CABLE READY TO RULE THE ROOST

CableLabs recently issued specifications for CableHome 1.0, a standard that gives vendors a common approach to distributing residential broadband services. While the first step is data networking, cable hopes to tap a plethora of nontraditional cable devices in consumers' homes. So far, cable's got a jump on the telcos, but will its questionable service reputation shorten its lead in the home networking market?

Now that it has developed a bandwidth-rich hybrid fiber/coax access network and added an interoperable high-speed data platform on top, the cable industry is moving into its final phase of consumer access: piecing everything together into a home network.

By the end of 2002, vendors and service providers will have initial specifications on which to design and implement interoperable home networking equipment that will initially link multiple computers, then spread to other “smart” home devices. Called CableHome, the specification is the latest — though certainly not the last — DOCSIS layer built on cable's broadband access networks.

DOCSIS, going all the way back to its initial 1.0 specification, would be the foundation on which any CableHome device would work. CableHome itself is media-independent and can handle in-home transport over wireless. This generally takes the form of IEEE 802.11b, Ethernet over Category 5 cable, in-home twisted pair or in-home wiring, according to Rouzbeh Yassini, CableLabs' senior executive consultant.

CableHome is a cable-specific effort, but “if somebody wants to pick up the pieces and write them, within half a day you can rewrite them to make something useful for other things like DSL,” Yassini said.

No one seems inclined to do that right now, however, so if a subscriber wants CableHome-based home networking, that subscriber will need cable television and a DOCSIS platform. And so far, that means cable operators have a leg up in getting access to the home, which ultimately means networking the various electronics found therein.

DOCSIS is the last mile. CableHome is the last 100 feet,” said Yassini. “The next stage is to add more stacks with it, do video distribution within the home, do more quality of service and do more devices.”

Most cable operators already offer rudimentary non-CableHome home networks to complement or gain incremental revenues from their high-speed data services. Subscribers can, at an additional cost — about $5 to $10 per computer hookup — purchase hardware, installation help and monthly service from a cable provider to link one or more home computers.

“Everybody needs home networking,” said Cynthia Brumfield, president of Broadband Intelligence. “Most broadband subscribers would jump at that choice, as opposed to what they're doing now, which is jury-rigging whatever they can.”

Home networking is a point-of-sale add-on. Subscribers must first understand the value of an always-on high-speed connection, then determine “they need to be able to share that connection with other folks in the house,” said Erika Jolly, EarthLink's vice president of value-added services. The ISP offers retail-based home networking system hardware for $99 (wired) and $149 (wireless) and a monthly service fee of $9.95.

Some consumers prefer to use an ISP rather than a cable operator for their home networking, and ISPs such as EarthLink also build and service home networks that work off cable's access platform. The problem with cable-based home networking, critics say, is that it's provided by the cable operator, and it's well known that the cable operator doesn't have the best service reputation.

“It's more of a struggle for cable operators who had, historically, really poor customer service ratings,” said Dominic Ainscough, an analyst with The Yankee Group. “Certainly they face the challenge that their customer service ratings — and the perception of them and their quality of service — aren't high.”

The thin-skinned cable industry typically bristles at that criticism. Customer service has always been a priority — at least in public relations — and is no longer an issue, industry execs retort.

“Don't make a mountain out of a molehill,” said an AT&T Broadband spokeswoman, conceding that some consumers are concerned about giving cable operators access to confidential data via their computers. “If they're reading through the fine print, they would probably feel a lot better. They're safer surfing on our network than they are just going on the Internet at large.”

Still, cable's overall service perception doesn't inspire consumer confidence when it comes time for a cable operator to deliver yet another in-home product.

“People have started to trust the cable guy, at least because of the success of cable modems,” said Steve Craddock, senior vice president of New Media Development for Comcast. “We're going to spend a lot of money on customer service and a lot of time.”

It will be money well spent if cable is to succeed in networking the entire household. High-speed data's popularity, despite its bugaboos and the painful migration much of the industry made this year from Excite@Home, may help the industry overcome its image problems and ease the move into home networking.

