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The May 14, 2003 Issue Provided by System Dynamics Inc.
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In This Issue

Heard on the Net

Energy Management - "Broadband Without Internet"
A Guest Article by Mark Francisco

Broadband Wireless World
The "Big Boys" Have Arrived

Broadcom
Today the Laptop, Tomorrow the TV?

Wi-Fi Press
Sense or Nonsense?

Broadband Home Labs
Our First "Smart Display"

Lifestyle Notes from the "Always-On" World

Disruptive Technology in Action

Your Voice -
Readers' Comments


Heard on the Net

News about People and Companies Influencing The Broadband Home


People News

Ian Aaron has been named President of Gemstar-TV Guide International's TV Guide Television Group, a new division which handles the company's TV Guide-branded business in the cable and satellite sectors. He was previously President and CEO at TVN Entertainment. ( www.gemstartvguide.com )

Gennadiy Borisov has been appointed Senior Director of Advanced Products at MTV Networks. ( www.mtv.com )

Kevin Conroy was promoted to the new position of EVP and COO of AOL for Broadband; he was previously SVP and GM of AOL Entertainment. ( www.aoltimewarner.com )

Peter Kempf has been named president of the HomePlug Powerline Alliance, Inc. as part of the organization's new roster of officers. Kempf is VP of Marketing for wireless data and networking at Conexant. ( www.homeplug.org ) ( www.conexant.com )

George F. Palmer has joined Bermai as VP of operations and manufacturing for the wireless 802.11x chipset company. Palmer was previously at National Semiconductor. ( www.bermai.com )

Robert (Bob) Rickwood was named GM of RADVISION's Networking Business in EMEA. He was previously at Polycom. ( www.radvision.com )

Robert Selzler has joined two partners and launched 3P Marketing Group. Selzler was previously with InnoMedia. ( www.3PMarketing.com )

Thomas Short, previously with Mitsubishi Electric Corporation, was appointed VP of Operations at WiFiLand. Timothy Ural, previously with salesforce.com, was appointed VP of Technology. ( www.WiFiLand.net )

Walt Thirion was named interim CEO of Bandspeed. ( www.bandspeed.com )

Martin Yudkovitz has been named president of TiVo Inc. Yudkovitz had been Executive Vice President at NBC. ( www.tivo.com )


Company News

--Acquisitions

GoldPocket Interactive, a provider of two-way interactive television (iTV) technologies has acquired WatchPoint Media, marking GoldPocket's entry into the European iTV market. Financial terms were not disclosed. ( www.goldpocket.com ) ( www.watchpointmedia.com )

RealNetworks is acquiring Listen.com, in a transaction valued at approximately $36 million. RealNetworks already owns RealOne™ SuperPass and also holds a 40 percent share in MusicNet, a wholesale supplier of licensed music to online services. ( www.realnetworks.com ) ( www.listen.com )

Tekelec and Santera Systems, Inc. agreed to combine their next-generation switching businesses. The business will be a majority-owned subsidiary of Tekelec. Tekelec will contribute $28 million in cash and its existing packet telephony business. Santera's current investors will contribute its assets and an additional $12 million in cash. ( www.tekelec.com ) ( www.santera.com )

--Funding

Airgo, developer of wireless LAN technology, announced closing its $20 million Series C financing round. ( www.airgonetworks.com )

Dilithium Networks, a provider of wireless multimedia solutions including voice and video transcoding gateways, has closed $10M in Series B funding. ( www.dilithiumnetworks.com )

Jedai Broadband Networks has raised $10 million in series B financing. ( www.jedai.com )

Redline Communications Inc., a provider of broadband fixed wireless equipment has completed a $10 million financing with some of its existing investors. ( www.redlinecommunications.com )

SkyStream Networks, a provider of advanced video networking solutions, has secured U.S. $25 million in private funding. ( www.skystream.com )

WildBlue Communications announced that Liberty Satellite & Technology, Inc. (LSAT), Intelsat, National Rural Telecommunications Cooperative (NRTC), Kleiner Perkins Caufield & Byers, and @Contact LLC have invested $156 million in the company. ( www.wildblue.com )

--Other News

Advent Networks announced the Ultraband™ UAR 220 Access Router, a customer premises device that supports both Advent's Ultraband dedicated bandwidth operations and DOCSIS shared bandwidth operations. Advent says this would permit cable operators to offer service packages combining shared bandwidth for applications like Web browsing and dedicated bandwidth for applications like videoconferencing. ( www.advent.net )

Apple introduced its iTunes Music Store online music service. Users can listen to a 30-second preview of songs in its catalog; they can purchase individual songs for 99 cents and full albums for $8 to $13. Music Store works only on Apple's computers, although a Windows-version is expected by year-end. Billboard Bulletin reports the service sold more than 1 million downloads in its first week. ( www.apple.com/itunes ) ( www.billboardbulletin.com )

Atheros Communications announced availability of “Super G” and “Super A/G” capabilities that deliver up to 90Mbps TCP/IP throughput for 802.11a/g and 802.11g Wireless LANs. These capabilities include a new 108Mbps data rate design for 11g and 11a, real-time hardware data compression, standards-compliant bursting support, and dynamic transmit and modulation optimizations. The capabilities are backward compatible with conventional 11b, 11g, and 11a products. The actual throughput rate depends upon the compressibility of the data. ( www.atheros.com )

Bulldog in Britain joined the trend toward tiered broadband services by launching two new residential high-speed services. AllTime 1000 provides ADSL broadband at 1Mbps downstream and 256kbps upstream for £35.24 per month and AllTime 2000 provides 2Mbps downstream and 256kbps upstream for £52.86 per month. They also offer AllTime 500 ADSL broadband service at £23.48 per month. DSL modems and one time connection fees are not included. ( www.bulldogdsl.com/residential/products/AllTime )

