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The October 20, 2003 Issue Provided by System Dynamics Inc.
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In This Issue

Heard on the Net

Fiber to the Premises
Gaining Momentum

Digital Dreams Meet Reality -
Creating a Simple Home Network

Visit Us During CES -
The "Home by Design" Showhouse

Intel's Digital Home
Corporate Initiatives That Work

Broadband Central -
More on Wi-Fi for Wireless Broadband Access

Broadband Home Labs -
Smart Display re-visited

Your Voice -
Readers' Comments


Heard on the Net

News about People and Companies Influencing The Broadband Home


People News

Ahmet Ozalp joined Atlas Venture to focus on technology investments including broadband in metro and access networks, home networking and wireless multimedia distribution. ( www.atlasventure.com )

Sam Endy has been appointed President and CEO of ArrayComm. He was previously ArrayComm's COO. ( www.arraycomm.com )

Roy Goodman was appointed CFO of RealNetworks Inc. ( www.realnetworks.com )

Martin Jowett was appointed COO of Bulldog Communications. ( www.bulldogdsl.com )

Joe Parola is leading Sales and Business Development at Jedai Broadband Networks. He was previously with Concurrent. ( www.jedai.com )

Randy Shapiro was named VP of marketing at Eagle Broadband. ( www.eaglebroadband.com )

Bob Wallace was named VP of Sales, North America for Minerva Networks. He was previously with Calix. ( www.minervanetworks.com )


Company News

--Funding

Boingo Wireless has raised $10 million in series B financing. ( www.boingo.com )

Grande Communications has obtained an additional $45 million in equity funding. ( www.grandecom.com )

TeleSym Inc. completed a $12.5 million second round of funding. ( www.telesym.com )

Wave7 Optics added an additional $15M to their Series C funding round, bringing the C round total to $30.5M. ( www.wave7optics.com )

--Other News

BellSouth and America Connect announced a joint trial of wireless broadband in two rural North Carolina counties. The trial will be in the 2.3 GHz WCS band, for which BellSouth holds FCC licenses throughout the Southeast, and will examine costs, market acceptance, feature sets, coverage, and overall economics of providing high-speed broadband connections via fixed wireless to underserved rural areas in the Southeastern U.S. Funding is being provided by the Rural Internet Access Authority, a state-created body with a mandate to connect all North Carolina residents to the Internet. ( www.bellsouth.com ) ( www.dsltogo.net ) ( www.ncruralcenter.org/internet )

BSkyB announced that Sky Digital has achieved its target of seven million direct-to-home (DTH) satellite subscribers ahead of schedule, five years after its launch. ( www.sky.com )

Cox Communications continues the US cable industry push on HDTV, announcing it will make high definition television channels available in 85 percent of its market by the end of this year. ( www.cox.com )

The DSL Forum has published two new technical reports (TR-058 and TR-059) which lay out technical requirements for next-generation DSL services, especially addressing traffic shaping and quality of service issues over DSL. The goal is to facilitate provision of multiple voice over IP streams, bandwidth on demand and real-time content delivery. ( www.dslforum.org )

Korea Telecom has signed a memorandum of understanding with NTT Communications Inc. to provide global roaming for wireless Internet services. KT's Nespot wireless LAN subscribers will be able to access high-speed Internet connections at Japanese "hot spots". KT is also a member of the The Wireless Broadband Alliance, whose goal is to drive adoption of wireless broadband services globally. ( www.kt.com ) ( www.ntt.com ) ( www.wirelessbroadbandalliance.com )

Microsoft launched Windows XP Media Center Edition 2004 and announced that they have worked with content providers, including CinemaNow, Movielink and Napster, to provide remote control access to on-demand music and movie subscription services. ( www.microsoft.com )

Microsoft and Vodafone announced a partnership to develop a new set of mobile Web standards based around XML. It is intended to create opportunities for delivering new customer services integrated across wired and wireless networks. ( www.microsoft.com ) ( www.vodafone.com )

Microsoft TV Division announced plans for the development of a new Internet Protocol television (IPTV) delivery solution for cable and telecommunications operators to offer next-generation TV services over existing broadband networks. Companies planning to work with Microsoft TV include Harmonic, Tandberg, Juniper, Intel, Pace Micro and Thomson. Bell Canada and Reliance Intercomm announced plans to jointly create and test new IPTV services with Microsoft TV. ( www.microsoft.com/tv )

Movielink entered a multi-year agreement with Time Warner Cable's Road Runner to offer co-branded video-on-demand services to Road Runner's broadband customers. Movielink also has created a relationship with Terra Lycos in which the companies have created a co-branded site that offers download access to Movielink's library. ( www.movielink.com ) ( www.rr.com ) ( www.terralycos.com )

Musicmatch announced its new Musicmatch Downloads service, which lets consumers purchase and download music from all five major labels and over 30 independents. Customers can play tracks on up to three PCs simultaneously and transfer them to Windows Media-supported music players. Tracks can be burned to CDs, but the same playlist may only be burned up to five times. Tracks cost 99˘ each and most albums are $9.99. ( www.musicmatch.com )

