Home networking: Cable TV's next payoff?

Thu, 09/30/1999 - 8:00pm
James Careless, Contributing Editor

Home networking-connecting multiple devices to a common cable TV connection-used to be a buzzword. Now, it's becoming a reality. The proof: in Canada, Rogers Cablesystems has been quietly rolling out home data networks for its @Home subscribers.

The service is known as MIPs. Short for "Multiple IPs," MIPs "gives the customer up to three IP addresses for connecting PCs in the home," says Wayne Hatton, vice president of marketing for Rogers@Home. Each additional IP address costs C$9.95 a month (U.S. $6.33) on top of Rogers' regular @Home charges.

Technically speaking, MIPs is a wired home network. That is, each PC is connected by Category 5 cable to a central hub unit. This, in turn, is connected to Rogers' two-way HFC network via the home's single coaxial line.

"We haven't gotten into our own in-home networking physical products and wiring," Hatton adds. Instead, when it made MIPs available a few months ago, Rogers first left it to subscribers to install their own in-house routers.

More recently, Canada's largest MSO has given MIPs subscribers the option of using a third-party vendor to do the wiring. In this scenario, "they basically take care of all the physical wiring and networking components associated with it, and the customer can just plug in the PCs and away you go," says Hatton.

That said, MIPs is already being well-received by customers. In fact, two to four percent of all Rogers@Home customers are interested in setting up home data networks, says Hatton. That's not bad, considering that Rogers isn't actively promoting MIPs, and "we don't have a total turnkey solution" available, he notes.

Rogers isn't the only MSO whose customers are lobbying for home networking solutions, however. Cox Communications is also feeling the heat, says Chris Bowick, the company's vice president of technology development. "I have people coming to me and saying, 'I've got multiple PC users in my home, all wanting Internet access and the ability to share files'," he says. The next question is always the same: "'Can you install a home network for me?'"

Both Cox and Time Warner, however, have decided not to follow Rogers' lead on home networking. Instead of venturing forth, they're holding back. Why? Because, so far, there's no accepted standard for this technology. Hence, any company that follows Rogers' lead also assumes the same risk-if they roll out now, they could end up with non-standard equipment.

To reduce that risk, CableLabs and its member companies are currently developing home networking standards. In doing so, they have some clear goals in mind, says Dan Rice, a senior member of CableLabs' technical staff.

"One of the big issues is reducing the time and cost of provisioning new services," says Rice. "For instance, we'd like to come up with an architecture that will reduce the number of truck rolls whenever something new is launched. We also want to make it possible for customers to self-provision new services: to go out and buy what they want at retail, then just plug it into the network. However, in doing so, we don't want to compromise the high standards on which cable high-speed data is based."

However, "plug-and-play" isn't CableLabs' only goal for home networking. Noting that most consumers demand NNW ("No New Wires"), Rice says that utilizing wireless technology within the home is also a top priority. Ideally, it should be possible to walk outside with a laptop and still be connected, he observes. Provisioning this isn't actually that hard, but there's a catch: wireless can't deliver the same speed as wireline because of limited bandwidth. Therefore, the question remains as to whether home networking consumers will be willing to eat speed in exchange for NNW.

For the cable TV industry, the answer to this question is critical, because it could decide whether consumers choose to subscribe to them for multi-user Internet access or not.

As if this weren't enough, there's the very basic question of what networking actually is, says Jim Chiddix, Time Warner Cable's chief technical officer.

"'Home networking' is this big amorphous phrase that means different things to different people," he says. For instance, it can just mean plugging multiple telephones into a single connection, be it coaxial cable or telephone twisted pair. Or, home networking can also be used to describe multiple PCs hooked to a single Internet connection-the kind of connectivity currently being sold by Rogers.

Home networking could also mean connecting subscribers' PCs and printers to each other directly through a cable TV network. For customers, this would give them the ability to share devices throughout the house. The problem is that this would really eat up a lot of bandwidth, says Chiddix. "We've got the potential capacity to do that, but that doesn't sound very efficient or cost-effective."

Yet another version of home networking is where subscribers build their own true network within their homes-a Tiny Area Network (TAN), to coin a phrase-with the cable TV connection tying it all together. Better yet, this network could also hook up to the subscriber's TVs, radios, VCRs, DVDs, and other addressable devices, Chiddix says. "That's a much more difficult issue technically, because of the amount of bandwidth required to go through this home network," he says.