Cedar Point Communications, Inc., announced the new release of SAFARI C³, which integrates all of the functions for carrier class cable telephony, includes support of CALEA, E911 and Operator Interrupt, and delivers to service providers a full set of call features. Cedar Point has received a purchase order from Comcast for a unit to be used in trial deployments. ( www.cedarpointcom.com ) ( www.comcast.com )

Coaxsys, Inc. a new provider of home networking systems via cable TV-style coax wiring announced the company and development of Pure Speed - a coax-based solution for creating "a ‘connected home’ with 100 mb/sec Ethernet performance, without the need for complex wire installation." ( www.coaxsys.com )

The HomePlug Powerline Alliance announced an RFP for the HomePlug AV specification. When finalized, the specification will enable connection between various PC and home entertainment devices, including high-definition satellite and cable set top boxes, PVRs and flat panel monitors. It will be backward compatible with HomePlug 1.0. Technology selection is due in October. ( www.homeplug.org )

Jungo and Samsung introduced an integrated software and silicon reference design providing CPE manufacturers with a production-ready infrastructure to speed up development of broadband gateways, routers and DSL modems. The design is based on Samsung's ARM processor and Jungo's OpenRG software. ( www.jungo.com ) ( www.usa.samsungsemi.com )

Lemur Networks announced availability of its i-Fabric™ Firmware Manager (FM) for cable system operators. The FM allows MSOs to track installed cable modems and remotely effect real-time upgrades of their capabilities (e.g., from DOCSIS 1.0 to DOCSIS 1.1). ( www.lemurnetworks.com )

Mediabolic, a provider of networked entertainment middleware, has signed an agreement with Fujitsu Limited to incorporate Mediabolic's M1 Platform into entertainment-focused Fujitsu products. ( www.mediabolic.com ) ( www.fujitsu.com )

Microsoft announced Music Mixer at the Electronic Entertainment Expo (E3). It will let users send digital music and photos on their PCs to their Xboxes, which can then project a slide show on a TV and play music with Windows Media 9 digital music playback software. It also can strip vocals from any song so that people can sing along to a music track, making it a karaoke machine. Analysts have predicted Microsoft would expand Xbox from a game console into a media hub and this is a step in that direction. ( www.microsoft.com ) ( www.xbox.com/musicmixer )

Motorola Broadband Communications Sector introduced an enhancement to their DCT6000 digital set-top series which integrates both high-definition television and digital video recording capabilities. Comcast has made a multi-year digital cable agreement with Motorola including two set-tops from the DCT6000 family. ( www.motorola.com/broadband ) ( www.comcast.com )

Movielink, the IP-based service formed by five major Hollywood studios, signed a deal with Hollywood.com to offer a co-branded broadband film download service. New movie releases cost $4.99, and older releases cost $2.95 per download. To watch movie previews, trailers, and clips, you need a minimum connection speed of 300 kbps. Once downloaded, users have 30 days to play the movie, which they can watch as many times as they would like within 24 hours. ( www.movielink.com ) ( www.hollywood.com )

Phonex Broadband announced the TimeSlot Quality of Service (QoS) feature for the ReadyWire Powerline Home Communications Chip. It provides the ability to control up to 15 applications with independent prioritization and control. Intended uses include connecting various devices in the home with streaming audio, Internet video and home automation control. ( www.phonex.com )

SlipStream Data Inc. announced that its technology to compress and optimize web and email content will be deployed by Quicksilver Internet for its Internet services in New Zealand. SlipStream's accelerated dial-up access technology has been deployed by other ISPs, including United Online to support higher-speed versions of their NetZero and Juno services. ( www.slipstreamdata.com ) ( www.quicksilver.co.nz ) ( www.unitedonline.net )

T-Mobile announced a bundled service which lets their mobile phone customers add the T-Mobile HotSpot service for $19.99 with unlimited access. ( www.t-mobile.com )

Telia has joined the trend toward tiered broadband services by introducing two new services. The three ADSL services now in their portfolio are the Broadband 250 service (speed: 0.25 Mbit/s), Broadband 500 (0.5 Mbit/s, previously called Telia ADSL Broadband) and the new Broadband 2000 service (2 Mbit/s). ( www.telia.com )

TI announced the AR7, a fully integrated ADSL access router-on-a-chip. It combines a MIPS 32-bit RISC processor, a DSP-based digital transceiver, an ADSL analog front end (AFE) including line driver and receiver and power management onto a single piece of silicon. The AR7 addresses service providers´ needs to support applications such as multi-PC home networking and the ability to provide service to households that were previously too far to reach. ( www.ti.com )

TiVo announced TiVo Basic service. It will only be packaged with licensees' integrated consumer electronics products and will provide entry-level DVR functionality with integrated products such as combined DVD/DVRs. Customers will have the ability to upgrade to the full TiVo service. ( www.tivo.com )

Transmeta Corporation has been designated by Microsoft as a reference design partner for the next generation of Smart Displays. Transmeta provides energy efficient processor technology and the high performance needed for Smart Displays. ( www.transmeta.com ) ( www.microsoft.com )

Tylite, Inc. is offering technology and online financial modeling tools for estimating costs for broadband fiber networks. Their focus is enabling small cities to provide broadband fiber networks to residents, businesses, educational institutions, health care organizations, government and other local users. ( www.tylite.com )