NetCentrex, BitBand, and Telsey announced a partnership to offer a pre-integrated solution which combines the triple play of telephony, VoD and Internet access over IP broadband connections. The new joint solution will use a single end-user device, the new Telsey "Waves" IP-video station. ( www.netcentrex.net ) ( www.bitband.com ) ( www.telsey.com )

RADVISION announced a new version of its MCU (Multipoint Conferencing Unit), which includes support for the H.264 video compression standard and implementation of the new H.239 standard, support for emerging communications protocols (SIP and 3G-324M), and end points. ( www.radvision.com )

Rainbow's VOOM combination satellite dish, HD receiver and off-air antenna is now available in the U.S. and focuses heavily on addressing the HDTV market. The equipment is being offered by Sears and uses Motorola MPEG-4 compatible receivers. There will be no charge for programming until February as the channel line-up is expanded. ( www.voom.com ).

Redline Communications announced an 802.16a compliant (WiMAX) product at ITU Telecom World. ( www.redlinecommunications.com )

Samsung Electronics announced a vendor partnership to provide video-over-DSL platforms to telcos. It includes elements from Kasenna Inc., Optibase Ltd, and Orca Interactive. The IP system will support traditional video services and network-based digital video recording. ( www.samsung.com ) ( www.kasenna.com ) ( www.optibase.com ) ( www.orcainteractive.com )

Vonage reported that its overall subscriber base reached 50,000, and it is adding subscribers at 2,000 lines per week. They also lowered the monthly rate covering the US and Canada to $34.95. ( www.vonage.com )

Walt Disney Company launched its MovieBeam on-demand movie rental service starting in Jacksonville, Fla.; Salt Lake City, Utah; and Spokane, Wash. It gives consumers access to DVD and video releases from major studios, offering 100 movies in digital quality, with 10 titles updated each week. The content is sent via a secure data stream through the broadcast spectrum of TV stations owned by ABC (a Disney subsidiary) and affiliated with PBS. Digital wireless signals are received through the indoor antenna of the Samsung-manufactured MovieBeam receiver and stored on its hard drive. The service costs $6.99/month plus $2.49 to $3.99 per movie viewed and does not require a consumer to have a cable or satellite television subscription. ( www.disney.com ) ( www.MovieBeam.com )

The Wireless Communications Association announced formation of the Personal Broadband Alliance. Comprised of wireless broadband carriers, infrastructure providers, hardware and software vendors, the goal is "to advance mobile and portable broadband consumer services through the U.S. and the world." ( www.wcai.com ) ( www.wcai.com/pba )

Editors Note: It is interesting to observe from the above list how many broadband-oriented services are coming to market, now that the base of broadband subscribers has reached critical mass. It's also worth noting the increasing frequency of mention of VOD (it's really here), HDTV and integrated all-IP services in the news. One phrase whose futuristic note may be passing is "triple-play", now that companies like Eagle Broadband are talking about their "four-play" (security is their fourth).


Briefly Noted

The FCC has released their report titled "Broadband Internet Access in OECD Countries: A Comparative Analysis". Using the measure of "broadband subscribers per capita", it notes that "South Korea and Canada are far ahead of the rest of the world" and that "Sweden, Belgium and Denmark have grown rapidly and overtaken the U.S. in the last two years." After examining broadband deployment in selected countries (South Korea, Canada, Belgium, Denmark, Sweden, Switzerland, the U.S., Japan, Germany and the United Kingdom) it concludes that "Cable companies, rather than incumbent carriers, have been the leaders in introducing broadband access services to OECD countries". It notes that once the service was shown to be a viable business, the telecom carriers started offering DSL services and proved to be strong competitors.


Europe

Tele-Health Applications: ULP-AMIs

We've published two recent articles about using residential broadband communications in tele-health applications. Devices that can transmit information about the patient's physical condition are part of enabling such services. Ultra Low Power Active Medical Implants (ULP-AMIs) are one example. Without common standards, combined with national frequency allocations, usage of such devices can be prohibited in certain countries. The European Telecommunications Standards Institute (ETSI) has completed most of the standardization program needed for the harmonized use of ULP-AMIs in Europe in conjunction with the Low Power Radio Association (LPRA). Once the frequency bands have been harmonized, patients with implanted medical devices, such as pacemakers, defibrillators and insulin pumps, will be able to travel from one European country to another. ( www.etsi.org ) ( www.lpra.org )


U.S.

