Keeping up with the Jetsons: Verizon, Cisco, Sun, Sears aim to connect families, homes

Service providers always talk about the necessity and profitability of value-added services as if those services are the Holy Grail of telecommunications. But who would have thought that value-added services could one day include a home network that connects via DSL to the refrigerator, dishwasher, home security system, front door and more? Home gateways, which would act as the intermediary between home appliances and network equipment and would make all the services available, already are in the works at Cisco Systems, Lu-cent Technologies and Nortel Networks. Appliance makers are working with software vendors to build interactive dishwashers, TVs, screen phones and more. And retailer Sears Roebuck already has set its sights on the endless possibilities available to consumers.

While today consumers network their home PCs together, during the next few years they'll be networking more than just PCs. Appliances, security systems, TVs, PCs and more will be interconnected via a residential gateway, which will, in turn, connect the home to a service provider's network via DSL.

Residential gateways will be the next step in providing network access, said Kristine Stewart, director of market development for Cisco. "Instead of going to one PC, the residential gateway can tie together the entire home with LAN technology." In addition, the gateway will maintain user-specific services such as calendars and address books. Cisco expects the residential gateways to be available next year.

Rather than market the equipment to the homeowner, however, equipment providers have turned to builders and service providers to absorb the cost of the residential gateway and related equipment. Cisco partnered with Southern California developer Playa Vista to network 13,000 homes in a new community. For existing homes, Cisco plans to offer its residential gateways to service providers that will bundle services for consumers, similar to how cable TV companies market set-top boxes to their customers.

"Consumers aren't going to pay money for a device. They want content and services, they don't care about a box," said Karuna Uppal, senior analyst of consumer market convergence for The Yankee Group.

GTE, now Verizon, already has made significant advances in the home networking space. It developed a Connected Family environment with partners Cisco and Sun Microsystems. Capabilities of the Connected Family system include calendar and list management; home system alerting; remote home system management; and remote video surveillance.

"We are a service provider. It's our job to bring value-adds to the house to make life simple," said Russ Sivey, director of service planning and development for Verizon.

Because home internetworking is made possible using DSL, all the usual provisioning issues apply, including distance and line quality limitations. Verizon plans to address distance issues with remote DSL access multiplexers. As for line quality, the service provider will offer different levels of service packages, depending on the amount of bandwidth available to each customer. "The user doesn't care how big the pipe is as long as he gets his service," Sivey said. Most of the basic services such as monitoring appliances or home security require fairly low bandwidth. Music or movies-on-demand would require much higher bandwidth.

Service packages also will determine what types of coverage the customer wants in case of a network outage. While the residential gateway will store a user's calendar, address book, lists and other personalized services, Verizon will offer data storage services to customers who want additional backup.

The catch for service providers will be getting themselves back into the home. "Fundamentally, we believe this will be a huge revenue stream, but we have to transition and rethink to get back into the home," Sivey said. "Traditional telephony meant pipes and services like Caller ID. The concept of bringing these new services to the home is hard to swallow. We have to rethink how to do our business. It's not a simple thing to try to incorporate."

Another hard-to-swallow concept for service providers, equipment providers, software developers and retailers that enter the space will be the elaborate partnerships required to pull off a project similar to Connected Family."Partnerships will go from one to two partners to 20," Uppal said. "[Service providers] will have to balance the needs of all the partners in the value chain. Partners might have conflicts with each other, and everyone will have their own vision of how things will work. There will be a lot of compromising and a lot of deal-making, and that's time-consuming."

Other tricky situations will include figuring out how to make money and share revenue among partners. "Most services like calendaring are going to be given to customers. They aren't going to want to pay for them," Sivey said. Instead, service providers will rely on profiting from companies that want access to consumers, he added.

Sears sees itself as the outlet from which to educate consumers on home internetworking; it already is working with Cisco on the Cisco-powered Home project. "At the end of the day, it's all about helping to raise the standard of living for ordinary families," said William Kenney, vice president of strategy for Sears. "This whole space is driven by a lot of exciting developments that are going to confuse your neighbors. We'll collaborate with partners so we can present it in an easy-to-understand way."

In addition to finding partners, service providers and retailers must undergo massive transitions in customer support, maintenance and infrastructure. "Today it's active on the consumer side, but that will have to change to be more focused on the back end, putting the systems in place to make [home internetworking] happen," Uppal said.

Home internetworking for the masses is still between five and 10 years out for the average consumer. And while Verizon and Sears predict interactive gaming and entertainment will be the first products to hit the market, in reality the services available likely will be communications-centric. "Today we have the bandwidth to handle the services, and they are easier to deploy," Uppal said. "On-demand gaming requires partnerships. People want those services, but they are harder to deliver."

Verizon's Connected Family home offers a view into the future of home internetworking. Even though the model home looks like an average home, in addition to networking kitchen appliances, home office PCs and TVs, the home system also provides calendar and list management; home security and alerting; remote home management and surveillance. Information retrieval for recipes, weather, news and entertainment; telephony services; video confer-encing; entertainment; messaging; and e-commerce also are part of the connected home of the future. All that's missing is Rosie the Robot maid to do the dishes.