The Wi-Fi Alliance announced the first group of wireless LAN products and reference designs to be certified as meeting the Wi-Fi Protected Access (WPA) security standard; WPA replaces the previous WEP standard which did not provide adequate protection for networks. Companies with newly certified WPA products include Atheros, Broadcom, Cisco, Intel, Intersil, and Symbol. ( www.wi-fi.org ) ( www.atheros.com ) ( www.broadcom.com ) ( www.cisco.com ) ( www.intel.com ) ( www.intersil.com ) ( www.symbol.com )

Yes TV, an interactive broadband services company, has launched Yes TV Plus, extending its program delivery to PCs. Hutchison Global Communications and PowerCom Network have introduced the service to their Hong Kong broadband customers. ( www.yes.tv ) ( www.hgc.com.hk )


Briefly Noted

Countries

US - The FCC has opened an inquiry into Broadband Power Line (BPL) Communications. They are seeking information and technical data including "the current state of high-speed BPL technology; the potential interference effects, if any, on authorized spectrum users; test results from BPL experimental sites; and the appropriate measurement procedure for testing emission characteristics for all types of carrier current systems." ( www.fcc.gov )

The FCC is also seeking more information from TV broadcasters, cable operators and electronics manufacturers about their efforts to speed the transition to digital signals, according to a letter from Chairman Michael Powell to the U.S. Congress. A recent congressional report found that about 40 percent of Americans had not heard about the digital TV transition at all, while another 43 percent were only "somewhat aware." Powell wants to determine what further steps are needed to help inform consumers.

Korea - The Korean government has announced an expanded vision called "Broadband IT Powerhouse", to promote the IT (information technology) industry as a key economic growth engine, according to the Korea Herald. Korea is the leading country in broadband penetration. The ministry also mapped out a vision for "u-Korea," or ubiquitous Korea. It envisions a telecom network that will be pervasive enough to offer uninterrupted access to the Internet, fixed-line and mobile networks - anytime, anywhere. ( www.koreaherald.co.kr/SITE/data/html_dir/2003/04/28/200304280009.asp )

The OECD released a study titled "After the Telecommunications Bubble". It concludes that broadband is growing fastest in the most competitive markets. It also says that fixed and wireless broadband services represent the biggest opportunity for telecommunication companies. Belgium, a strong promoter of competition between telecom operators and cable companies, now is the fastest-growing broadband services market in Europe. Meanwhile, the United States has fallen to tenth in the OECD's ranking of countries. ( www.oecd.org/EN/document/0,,EN-document-0-nodirectorate-no-2-21578-0,00.html )

China - Parks Associates reports the number of broadband users in China will grow to 13 million by the end of 2003. Their new report "Chinese Telecom Market: Overview and Analysis" says the growth is consistent with recent trends "in which broadband users in China grew from two million in mid-2002 to 6.6 million at year-end 2002, a 230% growth rate in six months." ( www.parksassociates.com )

Also Noted

Telework - ITAC, the association for advancing work from anywhere, released Teleworking Comes of Age with Broadband, its latest Telework America Report. ( www.workingfromanywhere.org/pdf/TWA2003_Executive_Summary.pdf )

comScore Networks announced the results of a recent study detailing broadband usage and quality of service. The comScore analysis found that while consumers are increasingly willing to pay for a faster connection, there is little consistency in the actual network speed delivered by cable modem and DSL providers. ( www.comscore.com/press/release.asp?id=322 )


Energy Management - "Broadband Without Internet": A Guest Article by Mark Francisco

Note from the Editors: The following is the fourth in a series of guest articles by experts from across the broadband ecosystem. Mark Francisco, Director Engineering Home Services, Comcast New Media Development, has been leading an engineering team centered on using the best of Comcast's data, telephony and video resources to seamlessly provide additional services to their customers. Mark currently serves on the CableHome Certification Board. Previously, he led the systems integration of CDMA Cellular Phones for Motorola and developed microwave communications hardware for satellites. Mark has a BSEE degree from Rutgers College of Engineering and an MSEE degree from Drexel University; he lives with his wife and two children in Clarksburg, NJ.


Broadband Lifestyle Interfaces – Energy Management

With more than 80 million households in the United States potentially able to connect to an always-on broadband infrastructure, there is substantial potential for operators to deliver innovative new services to the home. For instance, a service that enables a residential consumer to more effectively manage their energy consumption may be offered without the prerequisite of a high-speed Internet service subscription. This “Broadband without Internet” service model is well suited to telemetry and control applications, which rely on a persistent broadband connection, but do not require high speed or the other features associated with the Internet, such as e-mail. These types of services are developed to provide benefits to consumer with little or no cost while also providing value to the service provider, in this case the electric utility.

An energy management service interconnected via broadband communications can provide a method of controlling demand during critical consumption periods as an alternative to additional energy generation. This form of capacity will provide benefits to both the utility and consumer. As a result, services such as these can potentially make the existence of a broadband connection in the home as essential as electricity or the telephone.


Description of an Energy Management Service

Energy management equipment allows the homeowner and electric utility to monitor and control the appliances that are responsible for the majority of the electric load in the home, e.g., air conditioning, water heaters, pool pumps, etc. With a persistent connection provided to these devices as well as the house electric meter, energy demand can be monitored almost real-time. The homeowner can also use this capability to automate their comfort control systems and other high load appliances. Additionally, the homeowner has access to the system through equipment interfaces in the home and also remotely via the Internet, where detailed reports specific to that home can be viewed. The utility can also use a secure web based interface to utilize these same capabilities at an aggregate level, within a single location and over many locations, to curtail consumption within the guidelines of the customer service agreement.