  • States have started to regulate VoIP providers, with the distinction between information and telecommunications services once again at issue. The California Public Utilities Commission (PUC) decided to treat VoIP providers like all other telephone providers, thus regulating them in that state. While a few smaller states such as Wisconsin and Minnesota had previously announced that VoIP firms would be regulated, California is significant because of its size and influence. Meanwhile, a US district judge issued a permanent injunction against the Minnesota PUC's ruling to regulate Vonage, saying that Vonage is an "information service" rather than a "telecommunications service" and thus exempt from state regulation.
  • The regulatory classification of cable broadband networks is again undecided after the 9th U.S. Circuit Court of Appeals said the March 2002 FCC ruling that cable broadband networks are an "information service" rather than a "telecommunications service" was incorrect. Information services are not subject to regulations forcing their providers to resell their lines to others, but telecommunications services are required to do so. The FCC plans to appeal the decision.
  • The FCC adopted service rules for commercial use of millimeter wave wireless technology, which uses high-frequency spectrum to deliver large quantities of data at high speeds. The technology was developed by Loea Communications and was approved to operate commercially in the 71-76 GHz, 81-86 GHz, and 92-95 GHz bands which were originally for U.S. government use. Cisco has been a backer of this technology for wireless last-mile connections to public fiber-optic networks. ( www.fcc.gov ) ( www.loeacom.com )
  • The USDA Rural Utilities Service announced winners and amounts for a total of $11.3 million in grants for rural U.S. broadband Internet providers. ( www.rurdev.usda.gov/rd/newsroom/2003/sept03bbandgrants.html )
  • The Fiber To The Home (FTTH) Council and the Telecommunications Industry Association (TIA) released the newest list of "U.S. Optical Fiber Communities". It includes 24 new communities, bringing the total number with residential fiber broadband service to 94. ( www.ftthcouncil.org ) ( www.tiaonline.org )


    Fiber to the Premises - Gaining Momentum

The FTTH Conference 2003 was held earlier this month in New Orleans. Although we weren't there, we've heard about it from attendees, many of whom came away feeling that fiber was gaining momentum. Of course they're all part of the fiber industry and would be expected to feel that way. But we think there's some reality too.

As the cost of fiber-based systems becomes increasingly competitive, telcos and cable operators that have long deployed hybrid fiber and copper systems are increasingly thinking about fiber. As they do so, they're faced with a complex and confusing set of alternatives: point-to-point versus PON; several flavors of standardized PON plus proprietary PON systems; ATM versus Ethernet; whether or not to carry analog video; and whether to carry fiber all the way to the premises, or to combine deep fiber with some flavor of DSL.

Three of the four US RBOCs--Verizon, SBC, and BellSouth--announced in late May that they had agreed on a common technical standard for FTTP, and have been conducting a joint product evaluation initiative based on these specifications. It is far from clear how aggressively they will move forward to deploy FTTP, or whether they will choose FTTP over one or more of the emerging successors to ADSL (see last month's article on these technologies). But many companies in the fiber business believe that at least some of the RBOCS will install FTTP to at least some homes, and then expand the deployment over time.

To gain a better understanding of these issues, we interviewed three participants in these decisions: Corning, Wave7 Optics, and Jackson Energy Authority. These gave us three points of view: the leading fiber provider, an FTTP system provider, and a municipal utility committed to rolling out FTTH.


Corning

Corning pioneered the optical fiber business and has the biggest share of the fiber market, selling both fiber strands and fiber-based cables through two sister divisions. While the fiber business suffered huge contractions from the bursting of the telecom bubble, it is still one of Corning's most important businesses, and Corning continues to invest in the future of "deep fiber".

We visited Corning and met with several people in their fiber business: Bob Whitman (Manager, Global Broadband Market Development); Scott Frederick (Market Development Manager, Broadband); Scott Heather (Market Development); and Michaela Iery (Marketing Communications). Bob told us that his group's focus is on expanding the global fiber market, rather than selling specific products.

We compared notes on the emerging applications for broadband, and agreed that many of these applications require more bandwidth and more symmetry than the current hybrid fiber/copper systems can deliver. As these applications generate demand for more bandwidth and symmetry, telcos and perhaps cable operators will examine fiber to the premises (FTTP) as an alternative for pushing fiber deeper into the hybrid plants.

The key question is one of economics. In the past, the clear advantage of FTTP in "future proofing" the physical infrastructure for decades to come was outweighed by the cost differential compared with hybrid solutions. Bob said that his group believes that the gap has narrowed substantially, and that the argument has swung in favor of fiber. They are preparing models to demonstrate this to the global telephone companies.

We discussed the various types of fiber access topologies. Corning believes that "one size fits all" does not work. Point-to-point fiber provides the most future proofing, since it dedicates a fiber strand to each endpoint; but it is often more expensive than PON, which shares the single strand between 8, 32 or more endpoints. Corning says there are situations where point-to-point can be more economical than PON, but their goal is for fiber to be the choice, regardless of which "flavor" is chosen.

Each form of PON makes sense in some markets. BPON--a form of PON based on ATM--is a requirement for the US RBOCs, but Corning feels that EPON--based on Gigabit Ethernet--will be favored by other incumbent carriers.

We'll continue to talk with Corning as they complete their economic comparisons.


Wave7 Optics

We have reported previously about Wave7 Optics, which has a fiber-based system designed to deliver both Gigabit Ethernet and standard analog video over the same PON infrastructure. At the recent FTTH conference, they announced sales to several new customers, and a new relationship to participate in the BPON business. After the conference, we interviewed Emmanuel Vella (Chief Marketing Officer) by phone to get an update on these announcements and his views of the fiber market.

Emmanuel told us that he was "ecstatic" about the FTTH conference -- both the enthusiasm of the attendees and the reception given to Wave7's announcements.

