NEW YORK (FORTUNE) - In the ten years or so that I've been writing about the telecommunications industry, the story has always been about pipes.

In the late 1990s, phone companies raced to build out fat long-distance networks to carry vast streams of Internet traffic that never showed up. Then the wireless companies around the world pledged billions of dollars to build so-called "3G" networks that would turn cellular phones into mini computers, only to realize what they really needed was more network capacity to handle plain old wireless calls.

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More recently in the United States the phone companies and cable companies have been locked in a battle to deploy broadband connections to consumers' homes. The prevailing wisdom is that the company that controls the broadband connection will control the consumer's entire entertainment and information experience.

We all know that consumers are changing the way they watch television or listen to music. I believe the overused phrase is that consumers wish to be entertained by "what they want, when they want and on whatever device they choose." The cable and telephone industries think this is a rallying cry for "on demand" services - that consumers will need ubiquitous broadband so that they can tune into an episode of "Lost" whenever the mood strikes, wherever they happen to be.

But Murgesh Navar, founder and CEO of a small company called Podbridge, recently suggested to me that the real story isn't about pipes - it's about storage.

Navar says consumers are perfectly comfortable with the TiVo or Podcast model - they can simply time shift their viewing or listening by saving their favorite programming and taking it with them on a portable device. The key, however, is to have enough storage on that device to carry around entire music libraries or a big, fat movie files.

(Navar's point-of-view is self-serving: His company makes technology that helps creators of iPod programming track listeners and helps advertisers insert listener-appropriate ads into podcasts.)

Storage trumps pipes in lots of ways. It would be far cheaper to equip every consumer with a robust and portable hard drive than to build the ubiquitous broadband connections needed to create a truly "on demand" consumer experience.

This isn't lost on device makers, who are working on ways to pack even more storage capacity on cell phones, MP3 players and other pocket-sized gadgets. Samsung, for example, is getting ready to launch in Europe a cell phone with an 8 gigabyte hard drive, enough to store about 2,000 songs.

Navar isn't suggesting that people will watch all their programs on these devices. Instead, he says, a consumer may start a program on his big screen TV at home, store it on his gadget, watch a few minutes of it on the small screen while, say, riding the train, and then synch the device to a desktop or another TV at the office or the hotel room to finish his show. Yes, he'd need a broadband connection to download the initial program, but the rest of the experience would be entirely pipe-free.

That's probably a scary thought for the phone and cable companies, which have already spent billions of dollars to upgrade their networks for broadband - and are now trying to figure out ways to make those connections even stickier.

AT&T (Research), for example, is teaming up with Yahoo! (Research) to develop an Internet Protocol TV service that allows customers to access some of their online content, such as their Yahoo! photos or music, via their television screens. The idea is to couple connections with content people want, in the hopes that customers will stay loyal to their access providers.

Fortunately for the pipe providers and the storage makers, this isn't really an either/or situation. There will always be content that people will want to read, view or hear in real time - news, sports, even reality-show final episodes - and the pipe providers will benefit from those events.

I've seen executives use their mobile phones to check sports scores during meetings, or even watch short news clips on new mobile-broadcast phones. But for plenty of other content, such as favorite weekly television or radio shows, consumers are happy to download and go.

Navar doubts that storage and pipes will be packaged together. "Consumers will pick the pipe which gives them the greatest freedom to access their content," he writes in a recent e-mail. Put another way, he thinks people will have no loyalty to their broadband providers.

I'm not so sure about that. In fact, it wasn't long ago that telecom pundits were predicting that pipes would be so robust that they could actually be used as storage. That pipe dream has long since died, but why couldn't AT&T orComcast (Research) offer consumers a "locker" for movies, music and other entertainment as part of a monthly broadband service?

Now that seems like a great way to build customer loyalty, for as any New Yorker will tell you, you can never have enough closet space.

Plugged In is a daily column by writers of FORTUNE magazine. Today's columnist, Stephanie N. Mehta, can be reached at smehta@fortunemail.com.