The assumption of SETI has been that an advanced civilization is broadcasting a narrow-band (in the 'water hole' and possibly modulated) omni-directional signal

The assumption of SETI has been that an advanced civilization is broadcasting a narrow-band (in the 'water hole' and possibly modulated) omni-directional signal using a large amount of energy. We can see stars across the galaxy (and, indeed, in other galaxies), so by using some large fraction of a star's energy this should be possible. We're not far from having the telescope technology that enables us to spectrally sample the atmospheres of extrasolar planets to detect gases that are associated with life (as we know it) and even of technological civilizations (e.g. chlorofluorocarbons). This is a form of SETI too. Using such technology, an alien civilization could beam signals to selected planets that show such signs and save the energy of broadcasting omnidirectionally. The purpose of SETI is not necessarily to confirm such possibilities (my opinion is that civilizations like us are really rare at this stage of the Universe's evolution - maybe less than one per galaxy). But at least to rule them out.