Roles and Benefits

Consumer Benefits

Participation in a demand-side management program allows a consumer to have greater control over their comfort systems and high-energy consumption devices. Because the service is provided over a broadband connection, the homeowner has access to instantaneous data, both within and outside the home. Additionally, it is possible for the homeowner to decline to participate in a given curtailment. Benefits of participation in the service include:

  • More intelligent use of energy, resulting in potential savings
  • Remote access to comfort controls and remote monitoring of home environment
  • Energy conservation, and concomitant reduction in pollution and consumption of natural resources
  • Ability to schedule comfort settings to correspond with home occupancy patterns
  • Ability to schedule run-time cycles on pool pumps and water heaters to correspond with needs
  • Ability to monitor energy usage and expense between billing cycles
  • Analysis of an individual home’s energy efficiency and performance by monitoring temperature ramp and recovery rates of heating and air-conditioning systems

By allowing the homeowner to opt in to specific curtailment programs, the user application permits a homeowner to tailor the extent of their participation in demand-side management to their unique needs and comfort scale. In addition, homeowners may opt out of specific curtailments by canceling them once they have taken effect. Of course, a homeowner’s cost savings or other incentive would vary depending on their chosen level of participation.

Utility Benefits

Electric utilities are responsible for generation, transmission and distribution of energy to their customers. Their infrastructure must be capable of supporting peak demand, e.g. supplying power for air conditioning on a hot August afternoon. Regionally, homes have consumption patterns that typically peak during a specific portion of the day. These peaks may shift seasonally. The summation of these peaks requires a grid capable of far more capacity than the average consumption requires. For example, during warm days in the summer, power grids and generators may be operating at or near maximum capacity during the afternoon peak cooling period. Generation to support this peak demand may require the construction of additional power capacity, the use of more costly “peaker” power plants, or spot purchases of energy from intrastate transmission companies, often at very high prices.

Demand-side energy management systems assist in reducing demand for energy at these peak times. Through the monitoring and control capabilities contained in the installed hardware and associated software, curtailments can be issued to reduce peak consumption, reducing the difference between peak and average demand. Often, curtailments cause load-shifting patterns, where the peak load is shifted to a below average usage period later in the day. This results in greater efficiency for the utility and reduced strain on generation assets. The goal is to turn the sharp, peak demand consumed in a few short hours of the day into a level, sustainable consumption throughout the day.

Curtailments can be issued through a combination of events: by temporarily shutting off discretionary loads such as hot water heaters and pool pumps and/or by making changes to the environmental thermostat control set points. The system is designed to change a homeowner’s thermostat setting in small and gradual increments to minimize the perception and impact of the curtailment. In summary, the utility can use an energy management service as an alternative to activating costly “peaking” power plants or to the purchase of expensive spot market power from other plants. Potentially the stress on local transmission and distribution facilities may be reduced through monitoring and targeted curtailments.

Broadband Service Provider Benefits

The broadband access provider is responsible for providing a secure and managed network connection to the home. The energy management service may be delivered to the home without requiring the homeowner to subscribe to high-speed data services. Therefore, the service provider gains the ability to provide a broadband service to a home independent of the homeowner’s choice to subscribe to any direct product offerings. This represents a new revenue opportunity and does not relate to or interfere with the ability to sell traditional products, such as high-speed Internet.


Components of Demand-Side Management

Communicating devices --> Click for larger pictureThe system as currently implemented consists of an energy gateway, one or more communicating thermostats, and optional subnet metering switch modules. The energy gateway is comprised of a DOCSIS cable modem integrated to a gateway. The modem is configured specifically for the data associated with the energy management service. The gateway contains an embedded processor and control applications and the radio components necessary to communicate with the metering and control devices. The communicating thermostat is similar to a conventional programmable thermostat, but with the capability to transmit and receive temperature, heater or air-conditioner mode, and set points data and commands to and from the gateway.

Invensys RF Load Control Meter --> Click for larger pictureThe solution also includes a meter and switch device called an LCM (Load Control Meter) that may be installed in any home branch circuit to create a separately controlled and metered subnet. The LCM allows control of dedicated high-current loads such as electric hot water heaters, pool and spa pumps.

Invensys communicating electrical meter --> Click for larger pictureA communicating electric meter is included, allowing monitoring of whole house consumption and remote meter reading, which may provide an additional benefit to a utility not currently implementing such a capability.

All in-home elements can be installed by the energy management service provider, including the broadband access gateway.

The infrastructure components in the system include a data aggregation server, security server and web-based application server. The radio communications protocol has been optimized for range and reliability at a low data rate.
System graphic of Energy Management System --> Click for larger picture


Trial Activities

Comcast New Media Development and its partners, PECO Energy Company and Invensys have been conducting a technical trial of a demand side management product, “GoodWatts(TM)”, since the summer of 2002 in Southeastern Pennsylvania. Approximately 100 homes were outfitted with the system for the purposes of technical evaluation and to begin measurement of the effects and impacts of demand-side management. Invensys developed the communicating hardware and application software and additionally manages the energy data, providing it to both the utility and homeowner.

Trial participants have reported favorable experiences, and have liked the benefits of conservation, and remote access to their comfort control systems. Curtailment events during the trial have successfully reduced consumption in the homes and are a preliminary indicator of the efficacy of demand-side management. Network traffic going between the homes and infrastructure servers has been measured and determined to be small enough to allow large scale deployments without impacting high-speed data users. Efforts are underway to secure a larger scale market trial in order to more fully quantify the impacts of demand-side energy management.


