As television technology analysts at CableLabs, the cable industry’s research and development organization, put the finishing touches on the organization’s long-awaited “CableHome” home networking specification, some industry observers are wondering what objective the new technology will fulfill.
Just as Internet industry captains have sometimes quarreled over whether their communications infrastructure’s raison d’etre is the delivery of entertainment content or the dissemination of business information, home networking technology developers are afflicted by a similar uncertainty. The troubling question facing the industry is whether a sufficient mass of consumers will pay to watch video on multiple devices throughout the home when some are content to watch the boob tube from their perches of habit.
That cultural reality has prompted home networking technology pioneers to dream up novel applications for their video-sharing platforms. In recent months, there has been as much buzz circulating about “security,” “energy management” and “home monitoring” uses for home networking as the idea of being able to watch television on a wireless appliance in the privacy of a seldom-used basement or patio.
Mike Goodman, senior analyst at The Yankee Group, believes the home networking business is still groping for its identity. “[The precise goal of home networking] is really not an answered question at this point,” Mr. Goodman said. “You’re really in the embryonic stage at this point. The best we can do is hypothetically test the idea behind the business model and the consumer demand. There are opportunities for home networking. You can generate revenue from security. You can generate revenue from monitoring. The hope is that down the road the added costs will create added revenue opportunities. The cable guys are not going to roll these out unless there’s profit attached to it.”
Nevertheless, CableLabs is surging ahead on the draft of its CableHome specification. Having released its home-networking quality of service specification in July, the organization is planning to complete by early next year additional draft specifications that will address network management and security. Bernd Lutz, director of the CableHome initiative, said that home networking will enable cable operators to branch into business lines distinct from their traditional trades of video and voice media transport.
“This infrastructure will allow the cable operator to deliver services to the home,” Mr. Lutz said. “For instance, they could make a deal with Enron to delivery home energy management to home.”
Mr. Lutz also envisioned that power utilities could capitalize on home networking advances. Power companies could offer consumers cash incentives to grant the utilities permission to control their thermostats via a remote facility. Such an arrangement would help power providers optimize energy efficiency, Mr. Lutz said.
In finalizing the CableHome specification, CableLabs is grappling with the questions, “Should we secure [the home network] in the first place? And what protocol [should] we use?” Mr. Lutz said. Because the scope of the spec will be limited to the topics of quality of service, security and network management, CableHome will be separate from existing home-networking protocols HomeRF, 802.11 and Bluetooth that did not focus on those issues, Mr. Lutz said. “We are building on top of those standards,” he said. “We are agnostic to those. We are starting at layer three.”
At Comcast, Mr. Craddock oversees the operator’s strategy for such emerging cable technologies as voice over Internet protocol and video telephony in addition to his duties in the home networking arena. On the other hand, the multiple system operator’s confidence that widely tested advanced services, including video-on-demand and personal video recording, are ready for prime time is reflected in the fact that Mr. Craddock has now passed responsibility for those areas over to the MSO’s traditional media division.
Among the ideas brewing in Comcast’s technology development pot is a home networking service for Comcast customers that, like its standard television channel lineups, would bear Comcast’s brand name. “We’re one of the leading MSOs that are sponsoring [CableHome],” Mr. Craddock said.