Tapping into Home Networking

Posted: 02/1999

Tapping into Home Networking
By Dan Sweeney

With telephones’, televisions’ and, now, personal computers’–when they come to
life–changing innovations, sometimes "one of each" just isn’t enough. With more
and more households installing multiple personal computers (PCs), consumers are looking to
connect and share at-home computing resources. And the way they will do it–through
phone-line home networking–means opportunity for telcos looking to mine the gold in plain
old copper wire as well as more advanced services.

Home networking tools–the hottest home innovation since the universal TV remote–are
set to take the spotlight in 1999. When they do, they will bring telephony to center stage
and introduce consumers to new levels of convenience, flexibility and fun from the PCs
they rely on today.

PC Evolution

Like the phone and TV before them, PCs quickly have evolved from amusement to
necessity–something we can’t do without even if we have to fight for access. As the array
of interactive websites and useful PC applications has grown, so has demand. Today, the
coveted family PC is often the prize in a nightly tug-of-war, as kids vie with adults for
computer time and online connections.

Image: Home Networking

Clearly, one PC isn’t enough for a growing number of households. So, with prices
down–less than $1,000 for a potent computing package–many families are upgrading and
passing the hand-me-downs to the kids. Others simply are adding second or third PCs to
their spare bedrooms, family rooms and even kitchens. The result: a veritable PC
population boom.

According to research conducted by San Jose, Calif.-based Dataquest, approximately 14
million U.S. homes had more than one PC at the end of 1997. In 1998 alone, some 4 million
households joined the ranks of multi-PC abodes. Dataquest predicts that in 2003, 28
million households will have at least two PCs in residence.

The multi-PC trend cuts across tech-awareness levels, incomes and applications. In a
survey conducted by Intel Corp., Santa Clara, Calif., the majority of multi-PC homes
boasted only modest PC knowledge. Annual incomes ranged between $20,000 and more than
$100,000. And uses ran the gamut from work applications, Internet surfing, e-mail and home
finance to online games and learning applications.

Pastime Pitfalls

Although the proliferation of PCs enables more people to work and play at the computer,
members of most multi-PC households still have to duke it out for key resources, including
printers, scanners, CD-ROM drives, high-speed modems and Internet access.

To reduce competition, some people buy more peripherals, set up extra Internet accounts
and add phone lines. Others sprint between PCs, floppy disks in hand, in search of a
printer connection–or they wait for the Internet-linked PC to become available. A
hard-core handful of families install traditional networks so everyone can access
resources from any computer in the house. However most homes lack dedicated high-speed
network wiring, and their inhabitants are reluctant to string new wires in their homes.

The Ideal Home Network Infrastructure

Graph: Most Attractive Home Networking Product Advantages

For the multi-PC household in search of a simpler solution, help is on the horizon. As
it happens, the telephone wiring already installed in most homes is an excellent
medium–economical, accessible, fast and easy to use–for networking PCs. Research
conducted by Intel Corp. reveals that the average multi-PC household already has four or
five telephone jacks, most in close proximity to PCs. As a result, many people wouldn’t
have to drill a single hole or run any wire to create a home PC network over ordinary
telephone lines.

Most important, home networking won’t interrupt the way people use telephone service.
Tapping the unused frequencies of ordinary copper phone wire or new products such as
digital subscriber line (DSL), phone-line home networking simply will add
value–transparently–to an essential connection virtually every home already enjoys.

Many of the PC networking products soon to be introduced for homes and apartments were
created with telephony in mind. Such products will enable consumers to enjoy all the
benefits of high-powered networking from the comfort of their home PCs. Over regular
telephone wiring, people will be able to access the best peripherals in the house without
the traditional floppy-disk foot race. The home network also will enable multiple PCs to
go online using the same Internet account, so Mom can check stock prices while son
researches a project at the NASA website. Or Dad and daughter can enjoy an online game of
Quake from different PCs.

The behind-the-scenes benefits of home networking are equally compelling. Consumers
will be able to make the most of their investments in computing equipment, Internet access
and telephone service, whether they’re using DSL or copper wire.

Opportunity for Telcos

For the telco with an eye for opportunity, home networking offers the chance to make
telephone service an even more important contributor to the average home’s connectivity.
In addition to boosting telephone usage, the home network makes a second line, DSL or a
cable modem well worth the investment.

Even smaller telcos not equipped to offer DSL can benefit. With only one phone line,
their customers will be able to print, share files and play multiplayer games from
multiple PCs over the home network while they talk on the phone or access the Internet.
And over two regular telephone lines, customers will be able to print, share and play
while talking on the phone and accessing the Internet.

By keeping telephony at the center of home life, phone-line home networking offers
short- and long-term benefits to telcos. Among other things, it:

• Increases the value of telephony by giving consumers more capability from their
  telephone connection;
• Boosts usage of telco networks;
• Increases demand for DSL;
• Gives telcos not providing DSL the chance to offer customers simultaneous phone/Internet
  connections by providing second phone lines; and
• Presents opportunity for related promotions (e.g., line or phone-jack installation).

How can telcos seize the opportunity? In the short term, simply by preparing for
consumer demand and training sales staff to recognize home-networking needs. And, as the
home-networking phenomenon spawns increasingly sophisticated products and applications,
telcos will have the chance to help shape the fully networked home of the future.

Shaping the Home of the Future

The home networking trend has developed enough momentum to attract the interest and
participation of powerful players across related industries, including equipment
manufacturers, telecommunications companies and providers of wireless services.

In June 1998, 11 organizations, led by Intel, formed the Home Phoneline Networking
Alliance (Home PNA). The group’s goal is to establish an open specification for phone-line
home networking, ensuring that products are consumer-friendly, compatible and in step with
telephone services, including emerging broadband capabilities.

Work underway by these organizations will help make phone-line networking an essential
component in the high-tech home of the not-so-distant future. Supported by
voice-recognition software, broadband transmission and other advanced capabilities,
networked PCs around the house will be able to operate the home security system, access
the Internet on command, provide room-to-room intercom service, send information to
wireless devices and more.

Much of the infrastructure required for this sci-fi scenario already is in place,
courtesy of the telephone. The rest is largely a matter of market insight, technical
know-how and creative collaboration across the industries looking to take innovation off
the drawing board and into the home.

Dan Sweeney is the Aloha, Ore., business unit manager for the Home Networking
Operation at Intel Corp, Santa Clara, Calif. He can be reached at [email protected].