Future Opportunities

The introduction of broadband monitoring and control capabilities into the home may allow for the future extension of other benefits to the homeowner. The ability to remotely provision software into the embedded processing gateway allows additional applications to be easily installed. In the future, new and existing appliances will be provisioned with integrated communication capabilities that enable additional applications for automation and remote monitoring services such as breakdown detection, lighting, appliance timing, and home security and safety applications.


Conclusions

A demand-side energy management product is a tool for both the electric utility and homeowner that provides for flexible control of power consumption. Use of a secure and managed broadband connection adds the ability to verify the effects in real-time and benefits the broadband service provider by increasing their service reach to homes, beyond traditional products. As a result, the electric utility gains operational efficiency, the customer benefits from greater control and potential for conservation, and the broadband service provider obtains new service revenue.

( www.comcast.com ) ( www.peco.com ) ( www.invensys.com )


Broadband Wireless World - The "Big Boys" Have Arrived

Attending a conference for the first time, we try to form a composite of the show's target industry or group. Aside from the obvious connection that the attendees were interested in wireless broadband technologies and services, those we met at last month's Broadband Wireless World represented tremendous diversity, including:

  • Companies large (Verizon and Intel) and small
  • Using licensed and unlicensed spectrum
  • Using proprietary technologies and those based on standards such as 802.11/Wi-Fi, 802.16/WiMAX, 802.20, and (surprisingly) DOCSIS
  • Established local exchange companies and new competitive providers
  • Targeting urban, suburban and rural markets

We concluded that part of the diversity comes from the fact that broadband wireless technologies make sense for many different market segments. Much of the WISP activity has been in "unserved" markets: areas with low population densities that did not receive broadband service from either the local telephone company or the cable operator. Now wireline carriers are evaluating broadband wireless to reach homes within served markets but not reachable by current technologies -- such as homes more than three miles from the telephone central office. It is increasingly being deployed to compete with existing wireline broadband services.

We are also starting to see a market transition from an opportunity which had first drawn the attention of small entrepreneurial groups that founded WISPs, but now is garnering more big company and mainstream attention. Verizon is clearly in the latter category.


Verizon--"Technological Diversity in the Physical Plant"

Brian Whitton of Verizon --> Click for larger pictureWe have written previously about broadband wireless trials by both Verizon and BellSouth. A keynote speech by Brian Whitton, Executive Director of Network Platform Evolution at Verizon, described how Verizon believes in technological diversity in the physical plant, using technologies that are "service agnostic and service unaware." He said that Verizon can currently qualify between 60-65% of customers from the CO to receive DSL service. That leaves 35-40% that either won't be covered or need another technology to do so. Verizon sees "broadband fixed wireless" (BFW) as one means to increase coverage of DSL-like services. Brian is also very much involved in fiber planning and deployments and this is another direction we expect to see Verizon pursue--although its planning and deployment are significantly slower and more costly than BFW.

Because of recent BFW technology advancements like non-line of sight and self-install, Verizon trialed BFW to see if it could handle the rate, reach and service transparency they required. Brian reported that the trial service did indeed provide the required service coverage of 90%, 99.9% of the time and with sustained DSL-like transmission rates of between 768 kbps and 1.5 Mbps.

Now that Verizon's Fairfax trial has been completed with successful results, they are evaluating RFP responses and expect to select a vendor this quarter; commercial deployment is planned later this year. This depends, however, upon vendor responses meeting Verizon's business case constraints, which include not only price and performance but also OSS integration, tower availability, affordability and access.

It will be interesting to observe where Verizon chooses to deploy BFW (assuming they go forward with it) and where they deploy with fiber. A recent key FCC decision will allow ILECs like Verizon to deploy fiber without requirements for sharing with competitors. Verizon and other LECs have already announced their intention to move more aggressively to use fiber to accelerate DSL deployments, in some cases using existing fiber to deploy DSL from remote terminals, in others to deploy new fiber. We see a balancing act between time to deploy and cost on one hand (favoring BFW and other DSL extension methods) and the desire to offer the complete triple play of services (favoring new fiber). So we'll be watching to see what happens with the RFP selection later this quarter.


Intel--Wireless is More than Wi-Fi

Sriram's positioning of segments --> Click for larger pictureWith the huge public focus that Intel has been putting on Wi-Fi, we were delighted to hear Intel present a balanced view of broadband wireless (see the following article). Sriram Viswanathan, Managing Director at Intel Capital, presented a talk that posited that Wi-Fi is the current wireless disruption and that 802.16 might be the next. He divided broadband wireless access into three basic segments: fixed (for residential and SMB access and for backhaul); portable (destination based and ad-hoc); and mobile.

In the metropolitan area network (MAN) portion, Intel is very supportive of the 802.16a standard, because of its higher throughput at longer ranges and quality of service support. Sriram's talk included a chart showing comparative performance, measured as maximum bits per second per Hertz: 802.16a is capable of ~5 bps/Hz, 802.11a at ~2.7 and 802.20 projected at ~1. Intel has become an advocate for the WiMAX Forum as a way to accelerate broadband wireless access deployments worldwide. Sriram sees WiMAX as the organizational equivalent of the Wi-Fi Alliance for 802.11: driving interoperability and compatibility of IEEE 802.16 conformant systems, leading to interoperable equipment and a stable, standards-based platform.

For component makers like Intel, this represents a volume silicon opportunity. No wonder then that his summary slide said "802.11 is the driver for the 2nd coming of Broadband Wireless."


Our Talks

We gave two talks at the conference:

  • In a session on "Profitability for WISPs", our presentation "Making Residential Broadband Profitable -- The Challenge For WISPs" said that unserved markets are shrinking fast as incumbent wireline providers fill in the gaps, and that WISPs will need to develop competitive strategies based on wireless advantages.
  • We ran an hour-long "Ask the Experts" session. Our presentation "Broadband Applications Trends and Evolution" discussed current and emerging broadband applications in the home. We showed our "home movie" about how we use broadband in our own home, and answered questions from the audience on audio and video applications.

