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Home Networks and Home Automation

The amount of money spent by consumers on home networks and home automation in 1999 was probably only exceeded by the amount spent on ink and paper used in reporting on the potential growth in home networking and home automation in 1999.

Walter S. Mossberg, who started writing a personal technology column for the Wall Street Journal in 1991 when PCs were just beginning to use 3.5-inch floppy disks, had the industry tagged pretty well when he wrote, in May 1999, "Whenever the computer industry introduces a supposedly simple, purportedly must-have product, smart consumers should grow suspicious. This is an industry with a great hype machine but almost no clue about what mainstream users consider simple and what they really need. So skepticism is in order when considering the industry's latest 'hot' product: home networking systems." Two and a half years later, in October 2001, Mossberg wrote a much longer feature piece, an update on the "dramatic progress in personal technology," which he ended with the following warning: "While the PC has gotten easier, newer technologies, such as wireless home networking, are as depressingly complicated as computers once were." But this hasn't stopped new-home builders, hoping to differentiate their product, from developing and launching plans to install home networks in all the new homes they build in the next few years. The tough question for home builders and developers is, if they build it, will they come?

Projections for this market are all over the place. Market analysts at Cahners In-Stat say that more than 20 million homes in the United States have more than one PC. Allied Business Intelligence, another market research organization, says that by 2004, nearly 33% of U.S. households will have more than one computer. In January 2000, the research firm Strategic Analytics published a market study suggesting that consumers are lukewarm to home networking. Three months later, Cahners In-Stat, published its own market study in which it said that 2000 would be a big year for home networking. "Without a doubt," Cahners said, "this market will be extremely dynamic throughout 2000 as new products come to market and channel strategies are ironed out." Meanwhile, a survey by the Consumer Electronics Association (CEA), which has invested millions of dollars over the past two decades in home networking industry promotion and standards, indicated that most of these systems will not become commonplace in American homes. Most are too expensive for "average" consumers to comfortably afford and are typically best installed while a home is under construction, which immediately limits the market's growth. The trade association does, however, say that it sees a "groundswell of interest" in new home networking systems, with more than half of the consumers it surveyed expressing an interest in spending $5,000 for a network-enabling wiring system for a new home.

This is after years of developing and promoting a technical standard called the CEBus. According to the Consumer Electronics Association's CEBus Industry homepage, when traditional home electronic products are outfitted with "Home Plug & Play" network features, they can work together to offer a new generation of functionality. Some examples of the hype:

  • Consumers could save on utility costs by having their homes automatically respond to variable time-of-day pricing by utility companies.

  • Security systems could display a home's floor plan on a bedroom TV to troubleshoot problems as they happen.

  • Household appliances could offer self-diagnostic options that notify when maintenance is due . . . and call to schedule a repairman's visit if so desired.

  • Multitasking home PCs could monitor conversations between other household products and let the home's residents tell products what they want done.

  • Household clocks could always keep the right time, even after power outages.

  • Security system occupancy sensors could let the home's lighting and temperature control equipment know when the home or individual rooms are occupied.

Almost defensively, the CEBus Web asks: Haven't we heard this type of NEWS before?

Their answer is that "Prior announcements concerning standards and specifications for network products in homes differ significantly from the CEBus Industry Council's Home Plug & Play Specification. Prior standardization efforts asked manufacturers to adopt a message transportation method to get an application language (i.e., to get an appliance language, producers had to first select which horse was to carry the message)."

In January 2002, the Consumer Electronics Association announced that the Home Automation & Networking Association (HANA) had merged into the CEA, creating a new Home Automation & Networking (HAN) division for HANA's 500 members, including manufacturers and installers.

Of course, PCs are just a jumping-off point. Anyone can network his home entertainment system (including interactive TVs and DVDs), home control system, and security system and link them to the Internet. Several homebuilders have developed an assortment of technology packages, from a basic wiring foundation to an "ultimate" networking system. According to the National Association of Home Builders, 34% of builders now offer so-called structured wiring packages as standard or optional amenities.

Every house now built in Las Vegas by Pulte Corp., the nation's largest homebuilder, includes a structured wiring system—one that basically lays a foundation for high-speed networking among a variety of devices within a home—with dual data/telephone cabling and dual RG-6 coaxial cabling run to every room jack. To accommodate home entertainment centers, family rooms feature as an option a special faceplate for four coaxial outlets and two RF-45 jacks. The larger faceplate is for video distribution, including closed-circuit TV. Empty plastic conduit installed from a point outside the home to each bedroom, home office area, and family room ensures the home can support any new technology. New cabling can be fished through the conduit if necessary.