Many tech-savvy consumers, understanding the value of linking multiple computers to their cable service, have already built their own home networks. However, as high-speed Internet service increases among the less-motivated consumer strata, operators must assist in putting together manageable home networks, said Mark Bell, Cox Communications' product development manager.

“We know there is a part of the customer base out there that requires systems to set up and install the home network,” Bell said.

There also are users who want no part of a cable system setup. Michael Harris, president of Kinetic Strategies and a Cox high-speed data subscriber, said he “would not be happy” to learn that Cox was attaching a price tag to his personally constructed home network. The majority of the technophiles who've done the same also won't be lining up to pay the cable operator.

For now, at least, the target audience goes deeper than those technophiles. In some instances, that audience may not be skilled enough to perform self-installation. For example, AT&T Broadband has partnered with consumer electronics vendor Linksys Systems on a Web-based offer. Those who subscribe purchase the gear online then do their own installation. Linksys provides ongoing support.

However, because AT&T Broadband has no desire to set things up in the consumer home, the self-installation requirement leads to “self-selection” where only the more daring subscribers sign up. “If they don't feel comfortable doing it themselves, they won't purchase the solution today,” said Carl Leuschner, AT&T's director of Internet services product management.

That leaves subscribers stuck with multiple computers, an entry point and no way to hook them together “unless you're going to be hiring somebody to come in and do it,” Leuschner said.

“You won't see any of the Bells offering to do this,” added Craddock.

The complexity for service providers, most agreed, is not in the home network itself — it's in making the components talk. CableHome makes sure all the pieces speak the same language as the home gateway, but it doesn't necessarily make sure that the dialects within that language are understandable.

“You also have to do the setup of the actual systems or PCs that are going to be on that network,” said Boyd Peterson, product marketing director for BroadJump, a vendor that develops the cable modem provisioning software. “There is a good deal of the setup that has to do with setting up ISP services.”

The plethora of deployment scenarios, including what kind of wireline or wireless networks will be used, complicates the situation, Peterson said. On top of that, an increasing number of consumer electronics vendors are starting to move into the home networking space with gear that, while potentially CableHome-compatible, will offer different inflections and nuances that might affect how the final network is set up.

Remarkably, data home networking may actually be the molehill of the CableHome mountain.

“It's not really a line of business for us,” said Comcast's Craddock. “CableHome was born to try to figure out what happens in the house that we can see and provide value and develop as a business and revenue stream.”

That includes working with other outside service providers such as utilities or retailers. Some utilities now remotely track energy usage, and an advanced home network would let subscribers control usage based on consumer or utility-set parameters. Retailers could monitor the condition of warranted products and be alerted to needed repairs.

Craddock breaks a home into four parts — communications, information, automation and entertainment — each of which Comcast is avidly exploring in search of consumer value and, more importantly, outside sources that might be willing to carry the cost burden.

“There's money to be made from third parties that can help support the cost of CableHome,” said Craddock, bucking the consumer perception that cable leverages all its services on consumer dollars. “It doesn't all have to come off the back of the homeowner.”

While Comcast, like other multiple system operators (MSOs), offers rudimentary data home networking, the future is built on DOCSIS devices that are yet to be designed.

The next logical home networking step is linking home entertainment devices such as TVs, recording units and audio components so that consumers in one room can take advantage of equipment in another. That's 15 months out at the earliest. Before then, the industry and the public will learn whether the cable guy can actually perform the high-tech job without trampling the pansies, short circuiting the TV or spying on the kids' Internet chat.

“There are many issues for consumers and a mindset for privacy,” said The Yankee Group's Ainscough.

But as Craddock points out, the telcos aren't offering home networking, and retail is chancy, expensive and lacking in support. If you want home networking now, cable has it and will continue to have it in the future. “Their [MSO] model is to manage every IP device beyond the cable modem or behind the gateway. They're talking about getting all the way down to the end device,” said Harris. “Do you want the cable company to have that visibility into your house?”

Only time — and CableHome — will tell.