We asked his views of the FTTX market, and he said that Wave7 Optics sees the market as divided into several distinct segments:

  • Municipalities and power utilities (often municipally-owned utilities)
  • Independent telephone companies
  • RBOCs - the large incumbent US local carriers
  • PTTs - the large former government-owned monopoly carriers, now mostly privatized
  • cable companies

Wave7 has done well in the first two market segments with its Last Mile Link™ product line. At the conference, they announced a contract with the Jackson Energy Authority (JEA) to build a FTTP network passing 31,000 homes and businesses. This project will be delivered over the next 15 months and is worth $15 million for Wave7. See the following interview with JEA.

But the LML product does not fit well with the incumbent telephone carriers, most of which favor FSAN/BPON, an ITU standard developed jointly by 21 of the largest carriers, including all of the RBOCS and most incumbent carriers in Europe and Asia. Wave7 would like to participate in this market, but does not have the resources to develop and market its own product. It instead chose to enter into a "joint relationship" with Hitachi. The result, announced and shown at the FTTH conference, is a Hitachi "triple play" BPON solution incorporating Wave7's video and voice technology and intellectual property.

We asked Emmanuel whether the Hitachi product was just for the US market, and he said it would also be attractive to most other incumbent telcos. "The BPON approach to FTTX is standards-based and well understood, and leverages the large investments all telcos have made in ATM networks."

Wave7's LML product includes standard analog television, and some vendor's BPON products also include analog TV. We asked Emmanuel if this was a requirement for the telcos, and he said many of them "still view video as peripheral to the services they want to offer."

We asked his views on how telcos would compare FTTH with various forms of DSL, and he surprisingly said that DSL could be quite competitive--both on user performance and cost. Some BPON products dedicate a fixed bandwidth--typically 20 Mbps--to each family, while several of the newer DSL approaches could provide more bandwidth. So telcos would have to evaluate specific product implementations of DSL and FTTH to make a judgement.

Finally, we discussed the potential for FTTP in cable systems. The LML product is designed with the same interfaces as cable systems--no surprise since most of the senior people at Wave7 come from the cable industry. It's designed to leverage the headend equipment for video, voice, and data, and supports the standard signaling for today's set-top boxes: "If you're a cable guy, we're a drop-in!"

Emmanuel said that LML was now "very cost competitive" with HFC: "LML costs are about equal to those for a 125 home/node HFC system, and perhaps 15% more in comparison with a 500 home/node system."

Emmanuel expects another significant win with a power utility very soon and believes that the successes that were discussed by participants at the conference will encourage many more to get on the fiber bandwagon.


Jackson Energy Authority

At the FTTH conference, Wave7 Optics announced a contract with the Jackson Energy Authority (JEA) of Jackson, Tennessee. JEA is a public utility providing electric, gas, water, and wastewater services to 38,000 homes and businesses in and around Jackson, in western Tennessee. Wave7 is providing the equipment to build a FTTP network that will "pass" 31,000 homes and businesses and will deliver the "triple play" of voice, video and data services.

We interviewed Kim Kersey (Senior Vice-President of Telecommunications) to learn more about the planned FTTP deployment. We first asked about his background, and found that Kim had been with JEA for two years. He previously worked for Charter Communications and had been responsible for upgrading Charter's cable system in Jackson.

Since Charter already provides cable TV and high-speed data service in Jackson, we asked what kind of market penetration JEA was planning on. He said surveys indicated that Jackson residents were "overwhelmingly in favor" of buying these services from JEA, a local company with a reputation for good service, and customers were looking for one company "to take care of all your needs." JEA is looking for 40% penetration of homes passed.

JEA will pass businesses as well as residential customers, and will use the Wave7 Optics platform to provide symmetric bandwidth as needed at speeds up to 500 Mbps, with service level agreements to assure quality service.

We asked why he had chosen the Wave7 system over other FTTP products, and he said "cable TV is what customers are looking for." He especially liked the Wave7 video approach: "for the others, video was just an afterthought--all customers would have to have set-tops--so the choice was pretty simple." He preferred the Wave7 gateway (the device at the customer home) over the others and found Wave7 "good to work with." Wave7's system will work with off-the-shelf cable set-top boxes and cable headend equipment, while others need special devices.

We asked how JEA will power the gateway for lifeline telephone service, and he said they were using "a new unit that Alpha developed for our gateway (NIU) units. The gateway power supply is an externally hardened unit that is powered from the electric meter outside the home." Since JEA is the power company as well as the communications provider, they will connect the power supply "on our side of the meter."

Finally, Kim said that a lot of municipalities are watching JEA: "A lot more will do this if we are successful."

( www.ftthconference.com ) ( www.corning.com ) ( www.wave7optics.com ) ( www.hitachi.us ) ( www.jaxenergy.com ) ( www.alpha.com )


Digital Dreams Meet Reality -- Creating a Simple Home Network

Dave's brother Leonard and his family recently moved to a row house in Philadelphia. After they got broadband with DSL, Dave made good on his promise to set up a home network for them.

Getting it working proved much more difficult than Dave anticipated. The full story is on our website at Creating a network at Len's house.