Finally, there's the external gateway model, where everything offered by cable-voice, data, TV and anything else-is delivered by wire to the side of the consumer's house. From there, it's fed to all of the subscriber's devices either by wire or wireless. To say that this approach is complicated understates the problem, Chiddix notes. "I've never seen a block diagram of that, that made any sense."

Beyond what home networking actually means, there's the major question of profit: where's the money to be made?

The obvious source, of course, is installation and access. By installing high-speed pipelines to customers' homes, cable TV companies will naturally make money on their home networks, be it through multiple IP addresses, equipment rentals, service support, or all of the above.

But is there more money to be made through value-added services? Road Runner thinks so.

For example, at Road Runner, the company hopes to target small office/home office customers (SOHO) with a "network address translator," says Larry Levine, senior vice president of corporate development. It's designed to connect up to five PCs to a single coaxial connection, which, in turn, connects to Road Runner's high-speed Internet service. "We think that there's a pretty big market for that," says Levine, "given the fact that there are a lot of small offices right now that are getting their Internet access from AOL or local ISPs" at speeds way below those offered by Road Runner. He hopes to see these translators hit the mass market by the first quarter of 2000. When they do, they'll be a unique boon for Road Runner subscribers.


Cisco Systems is also exploring a cable TV home networking solution that could combine Internet, voice and TV services over a single wire. The reason is simple. "We think consumers will not have the rich, multiservice Internet experience that they can have without a high-speed, always-on connection to their home," says Bob Michelet, Cisco's director of marketing for consumer products, "and then a way to spread that connectivity within the home."

Recently, Cisco adopted ShareWave digital wireless technology to help develop its own wireless home networking solution. Under the scheme, a wireless Ethernet bridge will be developed to connect cable or DSL modems via over-the-air transmissions. In this way, home users will be able to locate their PCs and other Ethernet-connectible devices wherever they want, without having to run wires between them to create a network.

In addition, other manufacturers are jumping feet-first into the home networking market. For instance, Panja-formerly AMX Controls-is hoping to get an edge by letting consumers connect to the Web without computers.

The key to this is the company's "entertainment gateway" that interfaces between the Internet and the user's TVs, VCRs, stereo receivers, and any other entertainment devices. Using small, wireless "TouchPanels," Panja users can access all kinds of broadband applications directly from the Web, including MP3, MPEG, Real Audio/Video, and other streaming services. It can also be used to connect home security systems to the Web, so that the user can monitor and control their home's lighting and heating from any remote location.

The moneymaker here is that Panja intends to sell these services through subscriptions. In this way, customers can specify what they want from the Web and get it, without purchasing a PC.

3Com Corporation and Microsoft are also jointly developing co-branded home networking products. Using aspects of Windows 98 such as Internet Connection Sharing, the two companies are hoping to "lead in the home networking arena by offering a simple, out-of-the-box experience," says Brent Lang, 3Com's director of marketing for home networking. In this venture, Microsoft and 3Com intend to develop both wired and wireless home networking solutions.

NDC Communications is also hoping to cash in on home networking. That's why the company is working closely with Cablevision, Cox, Comcast, Rogers and MediaOne to create an integrated wireless home networking product line. According to Andy Chang, NDC's vice president of sales and marketing, the opportunities here go beyond equipment installation to embrace value-added services such as e-commerce. The idea is to give cable TV companies a share of ongoing e-commerce revenues generated by NDC's own Web sites, which are built around the company's "SOHOware" line of SOHO networking solutions. Chang says Media-One, Comcast and Cox will begin trialing NDC's home networking solutions this fall.

Although market forces are causing data network hardware and software companies to rush to develop products, none of this can mask the current lack of standards for home networking technology. Until these arrive, MSOs will be faced with the same conundrum that confronted them before DOCSIS modems hit the market. They can emulate companies like Rogers and jump in now- tempting the curse of future incompatibility-or they can hang back and risk that other carriers will be first-to-market.

It's not an easy choice. What makes it worse is that consumers are already grasping the potential of home networking. As Cox's Bowick says, "It's going to happen, with or without us joining in as an industry. Just the proliferation of PCs alone-with people wanting Internet access and the ability to share files-is creating a very strong drive toward home networking." Moreover, the novel products being developed by manufacturers are only going to increase market demand for home networking, now.

Given this, only time will tell which approach proves to be the wisest. Until then, all cable operators can do is hope that CableLabs and its member companies work around the clock to solve the standards question. Bowick is right: the home networking concept is gaining momentum. The only question is how cable TV will capitalize on it.



Share This Story

You may login with either your assigned username or your e-mail address.
The password field is case sensitive.