Please see http://www.broadbandhomecentral.com/presentations.html#bbww03 for links to our presentations and "home movie".

( www.shorecliffcommunications.com/bwwf03/ ) ( www.verizon.com ) ( www.intel.com ) ( www.wimaxforum.org )


Reference Material

Please see our topical index http://www.broadbandhomecentral.com/guide_access.html#wireless for our prior articles on broadband wireless access.


Broadcom - Today the Laptop, Tomorrow the TV?

With all the buzz about Wi-Fi and wireless networking, it's easy to get swept up in the excitement. It's certainly been true that this has been one of the few bright spots in an otherwise depressing and depressed telecommunications environment. Semiconductor companies are the starting points for the products and services of tomorrow and so it's always interesting to understand where they are placing their resources and their rationale for doing so.

Broadcom is one of the leading players in chips for broadband access and networking. Their chips go into cable and DSL modems, digital cable and satellite set-top boxes, home gateways, and many types of home networks including Ethernet and Wi-Fi. We visited with Broadcom to discuss wireless networking in general and 802.11g in particular. We met with Jeff Thermond, VP and GM, Home and Wireless Networking Business Unit, and with Jeff Abramowitz, Senior Director of Marketing.

802.11g and "54g"

As many readers know, 802.11g is the latest version of the IEEE 802.11 standard, providing up to 54 Mbps at 2.4 Ghz. 11g products are fully back-compatible with the very popular 802.11b "Wi-Fi" products, and can operate together in mixed networks. The earlier 802.11a standard provides the same speed as 11g, but is not compatible with 11b, since 11b and 11a operate in different spectrum (2.4 GHz and 5 GHz, respectively). We believe that 11b will fade out in favor of 11g and dual-band 11g/11a systems.

802.11g is not yet an approved standard--final standards approval is expected in the next few months. We expect the Wi-Fi Alliance to start certifying 11g products and applying the "Wi-Fi" logo shortly after the standard is ratified.

Broadcom decided not to wait for the standards process to be completed, and released a pre-standards silicon solution into the market late last year with the name "54g™". Many companies have now brought 54g-based products to market. These include home networking products--routers, access points and LAN cards--from Linksys, Apple, Belkin and Buffalo; and notebook PCs from Compaq/HP and soon from Dell.

54g wireless access point and broadband router --> Click for larger pictureBroadcom's aggressive strategy appears to be paying off. In March it announced that it had shipped more than three million 54g chips since starting production in December 2002, and Linksys--the leading provider of wireless LAN products--reported that its sales of 54g products approached 802.11b sales in February.

This strategy is not without risks. Broadcom has said that its "54g" solution has enough built-in flexibility that pre-standard products can be upgraded to the final standard with a firmware download, and Thermond and Avramowitz are still confident of this. But this claim won't be proven until the standard is ratified and full interoperability testing is completed. Of Broadcom's 54g customers, only Buffalo explicitly assures buyers that "if the certification materially changes the principal operating features of our pre-standard 802.11g products, we will replace or upgrade any of those products at no charge."

Next Steps for Wireless

Jeff Thermond believes that "dual-band tri-mode" products--supporting all three standards--will eventually dominate the market. These mature products will include the full QoS and security standards--being developed by the IEEE 802.11e and 802.11i working groups--which are now expected to be completed in early 2004.

Pending completion of these standards, the Wi-Fi Alliance has released an interim security specification called WPA (a subset of the draft 11i standard) and will probably do the same for QoS. Existing 54g-based products should be upgradable to these interim specifications with a new firmware download--Broadcom reference designs were among the first products to receive Wi-Fi certification for WPA. Thermond believes that the chip has sufficient processing power to handle the requirements for the full specifications.

The 54g strategy is just the start of Broadcom's plan to position itself as one of the long-term leaders in the wireless business. Broadcom believes that wireless networking will be embedded into many products -- from home gateways and game players to portable phones and TV sets.

Thermond said that Broadcom's strengths lie in integrating many functions together to create systems on a chip, and that 11g and eventually 11g/11a will become a core component in single-chip designs for low-cost consumer devices. He predicts that as the market shifts from networking devices to consumer products, Broadcom will be one of the winners with low-cost fully-integrated silicon solutions.

Our Testing

We have recently received networking products based on Broadcom's 54g chips from Linksys and Buffalo, and are testing them as part of our comprehensive 802.11 home networking test. We hope to report on these devices in the next issue of our report.

( www.broadcom.com ) ( www.54g.org ) ( www.linksys.com ) ( www.apple.com ) ( www.belkin.com ) ( www.buffalotech.com ) ( www.hp.com ) ( www.dell.com )


Wi-Fi Press: Sense or Nonsense?

The drum beat of reports about the glories of Wi-Fi have increased to such intensity that a backlash was inevitable. Contrary to rumor, Wi-Fi does not cure male pattern baldness nor make teleportation possible. One reader shared a link that expressed the growing weariness with the hype. See http://www.j-walk.com/blog/docs/wifispray.htm to find out about "WiFi Speed Spray", but be sure to bring your sense of humor.

Don't misunderstand our waggish humor here--we are confirmed Wi-Fi users and believe the technology is really wonderful for "cutting the cord". After all, it's what makes possible the Smart Display we've been using and write about elsewhere in this issue. It's just that some of the stated claims for "Wi-Fi" have gotten pretty overblown.

