Cable Sees Home-Network Gains

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Cable is in a great position to reap revenue from home networking, but only if the industry doesn't clash with other technology factions over how such networks should operate, a Consumer Electronics Association representative said here last week.

Cable's home-networking opportunities are tremendous "because of the immense bandwidth that's there ? and MSOs are the critical piece in that market," said Bill Rose, chairman of CEA's home-networking committee, at Kagan Seminars Inc.'s Digital Household Summit. "They're the video-delivery medium everyone expects to get from a home network."

According to a new study, 2.2 million U.S. households could be using home networks by year's end, spending $1.1 billion on them and attendant services. By 2010, those figures could be 29.5 million households and $7.3 billion in revenue, with a hefty share going to cable, Rose said.

But if different factions attempt different home-network construction and operation strategies, "no one wins," he said. "If we figure out how to share this market, we'll all win."

One Rose scenario: CE companies tackle the hardware and infrastructure, while MSOs sell content and services in harmony with application developers.

Comcast Corp.'s cable unit — which has conducted home-networking field trials since early 2002 — seems to agree.

"We're not looking at selling smart-home [hardware] to people. We'd rather sell them smart services," senior vice president of new media development Steve Craddock said. "In order to cross the chasm to mass-market adoption of home networks, we must sell services and solutions to people. Those services must operate under a common framework: Interface with provisioning, high performance and service quality; be secure, interoperable and upgradable — and be so dirt simple," he added.

Craddock predicted it would take two years for home-networking standards to be adopted. "But you'll see a lot of working stuff before then."

Earlier, CEA senior industry analyst Sean Wargo estimated that 4 million households would buy digital TV sets this year, with at least twice as many doing so in 2003.

Many of those sets will be high-definition TV-capable.

"The rumors of people not transitioning to digital are greatly exaggerated," he said.

Look for MSOs to step up their presence in consumer electronics chains and retailers like Wal-Mart over the next few years, to sell digital, HDTV and on-demand services, said Dwight Sakuma, retail director at Motorola's broadband division.

"They realize they must be in the same point of sale as DBS," he explained.

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