Len's wife Veronica with the boxes of equipment Dave installed in their house --> Click for larger pictureIn summary, to set up a simple network with four PCs, Dave spent two days at Len's house plus more time researching how to address the networking issues and resolving the problems he encountered--a total of about 20 hours. He ran into problems getting the exact and correct password for PPPoE, a router failed and need to be replaced, and he wasn't sure about the condition of the replacement router. He spent nearly two hours on the phone with tech support--first with Verizon and then with Linksys--to work through the problems.

Most of Dave's time was spent in getting the router to "talk" correctly with the DSL modem and in finding a suitable wireless bridge. Everything else was straight-forward and took little time. A recent book called Networks in a Flash helped work out a plan of action for the second day.

Dave says there were a lot of "lessons learned" from this experience -- both for our industry and for end users.

For the residential broadband industry:

  • This all has to be a lot simpler. It should not have taken me more than twenty hours to get a simple network working. The more typical user would have given up many hours earlier and returned all the equipment to the retailer. Set-up wizards should work and help more when they don't. The root causes of problems--such as a failure to connect to the internet due to a bad password--should be much more obvious to the user.
  • The "out of box experience" was exemplary for everything except the router. But that's the most complex piece of equipment. If it doesn't work, the customer will return all the equipment to the retailer.
  • I was delighted by the telephone support from Verizon and Linksys. Their tech support people answered very quickly, were very helpful and patient, and followed procedures each had developed based on lots of user calls like mine.
  • There shouldn't be so many equipment variables. Verizon didn't know about the specific Linksys router, and Linksys didn't seem to know about the DSL modem Verizon had installed. That made the procedures more tedious, since both talked me through many steps including power cycles that appeared to be generic rather than specific to the situation.
  • Checking the connection between the router and the modem was not part of the diagnostic procedures. I think the key to finally getting the router working was when I noticed that the lights indicating activity between the router and the modem were not blinking at all. This did not appear to be part of either company's diagnostic procedure, and it should be.
  • Broadband service providers have started offering network installation. Getting home networks working should be a lot easier for them than for end users: many of the variables--the make and model of the broadband modem and its quirks when working with various routers, issues with specific combinations of routers and modems--would be sharply reduced. The question is how many consumers would be willing to pay for this--but supporting users while they do it themselves may well cost more!
  • Wireless bridges are a great way to connect to desktop PCs. All new desktop PCs have Ethernet ports, and it's a lot easier for the end user to connect a bridge to a PC's Ethernet port than to open the PC case to install a wireless PCI card. Once the bridge is installed, it should be simple for consumers to expand them with inexpensive Ethernet switches to connect multiple PCs--or other networked devices--in the same room. However, there are not many consumer-oriented bridges available yet for 11G. There also seemed to be a lack of Web resources,including vendor Web sites, that addressed when and why a situation called for the use of a bridge.
  • I wasted a lot of time on two different days getting the password correct, and that seems crazy in retrospect. Why did I have to know the password? For that matter, why did I have to configure the router with an ID and a password? Verizon had installed the DSL modem - why couldn't they validate the connection through the modem's MAC address rather than imposing this on the end user? (I've had more experience with cable modems, and they don't need any of this complex configuration - you just select "dynamic" settings and everything happens automatically without any ID or password. If someone can explain why DSL/PPPoE requires this, I'm all ears.)
  • Finally, the industry should think about what happens when consumers return network equipment and it is sold to the next customer. My experience indicates that retailers should reset all returned units before they're sold again. Since reset procedures are pretty obscure, networking vendors should document them for retailers and caution them to reset the units if the shrink wrap has been removed. Otherwise, vendors will pay a heavy price in added customer support.

For end users:

  • Before starting, develop a plan of action. "Networks in a Flash" is a good example of the kind of reference that provides a lot of help to create a check list.
  • If you're using PPPoE (which you almost certainly are if you have DSL), make sure you know your user name and password. Both have to be exact or it won't work, and neither the router nor the modem will tell you anything other than "unable to connect" if you get it wrong. NaiF tells you to get the login information from the phone company during installation of the DSL modem; if you're starting later, make sure you have it before you start, and test it with a PC before you connect and configure the router.
  • Power cycle each time you make a change. This may not always be necessary, but it is part of both Verizon and Linksys procedures. It forces each piece of equipment to "forget" what it previously had "learned" about the network configuration.
  • If you're having any trouble connecting, look at the "Internet" and "Ethernet" lights (or whatever they're labelled on your router and modem) to make sure that the router and modem are "talking" to each other.
  • You're taking a big risk if you buy and try to install a piece of network equipment with the shrink-wrap removed.
  • If there's any doubt about the status of the router or the modem, find out what the reset procedure is and do a reset before you configure it. If you run into trouble, do another reset and start again.

( www.verizon.com ) ( www.linksys.com )


Visit Us During CES -- The "Home by Design" Showhouse

If you are planning to attend CES, please stop by and visit us. We're thrilled to be planning and hosting the "connected" aspects of a beautifully designed showhouse that will be in the parking lot of the Stardust hotel during the month of January. Called Home by Design, the house will be open for two big shows--CES and the Builders Show--and several smaller events.