We recently read two articles that helped to put Wi-Fi in perspective. The first, by Tom Nolle in Network Magazine ( www.networkmagazine.com/shared/article/showArticle.jhtml?articleId=8703540&classroom= ), asks if 802.11 could displace DSL or cable, and concludes it's "more likely that it would augment the two."

The second, by Robert Wells, Managing Director at Lennox Research ( www.lennoxgroup.org/rbs0503.html ), analyzes 15 articles from the recent press. It charts "the pundits predictions about Wi-Fi's Future" and shows how they fall all over the map--both about Wi-Fi's potential for profit and its level of disruptiveness as a technology. Wells thus concludes "they definitely can't all be right".

We believe much of this disparity is the result of people using the term "Wi-Fi" very loosely. When they write (or say) "Wi-Fi", some really mean "broadband wireless". Too many writers can't (or don't bother to) distinguish between real Wi-Fi as defined and trademarked by the Wi-Fi Alliance; technologies based on modifications to the 802.11b standard that make them ineligible for interoperability certification; proprietary broadband WMAN technologies; and the coming 802.16 or 802.20 WMAN standards.

Viewed this way, we see justification for categorizing the "broadband anywhere" technologies (which 802.20 aspires to) in the "upper right" of Wells' chart--they are both highly disruptive and have the potential for big profits. If you substitute "wireless broadband" for "Wi-Fi", it would also help understand reports like this one from USA Today on April 17th: "By using Wi-Fi, parts of Iraq could skip the build-out of traditional phone and cable networks altogether."

Is there a phrase that means "wireless broadband" independent of what it's used for, including both WLAN and WMAN, fixed, portable and mobile? Perhaps what we really need is to invent a brief phrase everyone can use for easy reference. How about "WiBro" or "Wi-Broad"? If you have a better idea, or think there's already a short phrase that captures the generic meaning, let us know. We'll print your comments next month and see if its use will grow.


Broadband Home Labs - Our First "Smart Display"

We first saw a Webpad more than three years ago, and have long believed that these wireless touchscreen devices would play an important role in the broadband home. Now we're testing a ViewSonic airPanel V110 - one of the wireless networking devices based on Microsoft's "Windows-powered Smart Display" technology. Here are our first impressions based on using it for a few days.

The airPanel V110 has a 10" LCD screen with a resolution of 800x600. It has built-in 802.11b wireless networking and works fine with an existing Wi-Fi access point in our home network. For input, it uses a touchscreen with a stylus and also has a "mouse-like" mechanism. It does not have a keyboard--text input is done on an on-screen keyboard and with a handwriting recognition system. It is sold with an optional dock to charge the battery and attach keyboards and/or a mouse.

Smart Displays are not intended to be stand-alone client devices. Instead, they are an extension of the screen of an existing Windows XP Pro PC - they "enable a user to pick up the screen and have the same PC experience in any room" as we said in our article on Smart Displays in BBHR 11/24/2002 http://www.broadbandhomecentral.com/report/backissues/Report0211_6.html .

V110 Smart Display in our kitchen --> Click for larger pictureWe have been using the V110 for three days so far, and have been very impressed with it. It has done nearly everything we expected and some things we didn't think it could do:

  • It's a great extension of the "always on" experience - now we don't have to walk to a PC to get on the Web. We've used it to surf the Web in the kitchen while watching TV and in other places in our house while away from our PCs.
  • We've used it to play music throughout the house from our AudioTron digital audio player and on a headset from Rhapsody.
  • We've used the handwriting input mechanism to make notes.
  • We set it up so we can connect to either of our main PCs.
  • The battery life is good and it works well with our wireless network.

At SCTE Cable-Tec Expo we also had a preview of the V110 running the Nevo home control software from Universal Electronics. With this software, the Smart Display transforms itself into your personal universal remote control. Unlike all the other applications we've used, the Nevo software runs locally on the V110 rather than remotely on the master XP Pro PC. It provides a good example of additional types of applications that will provide value, beyond extending your desktop applications around the home. Nevo will be available in July and is currently free when users buy a ViewSonic display.

Our biggest issue is that a person can be logged into a PC from only one place, either from the PC's main screen or from the Smart Display; logging in on the Smart Display logs off the main screen. This isn't a huge problem for us, since we each have our own PC, but it would be a real problem in a home with only one main PC. Microsoft has just announced that they will be addressing this problem in the fall with a new Windows XP mechanism permitting two users to be logged on simultaneously.

The other real-world issue in buying one of these devices has been the price. The V110 unit we are trialing had been selling for around $1000. However, buy.com is listing the product for $799 with a $75 rebate. If this means a newer unit is on its way, it will be interesting to watch the pricing of the next units. Nice as the V110 seems, our personal willingness to pay, and we suspect that of other consumers, is well below the $1000 price point.

Net-net, our initial impression is that this device is well "over the bar"--it works well and its human factors are surprisingly good. We'll provide a full report in the next issue.

( www.viewsonic.com ) ( www.microsoft.com ) ( www.myNevo.com ) ( www.uei.com )


Lifestyle Notes from the "Always-On" World

With all the discussion about broadband's increasing speeds and applications, it's easy to take for granted the life-style changes that an always-on service makes. It's hard to figure out when our behavior changed, but it was well over a year ago that we made the Web our reference point for virtually everything. Search tools like Google and the Web's vast resources, plus an always on connection, made it a "no-brainer".

Heuchera "Snow Angel" --> Click for larger pictureA sampling from this past weekend included: finding a great way to whiten a yellowed synthetic blouse (http://www.havennook.com/Household%20Hints/laundry_hints.htm), planting tips for a new Heuchera Snow Angel for the garden (http://www.mobot.org/gardeninghelp/plantfinder/codem/S170.shtml), and an on-line audiology test (http://www.handtronix.com/webdata/flash/onlinescreener.htm).