Builders, developers, and new-home buyers in New Jersey can also now purchase in-home broadband networking from Verizon Wireless that will enable consumers to take advantage of the broadband Internet connections that are increasingly available.

But are homeowners really up to the task of installing a home network, particularly one that calls for integrating a PC with home control, security, and entertainment systems? In fact, are retailers able, or even willing, to take on the job of becoming facilities managers for home systems? Given some of the technical issues consumers and retailer/installers face, this is going to be a tough market to pitch.

One of the biggest hurdles in selling home networks has been the lack of a standard network protocol, which would allow a home system made up of components and devices from different manufacturers (sort of like a stereo system) to communicate with each other. Which means that several standards are currently in play and few, if any, of them interoperate.

In January 2001, the Consumer Electronics Association demonstrated its Versatile Home Network (VHN), which, for the technically inclined, operates at 400 megabits per second (400 Mb/s). At the same time, Silicon Image introduced its Digital Visual Interface (DVI), which can transmit at 5 gigabits per second (5 Gb/s). DVI has received high marks from several industry companies, including Universal Studios, Fox, and Warner Bros.

Most PC networks use one of two connectivity standards developed by competing consortia—HomeRF, a wireless system, or the HomePNA Phoneline Networking Alliance, which uses a home's existing telephone wiring. Both groups have developed protocols, or technical standards. More than 150 HomePNA-compliant networking products were on the market at the end of 2001; about 20 products were compliant with the HomeRF Shared Wireless Access Protocol (SWAP). A third home network that is moving into the marketplace uses the power line, but it is much slower than the other systems and only a few of these are available today. (Hoping to create a common power-line protocol, the Consumer Electronics Association formed what it calls the R7 Home Networking Committee, but several companies are not onboard. Shortly after the R7 was created, the HomePlug Powerline Alliance was launched by 3Com, Intel, Panasonic, Radio Shack, and others, to develop their own set of standards.)

HomeRF, with several heavyweight companies behind it, including IBM, Motorola, Compaq, Intel, Siemens, and Proxim, got a huge break in August 2001 when the FCC allowed the HomeRF Working Group to increase the transmission speed of SWAP to 10 Mbp/s, a fivefold increase in HomeRF bandwidth. The rule change, originally proposed by the HomeRF WG and its member companies, looked like it had significant implications for the growth of the home networking market. With this development, HomeRF WG member companies were now free to deliver a variety of new products supporting data speeds comparable to those of corporate wireless networks. With HomeRF running at 10 Mbp/s, consumers could now download Internet audio formats, including MP3, without interrupting other network activity. Dolby Labs said the FCC ruling would open up a new class of audio products that would include wireless surround speakers, high-quality networked digital jukeboxes, and Internet radios. The change also added new support for audio and video streaming and expanded the voice capabilities with support of up to eight cordless handsets.

Forget about it. HomeRF is already being overrun by another wireless network known as IEEE 802.11b, although another system—802.11a—is likely to give the "b" version a run for its money simply because it operates at a higher data rate. Developed primarily for use in offices and factories, 802.11 is gaining market ground on HomeRF fast enough that it could become the predominant in-home wireless system over the next few years.

How did this happen? For one thing, 802.11 network card prices have dropped tremendously—to within a few dollars of HomeRF adapters. The 802.11 technology is also being marketed much more aggressively than HomeRF, and it is increasingly being embedded into a variety of devices, such as laptop computers and wireless devices designed for the home, not simply designed to be plugged into them.

The cable industry also has a stake in home networking through CableLabs, cable operators' research and development consortium. More than a dozen companies, most of them the same companies that joined HomeRF, have signed on to this initiative, called CableHome. Each of them has agreed to work with a royalty-free pool. CableHome starts with the proposition that, if you choose to use home networking equipment approved by your cable operator, the operator will guarantee that it will work seamlessly with your broadband cable services delivered over cable.

Then there's Bluetooth, the short-range wireless system originally developed as a cable replacement between portable devices and fixed, wall-mounted access points. Bluetooth proponents see a huge opportunity in home networking in point-to-point and point-to-multipoint connections with several "piconets" linked together to allow continually flexible connections between portable devices and desktop PCs.

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