Living room of "Home by Design" showhouse --> Click for larger pictureWe've been talking with the architect, Sarah Susanka, who has written such bestselling "how to" books as “The Not So Big House: A blueprint for the way we really live”. Her approach to “tailoring our houses to fit the way we really live” and "affordable luxury" feels like a great fit with our desire to help consumers reap the true benefits of broadband and networking, in how they play, work and communicate from home.

We intend our "Connected by Design" efforts to show how homeowners can reconcile their digital dreams with real budgets.

If your company has an affordable broadband-related product or service that you'd like to show to an estimated 15,000 people visiting the showhouse, please contact us at mailto:editor@bb-home.com for more information.


Intel's Digital Home: Corporate Initiatives That Work

It's logical, it works and we applaud it. Having watched Intel create various initiatives to grow their market, we're delighted to observe how a corporation rationally addresses the need for market growth. We've seen Intel variously supporting videoconferencing, broadband and wireless. Not all have been as successful as their current Wi-Fi efforts, but each has had its impact.

Intel looks for new opportunities for chips that require lots more horsepower. They find markets where the momentum seems to be heading (e.g., Wi-Fi), identify impediments that are slowing progress, select promising new applications and technologies, and promote standards. They create a plan that pulls in (or joins with) other industry players to overcome the obstacles. They grow the market and position Intel to be a real winner in its growth, with a big budget to associate Intel's name with the winning formula. If the technology they first supported isn't the winner, they get behind the one that will be.

Saying this is a lot easier than making it happen! But in a nutshell, it summarizes what Intel is now busy pursuing through its Digital Home Initiative and its membership in the Digital Home Working Group.

"Mob" at IDF (Intel picture) --> Click for larger pictureAt the recent Intel Developers Forum, Paul Ottellini, Intel's President and COO, said "Convergence has gone mainstream" and is driving up processor gigahertz as well as requiring a collection of additional technologies to deliver new consumer capabilities.

Recently, Gary Matos of Intel helped us set up an interview with Bob Gregory, Director of Initiatives Planning and Advanced Development, who is responsible for Intel's Digital Home. We were also joined by Brian Tucker who spearheads Intel's Digital Home premium content and technology strategy.

Long-time readers of these newsletters will find many familiar themes in our discussion with Intel, since we are wildly in agreement about the opportunities and the problems. These include:

  • Consumer electronics devices and media are moving from analog to digital
  • Many households have PCs and increasingly are networking them to share their broadband connection, printers and files
  • Personal content such as digital pictures and movies are increasingly being created on new digital devices
  • External and professionally-generated content like music and movies are also increasingly digital
  • BUT, when users think about how to share their digital content around their homes, emerging digital and existing analog equipment like TVs and audio systems don't "talk" well to one another--and fixing this is not simple. The logical desire to watch a movie recorded on a DVR on a TV in another room is one of countless examples.
  • If you're Bill Gates and can throw money and technology at the problem, solutions exist; for average people who want it to be affordable and easy to learn and use, lots of work remains to be done.

SMC WMR-AG universal wireless receiver --> Click for larger pictureWe first wrote about Intel's work in addressing this problem a year ago in 'Intel Inside' Means Music and Media Too. Since that time we've seen a number of Digital Media Adapters (DMAs) come to market. These initial units address the problems of sharing photos and music, but most leave out video because of the sticky digital rights management issues and the added bandwidth and QoS video requires. The Linksys Wireless-B Media Adapter) is based on Intel's reference design, while SMC's new Wireless Multimedia Receiver does include video and is based on a different design.

The Digital Home Working Group

Intel is now gathering support to solve this problem through the Digital Home Working Group (DHWG), which started with seventeen leading consumer electronics, computer, and mobile companies. The organization has dedicated itself to a collaborative approach to simplifying sharing of digital content--such as digital music, photos and video--among networked consumer electronics, mobile devices and PCs. When we observed that getting agreement across these diverse constituencies seemed like "herding cats," Bob Gregory admitted that the scope of the task sometimes interfered with his getting a sound night's sleep.

Original DHWG members --> Click for larger pictureThe group's approach to creating an interoperability framework for networked media devices is to use established open industry standards wherever possible in developing their design guidelines. In looking at the initial member companies--Fujitsu, Gateway, HP, Intel, IBM, Kenwood, Lenovo, Matsushita Electric (Panasonic), Microsoft, NEC CustomTechnica, Nokia, Philips, Samsung, Sharp, Sony, STMicroelectronics and Thomson--we observed that no broadband service providers are included at this time. Bob pointed out that because of the breadth of the problem, DHWG is taking a stepwise approach in which getting device interoperability is the first step. They are, for example, not yet including telephony as part of the scope (although it will be later). There are now over 30 new contributor members with more being added.

For devices to transparently collaborate on a service for the user, DHWG has defined an interoperability framework to allow the devices "to communicate with each other and exchange meaningful information." To quote from the DHWG's white paper, the framework includes:

  • Transparent connectivity between devices inside the digital home
  • Unified framework for device discovery, configuration and control
  • Interoperable media formats and streaming protocols
  • Interoperable media management and control framework
  • Compatible quality of service mechanisms
  • Compatible authentication and authorization mechanisms for users and devices.