In each case, "always-on" was more important than broadband speed; what made it useful was the fact that we could access the Web immediately and find the answer. Now "always-there" devices like Microsoft's Smart Display (see the article elsewhere in this issue) help users take the next step and have the information right at hand, helping to reinforce the behavior.

The problem for service providers is that there's virtually no way to get this across to anyone who isn't experiencing it. It's exactly the same problem that PVR companies like TiVo have. Anyone who has it can't live without it and won't give it up; anyone who doesn't, can't understand what all the fuss is about. But world of mouth and viral spread make it inevitable that both will reach and pass the tipping point--just like voice mail and answering machines did many years ago.

( www.google.com ) ( www.microsoft.com/windows/smartdisplay/default.asp ) ( www.tivo.com )


Disruptive Technology in Action

Clayton M. Christensen's book "The Innovators Dilemma" introduced the concept of disruptive technologies and has been a frequent topic in these columns (see BBHR 10/26/2000 http://www.broadbandhomecentral.com/report/backissues/Report0011.html#link5 ). We're living in a world where every day we see the disruptive effects of IP communications on incumbent companies. For telephone companies, it increasingly means the end of metered telephone service.

Vonage Web ad: "$39.99 - Use your broadband internet connection for great savings every month" --> Click for larger pictureWe've previously written about Vonage providing unlimited calls to anywhere in the US and Canada for a flat fee of $39.99/month for broadband internet users. Now ILECs like SBC are fighting back by introducing an unlimited calling bundle called ALL DISTANCE, which provides unlimited local and long distance calls, plus additional features, for $48.95-$52.95 a month, depending on the state. Verizon has announced a similar plan for small business.

In Europe, we see IP companies like FastWeb bundling flat-rate telephone service to all fixed-line phones in Italy. In Japan, we see Softbank's Yahoo Broadband rapidly adding DSL subscribers and broadband phone users; their VoIP service called "BB Phone" for Yahoo! BB subscribers costs only 7.5 yen per 3 minutes to call from Tokyo to New York, and is free if both sides are using BB Phone. In April they added 184,000 ADSL subs to reach 2,547,000; users of their IP telephone service increased 188,000 from the end of March to a total of 2,162,000. NTT is now responding.

International calls are increasingly impacted by IP. Historically, they have been very expensive, but new services like telcoBlue's Internet Voice Network (IVN) service is using IP to offer savings for broadband users calling Spain, Portugal and Italy from anywhere in the world. Subscribers use a Cisco ATA 186 supplied by telcoBlue which is shipped pre-configured and plugs into an existing cable or DSL modem. This is only one example in a growing area of international IP services.

With telco voice revenue eroding, data has been one potential answer for other sources of revenue. Across the world, DSL dominates broadband service, with cable modems representing less than 40% of all subscribers. US telephone companies' early ambivalence about DSL allowed cable modems to get nearly 2/3 of broadband subscribers. Until recently, those telephone companies--focusing on near-term financial returns rather than market share--were raising the price for DSL services. Now the competitive pressures are finally being felt as ILECs are creating tiered services, cutting prices, increasing speeds and adding differentiated services. In March, SBC with its partner Yahoo! launched a 1.5 Mbps, $35/month service, and offers bundled prices that are even lower; it is said to be planning to introduce a $25 "semi-fast" DSL service in several markets soon. Verizon has also lowered DSL prices dramatically to $35/month ($30 when part of a bundle with other Verizon services) and announced a trial in Manhattan providing free access to Wi-Fi hotspots around New York City.

What's the moral of the story? The hobbyist voice technology that originated with VocalTec is fundamentally altering the traditional telecommunications world. New players and competitors have emerged and the old ones are struggling. Watching it unfold is an amazing process!

( www.vonage.com ) ( www.sbc.com ) ( www.verizon.com ) ( www.fastweb.it ) ( www.softbank.com ) ( www.telcoblue.com ) ( www.vocaltec.com )


Your Voice -- Readers' Comments

Homeland Security Entrepreneurs Wanted

Kelly Porter, Managing Partner of ZAP Ventures, shared with us an article from the April 3, 2003 San Jose Mercury News, focusing on his current search for Homeland Security Entrepreneurs and Investors. ZAPVC was formed as an early stage venture fund with broadband related companies as their core focus. Kelly notes that "Some of the best broadband deals we were seeing in recent months had a homeland security focus."

He indicated that ZAPVC has expanded to include investments “in the growing $100B+ homeland security industry, as a natural evolution of the firm’s charter to invest in broadband-related companies." He added: “In homeland security specifically, we look first at the commercial/private sector potential of a product or technology, and second, at the government market potential. Also, we are generally not talking to either pure biotech companies developing drugs/medical devices (because it is not our expertise), nor companies that are developing weaponry (because of the moral issues involved).”

If you are an entrepreneur who is building a homeland security-related company and who might be seeking investors, check out Kelly’s website for his investment criteria http://www.zapvc.com/index.htm and contact him if there’s a fit.

Powerline as a Third Wire

Oleg Logvinov pointed out that at the CITI PLC III conference, there was a another model presented in addition to the rather pessimistic one we mentioned in our article (http://www.broadbandhomecentral.com/report/backissues/Report0304_3.html). He wrote: "I think it would be fair to mention that Dave Shpigler presented a much more positive model." We agree and readers can see that presentation at http://www.citi.columbia.edu/events/powerline/shpigler.pdf .


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