Networking on the home front

After a few years of relative quiet, the home networking sector is sounding off about broadband access, home entertainment systems and affordable prices.

Jeff Thermond wants to keep the lunatic fringe out of home networking. He wants the networked coffee pots, the voice automated lighting systems and browser-based alarm clocks to stay a safe distance from his home.

“For home networking to be successful, we have to concentrate on getting useful applications to the consumer,” says Thermond, vice president and general manager of Broadcom's home networking business unit. “We can't concentrate on gee-whiz technology that holds no interest for the majority of customers.”

Following that theory of practicality, Broadcom and a host of other manufacturers announced a rash of home networking initiatives at the end of 2000. New equipment, working group projects, and partnership announcements testified that the industry was throwing its support behind the sector.

A common thread among the announcements is that the growing number of home PCs and the increase in residential broadband will drive the demand for home networks. Once rudimentarily networked, consumers will load fresh, new applications and connect additional peripherals — ultimately interconnecting appliances and devices throughout the house.

Table 1 Home networking technology comparison

	Phoneline	Powerline	Ethernet	Wireless
Speed	100 kb/s to 10 Mb/s	50 kb/s to 350 kb/s	10 Mb/s to 100 Mb/s	700 kb/s to 11 Mb/s
Relative cost	$50 to $130	$70 to $150	$75 to $200	$150 to $300
Advantages	Convenient, simple (no new wires), secure	Convenient, simple (no new wires)	Fastest, most secure and reliable	Convenient, mobile, simple (no wires), secure
Requirements	Need computers and peripherals near phone jack on the same phoneline	Need computers and peripherals near power outlets on the same power circuit	Requires Ethernet (Category 3 or 5) cabling: best in new home installations or remodels	Network components must be within a 250-foot range
Best use	Ideal for shared Internet access, file sharing and peripheral sharing; good for home gaming	Good for low bandwidth applications, such as home security and control	Ideal for home gaming, home offices and shared Internet access	Ideal for laptops, desktops and hand-held connected organizers inside and outside home or small office where mobility is required; great for shared Internet access; good for home gaming
Source: 3Com

Broadband access, network supporters claim, will open the door to the home and propel the market's growth. The desire to share the DSL or cable line will force consumers to connect their PCs and laptops, but soon thereafter the network will take on new responsibilities.

“Connecting multiple PCs for broadband access will expand to other devices quickly,” says Vince Izzo, director of home networking for Motorola's broadband communication sector. “Next, we'll see the family sharing music files and playing MP3 files over the home stereo.”

Streaming audio is getting votes as the early leader for home networking applications, but gaming, VOIP and video-on-demand could find a place on the network, once broadband offers better support for these applications. Audio's lower bandwidth requirements and public interest in Napster and other music portals may spur demand.

Broadcom's Thermond predicts that consumers will purchase monthly music services similar to their monthly cable packages. “Twenty years ago no one would have believed people would pay $20 a month for cable TV, but the signal quality and the packages appealed to consumers. Soon, we'll see people paying for 36 channels of premium audio that is playable throughout the home.”

Before networks move into the home, manufacturers and broadband providers must work out some kinks. The industry needs to decide who is installing and supporting these networks. It must offer airtight security. And, it has to standardize equipment.

CableLabs, a research and development consortium for the cable industry, is attempting to address some of these issues with its CableHome project. More than a dozen companies, including 3Com, Broadcom, Cisco Systems and Intel, have joined the initiative to hammer out the requirements that will extend cable services into the home networking environment. The group is concentrating on three critical areas — quality of service, network management and support and provisioning. Less than six months old, the project is focused on exploring concerns and building support within the industry.

As CableHome plods through requests for proposals, home networking products are hitting retailers' shelves. With products infiltrating the market, manufacturers have begun partnership discussions with broadband providers.

“We want the service providers to recognize this market for its incremental revenue opportunities,” says Broadcom's Thermond. “A home network offering is a great way for operators to move beyond a single service into bundled services of cable TV, voice and broadband access.”