The scope also includes methods for content owners to protect their digital content, and manageability and support for digital home devices.

What should we expect to see next? The success of the DHWG initiative depends in large part on educating consumers about some of the new devices and what they make possible--and then getting them to buy and use them. It is difficult for one or a few small companies to make this happen--witness the slow initial take-up for PVRs. But with the combined product and marketing push of companies such as Panasonic, Sony, Samsung, H-P and Gateway, we expect DMA-like devices to be increasingly visible. That should ratchet up the attention being given to products such as those available today from companies like Linksys and SMC and increase awareness and market acceptance for the coming generations of consumer devices.

Protecting Content with DTCP-IP

Professionally-generated content like movies is perhaps more important than user-generated content. After watching the troubles of the music industry, video content owners have been reluctant to provide high-quality content in digital formats; for content owners to support networked digital video, content protection is critical. The success of the digital home requires addressing these complex issues, and Brian Tucker is actively pursuing how to make this happen. To aid this process, Intel announced the first release of DTCP-IP (digital transmission content protection over internet protocol) at the Intel Developer Forum. Its goal is to allow users to get high-value content and move it around the home and play it on multiple devices, while still protecting the content owner's property.

The DTCP-IP spec is a copy protection method for copyrighted content transferred across digital interfaces. It provides link layer protection and moves the original "5C's" spec announced in Sept 98 into the IP world. 5C's refers to the group of companies--Hitachi, Intel, Matsushita, Sony and Toshiba--which created an independent licensing authority to license DTCP to interested businesses.

Brian indicated that Intel is working with content aggregators and consumer electronics manufacturers to develop an SDK to support DTCP-IP. At IDF, Intel (in collaboration with Warner Brothers) demonstrated the protocol embedded in a Linksys media adapter, allowing content from Movielink to be shown on a connected TV, not just on a PC.

DHWG guidelines 1.0 are expected out in the first half of 2004. Intel expects that products will come to market in compliance with these guidelines in the second half of next year.

UPnP AV2

In another concrete step, the new generation of DMAs is supporting UPnP as a baseline middleware element. Intel is now working on an extension called AV2, which sets up a profile for an A/V device so that it is exploited to its fullest. Products with AV2 embedded are expected in the first half of 2004.

Bridging the analog and digital worlds

One of the elements we didn't hear addressed was the real-world problem of bridging the analog and digital worlds. Our home is filled with analog audio and video equipment, with several types of cabling (coax and speaker wire) used to move the analog video and audio signals from room to room. These new digital media adapters are fine for taking signals that originate in digital format, but they don't handle ones in analog format. We've expected for some time to see consumer products that convert originating analog signals to digital form, carry them over CAT5 cabling with Ethernet or 1394b, and convert them back to analog at the terminating location. GE Smart showed prototypes of UPnP-based devices that did this nearly two years ago; too bad they haven't reached the market yet.

We've been pleased to watch Intel's push to encourage digital media adapters. Now we're hopeful that DHWG will make good progress on the complex problems they are addressing. We encourage them to include broadband service providers as soon as possible--and also to help ease the transition from analog to digital media.

( www.intel.com ) ( www.dhwg.org ) ( www.dtcp.com )


Broadband Central -- More on Wi-Fi for Wireless Broadband Access

Earlier this year, we started receiving press releases about a company called Broadband Central, which is deploying a Wi-Fi system for fixed broadband wireless access. We've written before about wireless broadband access (see "Broadband Anywhere: The Extended Broadband Home") and about using Wi-Fi (802.11) for this purpose (see "Afitel - Wi-Fi in Zamora").

We are very bullish about the future of broadband wireless, especially as technologies for mobile wireless broadband are deployed. While Wi-Fi is great for local area networking, we think it's questionable for broadband access. So we were intrigued by Broadband Central's claims that it was moving rapidly to deploy "proprietary wireless technology" to create "Blue Zones" providing "wireless high speed internet at the price of dial-up" and had now "doubled the size of its planned Blue Zone deployment to 22 states."

When we looked at the Broadband Central web site, we found some "facts" that seemed very questionable. Their "High Speed Access" page describes Broadband Central's "Basic" service with a speed of "128K up/down" as being "10 times faster" than dial-up. Their "Broadband Comparison Chart" describes "cable modem" as "symetrical" with a speed of "128Kbps - 768Kbps" while "wireless" is described as having a speed of "256Kbps - 11Mbps". These comparisons, which imply that Wi-Fi based broadband access is faster than cable modems, made us skeptical of all Broadband Central's claims.

We contacted their press representatives, mentioned our concerns about their website, and tried to set up an interview. Some time went by before we finally managed to talk earlier this month with Bart Saxey (their new President, who joined in July) and Randy Conklin (Director of Network Operations and co-founder). We were somewhat reassured by the interview, but still have serious doubts about this venture.

When we questioned their claims of range and speed, Randy told us that their proprietary technology was based on a "patented circular-polarized antenna developed by Virginia Tech" to which they had the "exclusive rights." Randy said this design reduces multipath distortion and permits better range and data rates than conventional design. They use multiple antennas within a cell location. Their base station (they call it a Control Access Unit or CAU) is typically mounted on top of a home in the served area, and is typically 45 to 50 feet above ground level. CAUs are sited to create half-mile-radius cells.

