First, the bad news: the network builds aren’t over. The good news is that we’re talking home networks. That means off-the-shelf consumer electronics and distances measured in feet rather than fiber kilometers and field-grade opto-electronics.
Less capital intensive than outside plant rebuilds or upgrades, home networking nonetheless faces its own obstacles. But the technology is advancing. The cost structure is shifting favorably, and the list of countervailing benefits is growing.
In any case, the home networking train already has left the station. Time Warner is offering the service to customers in about 75 percent of its divisions. Cox has deployed in all but two (out of 27) systems. Comcast has an ongoing market trial in its Maryland/Delaware test bed—home networking gear had been part of AT&T Broadband’s offering. While not without risk, this initiative has an almost land-grab feeling about it. Many cable operators—as well as DSL providers and independent contractors—see an immediate opportunity. But it’s also a strategic play, based upon a home network’s capacity to extend the HFC platform and enable more services. “Don’t go there”
Not everyone is on board, however. In a Maher & Maher Webinar on home networking, leader Doug Marlowe says home networking still elicits the “don’t-go-there” response from some operators. Why is that?
While home networking has been on the roadmaps of many MSOs for several years, cable modems themselves have a longer history, and some cable technicians have mixed feelings about getting too close to their high-speed data subscribers. A heated thread on the SCTE-List this summer, for example, counseled against trying to fix a subscriber’s computer, lest a tech-ops unit transform itself into a help desk.
The risk of “owning” someone else’s IT problem is no secret. For its part, Cox executives who vetted and helped launch home networking services in November 2002 think that they’ve drawn a “pretty clear line” between what Cox does and does not support. “Essentially, what we support is basic connectivity, whether wired or wireless, and file and print sharing,” Mark Bell, Cox product development manager says. “If it’s something more elegant or advanced than those basic features, we either escalate it up to the vendor, or refer the customer back to their OS provider.” At the same time, Bell sees a certain tension in the field. Cox’s culture might encourage a tech to “give it a shot and try to help the customer,” but there is a point at which a technical issue falls “outside the realm.” Apart from the cost of tech support, another unclear liability is the impact that home networking will have upon overall Internet protocol (IP) traffic. Greg Zancewicz, product marketing manager for Microtune, raised this concern at the SCTE’s Cable-Tec Expo earlier this year. How to add video to the networking mix is an additional uncertainty that cable’s brain trust is working on. Technical enablers
Risks notwithstanding, Cox and other MSOs have embraced home networking. Driving that decision has been an overall ripening of IT talent and tools, of home networking gear and of the market opportunity and competitive threat.
Talent in the data arena is on the rise, as is sound training. At the same time, cable’s front line personnel also have impressive software working on their behalf.
SupportSoft, for example, has racked up a series of deals with MSOs—and at least one telco, BellSouth—for software that can do such things as automatically isolate, if possible resolve, and then notify subscribers of connectivity problems. The upshot is preventing a flood of calls into the help desk, explains Marc Itzkowitz, SupportSoft director of broadband product marketing. Engineers at several MSOs have the firm’s HomeNet module in their hands, Itzkowitz says. “It will configure the modem, router, all the PCs, help you distribute all your WEP (wired equivalent privacy) keys, or security keys, to various devices.” The router vendors themselves are supplying similar kinds of tools. Comcast Regional Director for Engineering and Technology Tom Williams says Linksys custom designed a graphical user interface (GUI) for its integrated modemrouter to help Comcast technicians configure the modem and Ethernet ports, enable options and, in turn, impart that knowledge to subscribers. Efficient pricing
While Comcast and Cox are opting for technician-assisted installation, the idea of that being a choice is evidence of maturing technology. “In the earlier days, it took a truck roll, absolutely,” Bradley Morse, vice president of marketing for D-Link, says. “It’s become much easier.”
Morse cites the evolution beyond Windows 95 and 98 and the arrival of Universal Plug and Play (UPnP) and advanced USB as some technical enablers of today’s home networking boom. D-Link’s own aggressive approach with suppliers has further widened the market.
“When (802.11) g came out, we demanded that we get the chips at (802.11) b prices,” Morse says. At the same time, D-Link continued driving down prices of the slower b chip to accelerate mass-market adoption. (G has five times the raw data rate of b—54 vs. 11 Mbps.) D-Link, which shares retail shelf space with Linksys and others, is not yet offering an integrated gateway, again for reasons of pricing efficiency, Morse says. The opportunity
It clearly has been in the interests of router vendors to simplify installation. Initial customer confusion helped lead cable to this market in the first place.
“We found that somewhere around 45 percent of customers who did their own home network had problems with the installation and configuration of the DHCP (dynamic host configuration protocol) settings and…security settings,” John Webster, Cox product manager for high-speed data, says.
