategic inflection point

The continued growth of streaming, remote work, gaming, and smart home technologies is transforming how households interact with their networks.

Technology companies, device manufacturers, and service providers are all exploring ways to improve visibility, reliability, and control within the home. As these ecosystems evolve, the strategic question for broadband providers is not whether connectivity will remain essential—it clearly will—but how providers choose to participate in the broader digital home experience.

The next phase of broadband competition may therefore be shaped not only by network speeds, but by who controls the intelligence layer of the home network.

ISPs already operate the infrastructure that connects the modern household. The question now is whether they remain providers of connectivity alone or evolve into providers of intelligent digital living services built on top of that network.

The answer may determine who ultimately owns the customer relationship inside the connected home.

References:

1. Parks Associates. (2024). Smart Home Market Assessment: Connected Device Adoption in U.S. Households.Referenced in The Intelligence Layer Is Moving Up the Stack.
2. Deloitte. (2024). 2024 Telecommunications Industry Outlook.Referenced in Broadband Economics Are Under Pressure.
3. McKinsey & Company. (2023). The Future of the Connected Home: Consumer Adoption Trends.Referenced in Trust Is an Asset, But Not a Strategy.

Marcelo Oliveira has worked in the telecommunications industry since the early 2000s, building and scaling value-added service portfolios across global and regional operators in Brazil, Canada, Latam and the Caribbean, and the U.S. His career spans leadership roles in product management and business development at Brasil Telecom, Bell Canada, Cable & Wireless Communications, Frontier Communications, and Calix. This Expert Opinion is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.