Their site also states that "Broadband Central’s Blue Zone focuses on QoS (Quality of Service) insuring that each subscriber gets the amount of bandwidth they have ordered". QoS is indeed an important characteristic and we asked how they could support it over 802.11b. We didn't really learn the answer, however.

We discussed backhaul from the CAUs, and were told that they have a T-1 line connected to each - "we currently have 200 live T-1s" in the Greater Salt Lake area. They said they were working on wireless backhaul to reduce the cost, and would create wireless "red zones" to interconnect the blue zones, again using unlicensed spectrum.

The customer site uses CPE of Broadband Central's design. This integrates the antenna and electronics in a single unit; it is mounted outside the home and pointed to the nearest CAU.

Broadband Central charges a $150 installation fee, which includes the equipment, installation and the first month's cost. After that, users pay from $19.95/month for 128 Kbps symmetrical service to $59.95/month for 1 Mbps.

We asked a lot of questions about the underlying economics of their business. They said their Blue Zones are based on a partnership model "similar to an REIT or an oil partnership -- it's a financial relationship with accredited investors who get a share of the net income."

But they were unwilling to disclose any of their costs, the number of cell sites, or the number of subscribers: "We'll disclose the number of subscribers when we're number one." They said that each installation cost them $40 in labor, which seems low compared to other estimates of "truck rolls." They get six installs in eight hours, which includes pulling CAT5 through the wall.

So we found it hard to form a judgment on Broadband Central and their technology. They were unwilling to discuss the business economics, and did not provide enough information to convince us that their technology could overcome the issues we raised in using Wi-Fi for broadband access. What we heard seemed plausible, but we'll remain skeptical until we get answers to the hard questions.

( www.broadbandcentral.us )


Broadband Home Labs -- Smart Display re-visited

Back in July, we wrote about our experiences in using a ViewSonic airPanel V110 - one of the new wireless networking devices based on Microsoft's "Windows-powered Smart Display" technology. At the time we said: "We found that it wasn't second nature to think of using the Smart Display (SD)--we would start for the PC first. In a way, this is like the early days of the Web (and online services before that): we'd always go look for a paper catalog or try to call on the telephone, rather than looking online." Our bottom-line assessment then was that SDs are over the bar for usability "but we're not ready to run out to buy one for ourselves."

V110 Smart Display in our kitchen --> Click for larger pictureAn interesting thing happened after Microsoft forgot to re-claim the unit for several months. In late August, the unit failed (the battery wouldn't hold a charge), and we suddenly discovered that we missed it! We'd be sitting at lunch or dinner, or out on the deck, wanted to find some information online, and then remember that the SD was not working. Without realizing it, we had integrated the SD into our routines and behavior.

Dave using Smart Display in our wine cellar --> Click for larger pictureWhen we got back from speaking at the Broadband World conference in London, Dave called ViewSonic support and in a short time had learned the magic secret to bringing the battery back to life. And we immediately put it to use again.

Then alas, the other shoe dropped and Microsoft's PR agency remembered to re-claim the unit. And so the SD has left our house, but not without an attempt to strike a deal on buying it.

The moral of the story is that technologies--like PVRs and SDs--that call on people to change their behaviors need some time to catch on. They have to get into the hands of early adopters who learn how to use them, and then start building by word of mouth and other means until they finally reach "the tipping point".


Your Voice -- Readers' Comments

Bluetooth

When we visited the UK last month, we found about the same amount of Bluetooth equipment as Wi-Fi on computer store shelves. This is very different from the States, where there's almost no Bluetooth and lots more Wi-Fi choices and brands.

Russell Haggar wrote from the UK: "Bluetooth was always going to be a winner, as it was guaranteed to get designed into European GSM handsets - its killer app was the wireless headset. Over the past 5 years, 802.11 and Bluetooth have diversified massively, using their core installed bases as a critical mass upon which to pin their new market and application areas: Bluetooth has found traction in the PC peripheral markets (wireless keyboards and printers) and in the PDA market (GSM handset has GPRS connectivity over the GSM network and Bluetooth connectivity to the PDA, thus acting as a wirefree data modem for the PDA). ... Almost every business user of GSM has a Bluetooth-capable handset, and a huge chunk of the domestic user base as well. Handset churn rates probably average about 12 months at present, so it hasn't taken long for Bluetooth to achieve this position. ...

Why is this different from the States? Probably a reflection on the relative maturity of the European 2G handset market compared to the US ... Other factors might include less FUD from the 802.11 camp in Europe, even though the two technologies are complementary rather than competitive. The relative cost probably has played a part - it costs less than $5 to build Bluetooth connectivity into anything, so its ubiquity will be achieved far sooner than 802.11."

ETSI broadband wired network standards

Paul Reid from ETSI in France wrote to let us know about a "newly-published brochure which summarizes work being done by the European Telecommunications Standards Institute (ETSI) on broadband wired network standards. It also relates the work to the European Commission's eEurope initiative." The "News & brochures" section of the eEurope Standards site has this brochure and others in the same series.


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