Offering these services, though, must be weighed against the costs of maintaining them. Installation, especially if it involves a truck roll, and technical support resources could eat into the incremental revenue. Although gateway makers say installation and maintenance doesn't require technical skills, many consumers won't want to be bothered.

“Consumers will need to have options,” says Motorola's Izzo. “We will need a model where the provider installs the network or outsources it to an integrator. We'll also see off-the-shelf products for consumers who want to do it themselves.”

Support and maintenance issues are also unresolved. No one has a clear answer for who will respond to technical support calls. The manufacturer will support products bought through retail channels, but multiple systems operators (MSOs) would get the call for gateways they provided.

“Consumers will expect service providers to be responsible for end-to-end delivery,” says David Reed, chief technology officer for CableLabs. “We are adding new devices into the supply chain, but users don't want to talk to all the players. Service providers will have to make home networking convenient and invisible.”

Hardware providers say their products will have limited installation and maintenance requirements. “We are building devices that can be taken off the shelf and set up by customers who have limited to no technical expertise. The products are easy to install and intuitive,” says TJ Shiah, manager for home networking product marketing at 3Com.

No matter how “fool-proof” the products are designed, consumers will still want reliable support when they have network problems. Karuna Uppal, senior analyst at The Yankee Group, expects service providers to play the installation and support role initially but to offload it to integrators eventually. “Operators will deploy the infrastructure in the home and benefit from the service sales, but they won't want to maintain the networks or devices. Retailers and local integrators will have to take on those responsibilities.”

Gateway makers clearly want MSOs to support the home networking market. Broadband providers offer a much-needed distribution channel for these new products. But the costs of entering the sector too early could be high.

Service responsibilities could have a hefty price tag if installation, maintenance and support fall into the provider's domain. Carriers may want to opt out of some of these duties because they are beyond the broadband providers' core competency and they take a toll on resources and capital.

Selecting one of the first home networking products could also be costly, depending on what happens with the new technologies. Most protocols are still in development stages, and none are clear winners. Depending on which protocols lead the market, some early products may become stranded because they supported the least successful protocol.

Whether home networking meets analysts' expectations depends on the consumer. Technology advances could curb or incite consumers' desire for home networks. Streaming audio may end up on the home stereo — or it may not. Some yet unknown application may light the home networking flame — or not. Until an application captures consumers' interest, standards are more defined and supply-chain responsibilities are clear, providers may want to watch the market's progress from the sidelines.

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Hanna Hurley is a freelance writer based in Alameda, Calif. Her e-mail address is hrhurley@hotmail.com.

Doing the math

Applications + devices+ wiring = home network

Manufacturers have done the math, and by their calculations home networking is a simple solution to a complex equation. Their logic goes like this.

Theory A: Increasing residential broadband Internet access + additional home PCs = home network

Theory B: Decreasing PC sales + increasing network appliance sales = home network

Theory C: Increase in applications + increase in devices = home network

Theory D: Increases in new “wired” homes + increase in retroffited wired homes = home network

The problem with this logic is that the factors the companies are adding together are not facts, they are predictions. These trends may — or may not — occur.

Projections from industry pundits

In 2000, 18% of US households had multiple PCs. By 2010 this number should rise to 50%. (Parks Associates)

Nearly one in five homes, or 19%, have more than one computer, and 10% of those households have an interest in a home network. (RKS Research & Consulting)

The number of home offices has increased from 34 million in 1999 to 39 million in 2001. (IDC)

By 2004, 28 million households will derive primary income from a home business and 54 million households will be used to telecommute. (Yankee Group)

By 2003, 10 million U.S. homes will be networked. (Yankee Group)

At the end of 2000, 2.3 million homes, about 4%, had home networks. By 2004, 15.6 million homes, or 16.5% will be networked. (Cahners In-Stat Group)