Is the market opportunity still as clear today as it was over a year ago, when Cox launched its service? Better software notwithstanding, the overall case for operators remains strong. SupportSoft’s Itzkowitz points to three benefits. First, direct revenue. It is one way, amidst downward price pressure, for an operator to “break the $49.95 barrier.” Second, loyalty. “Even if there is this revenue opportunity, there is this ongoing prevent-churn opportunity.” Finally, “there is the indirect revenue you can get later.” Once a network is established, “you can do gaming, home security, home monitoring, things that have much higher marginal price points,” Itzkowitz says. Some of this indirect revenue is speculative, but some looks very real, indeed. Matt McRae, Linksys director of broadband services, mentions a gaming package that one MSO is preparing to unveil that includes a faster speed connection, gaming software and a Linksys gaming adapter, or wireless hook, to a Sony PlayStation or Microsoft Xbox. Value proposition
Home networking has moved into the mass market, to mom and dad. And to reach them, operators are talking value.
“We enable WEP. We take advantage of the enhanced security features within the router, and I think we probably do as good a job, if not better, than some corporations in securing a person’s PC,” Cox’s Bell says.
The evolution of the home network into a service platform is no accident. It was central to the vision of the vendors and operators who launched the CableHome initiative. CableHome’s key features, according to a paper that YAS Broadband Ventures Chief Architect Doug Jones presented at this summer’s NCTA Show, include the mitigation of unauthorized snooping and the enabling of additional functionality, such as remote diagnostics, only when consumers voluntarily subscribe to an operator’s home networking service. (For more on CableHome 1.0 and 1.1, see Sidebar “CableHome Summary.”) The cost of deploying home networking service is not trivial. It’s also a number that varies according to approach. Do you lease or sell the networking gear? Which gear? What about ancillary software? How efficiently can CSRs, installers and tech support handle the initial and ongoing demand? What impact will the additional, networked devices have upon overall IP traffic? But there’s an upside. “It’s obviously a profitable product, and something that we want to continue to build on,” Cox’s Webster says. The home network as a platform from which to launch services is an especially compelling idea, one whose upside limits are not entirely clear. Jonathan Tombes is the executive editor of Communications Technology. Email him at [email protected]. Home Networking Reading List From the session on “Wiring the Home with Wireless Technology” at the SCTE’s Cable-Tec Expo in May: From the session on “Whole Home Networking” at the NCTA’s National Show in June: For copies of the NCTA’s Technical Papers or the SCTE’s Proceedings Manual, contact the NCTA at 202-775-3550 or the SCTE at 800-542-5040. Home Networking: Deployment Mode Operators deploying home networking services are cherry-picking their personnel and giving them a full dose of training.
“Only the top-performing high-speed Internet technicians were selected (for home networking),” says Alex Horwitz, director of public affairs for Cox Communications in Northern Virginia, one of the MSO’s last regions to deploy this service. John McRae, a technical trainer with Comcast in Montgomery County, Maryland, has been tasked with writing a lesson plan for his company’s upcoming deployment. “I’m going to be gearing it toward technicians that are already very proficient in the regular high-speed Internet installation,” he says. “That way, I know that they’re already proficient in installing the NICs (network interface cards), and working in different operating systems, and troubleshooting the RF side,” McRae says. That leaves wireless as the focus of his training, he adds. Cox technicians undergo 16 hours of classroom training, developed by the MSO’s National Training and Development Organization (NTDO). Most is hands-on, involving the PC operating systems that Cox supports. “In order to pass the training portion, the technicians had to take apart and build four separate networks using
both wireless and wired technology,” Horwitz says. Cox technicians then get to “field test” their abilities with alpha and beta customers and can return for training in advanced troubleshooting. Linksys and D-Link, the two router vendors whose products Cox subs purchase with their installation, additionally certify the MSO’s trainers, Hortwitz says. Comcast’s McRae has been through Linksys training on the integrated router/modem gateway that Comcast plans to lease to subs. A Linksys spokesman says the company will train three different groups at an MSO: the CSRs, tier-1 tech support and the installers. Additionally, installers get a PIN number to put them in direct touch with the company’s own tech support, if necessary. The set-up itself is “real easy,” McRae says. It involves a CD that carries the drivers for the wireless network cards and a set-up procedure for the router. “The software does most of the work.” In the home, McRae anticipates problems with structural issues, such as firebreaks that impede wireless transmission. Cox’s Horwitz notes that steel beams used in the construction of additions to older homes also deflect signals. Horwitz confirms that the computer itself remains a sticking point. “Most tech challenges were related to customers’ PCs that were not in good enough condition or antiquated.” More specifically, he says problems include viruses, missing OS disks (required for some installations) and a failure to meet minimum computer qualifications. CableHome Summary CableLabs released its specs for CableHome 1.0 in April 2002 and certified its first residential gateways in December 2002. So far, products from Ambit, Linksys, Netgear, Scientific-Atlanta and Thomson have been certified as CableHome 1.0-compliant. CableHome 1.1 specs were released in April 2003.
Key residential gateway features provided by CableHome 1.0: