Time Warner Cable Takes Networking to Consumers

By JEFF BAUMGARTNER -- Multichannel News, 8/7/2000

Taking baby steps into the relatively nascent world of consumer-based home networking, Time Warner Cable has teamed up with SOHOware Inc. to offer Road Runner subscribers in Austin and San Antonio, Texas, the ability to link up as many as four computers via wireline or wireless home-networking platforms.

The option will cost those customers an additional fee. Road Runner subscribers who want to share high-speed Internet connections among their PCs will be charged $19.95 per month on top of their normal high-speed subscription fee, which typically runs about $40.

Additionally, those customers are required to buy SOHOware's "Broadband Internet Gateway," a PC-networking device that

carries a retail price of $199.99. Through partnerships with Road Runner and local CompUSA stores, SOHOware's gateway unit can be purchased for $99.99 after rebates.

To prod the effort, Time Warner and SOHOware have installed Road Runner drops in two CompUSA stores in Austin and set up live, hands-on demonstrations there for bandwidth-hungry customers.

"San Antonio doesn't have the demo yet, but we're working on it. We've seen tremendous traffic in the Austin stores," SOHO-ware vice president of marketing Andy Chang said, adding that one store in Austin is selling in the range of 30 to 40 BIGs per week.

Until the retail side of the equation is settled in San Antonio, Time Warner will market its home-networking option to Road Runner customers via the Web, Chang said.

In addition to providing Time Warner with an opportunity to upsell existing Road Runner customers, the PC-networking option is also being dangled as a customer-acquisition carrot.

"We had 40 to 50 calls during the first weekend" Time Warner offered the home-networking product, said Steve Farabee, director of digital online services at Time Warner Cable Austin. "We hope to attract not only current customers with multiple computers, but also to gain some new Road Runner customers with this product."

Farabee added that Time Warner has received "several" orders for the home-networking service so far, but declined to provide specific numbers.

In addition to supporting a "10Base-T" interface for wired networking, SOHO-ware's BIG also furnishes 2-megabit-per-second wireless connections via its "CABLEfree" solution, which is based on the Institute of Electrical and Electronics Engineers' 802.11 standard.

While those technology terms could potentially scare off novice PC users, Time Warner is providing a toll-free number to help customers navigate any rough patches, Farabee said.

In addition to its partnership with Time Warner, SOHOware also cut a deal earlier this year with Media-One Group Inc. (now part of AT & T Broadband) to sell home-networking equipment to high-speed-data customers through electronic-commerce channels.

Chang noted that the current home-networking-sales model could change eventually as the equipment and service grows in popularity.

"As we expand the model further, some MSOs will offer the BIG for free," he said. "Not only does BIG provide a platform for home networking, but it also saves MSOs equipment costs and generates recurring revenue."

SOHOware's BIG-which houses a four-port Ethernet hub for PC networking and network-address translation to shield home networks from hackers-is considered a precursor to an even more powerful breed of "residential gateways" that are being developed by set-top and cable-modem vendors.

In addition to sharing bandwidth among PCs, those devices will essentially serve as the brains of future smart homes, enabling a host of voice, video and data applications. When combined with home-networking platforms, residential gateways will eventually distribute bandwidth to all classes of consumer-electronics devices, including televisions, cellular phones, personal digital assistants and Web pads.

The market for residential-gateway equipment is expected to explode in the not-so-distant future. Research firm Allied Business Intelligence Inc. forecast that global residential-equipment revenues alone could skyrocket from $298 million this year to almost $5 billion in 2005.

Those wares will work hand-in-hand with a plethora of wired and wireless home-networking platforms, including HomePNA (Home Phoneline Networking Alliance), Bluetooth and 802.11, among others.

Cable Television Laboratories Inc. is well on its way toward defining standards on that front for the cable industry.

Earlier this year, CableLabs launched the next phase of its In-Home Networking project, calling on cable operators to collaborate with equipment vendors on home-networking-product and service specifications.