Home Networking Comes Into Focus

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For the better part of a decade, consumer-electronics
manufacturers have been pushing the concept of intelligent in-home networks that would
link various electronic devices and appliances.

Although past attempts in an analog environment failed, the
industry is trying again, this time with proposed specifications for a digital-network

In at least some of the potential scenarios, the digital
set-top box will serve as the gateway for digitized information coming into the home
before it is routed from device to device.

In March, a group of eight Japanese and European
consumer-electronics manufacturers announced a preliminary agreement on what they termed
"draft specifications" for an open standard for networking consumer digital
audio/video devices.

The eight manufacturers -- Grundig AG, Hitachi Corp.,
Matsushita Consumer Electronics, Philips Consumer Electronics Co., Sharp Electronics
Corp., Sony Electronics Inc., Thomson Consumer Electronics and Toshiba America Consumer
Products -- said they expect to present a complete set of specifications to be released by
this summer.

If that schedule holds -- and there is a healthy degree of
skepticism among some equipment-makers -- digital set-top boxes, TV receivers, recorders
and DVD (digital versatile disc) players incorporating the specifications could be shipped
by mid-1999.

The specifications will allow digital audio and video
devices from different manufacturers to be "interconnected and interoperated in an
integrated home-network system," according to the joint announcement.

In practice, devices incorporating the specifications will
be able to route digital information -- audio, video and computer data -- seamlessly
throughout the home.

Those devices will have enough intelligence to recognize
each other and to make use of new applications built into new devices as they are added to
the network.

Consumers will also be able to control those devices
through a central-control unit, such as a set-top box, a TV receiver, or a stand-alone

Although the announcement was limited to
consumer-electronics products and manufacturers, sources familiar with the group's
plans said they expect the eight companies to bring other industry groups into the
standards-setting process before the final specifications are released.

On an informal level, at least, those discussions have
already begun with cable-TV-equipment makers, in particular.

At a minimum, the digital audio/video-networking specs will
be designed to encompass personal computers, digital set-top boxes and, eventually, other
digital appliances, manufacturers said.

Among the other groups expected to be brought in: the Home
RF Working Group, which is developing a set of specifications for wireless links between
personal computers, communication devices and other consumer-electronics products; and the
European Digital Video Broadcasting Group. "But that process really hasn't begun
yet," a Philips spokesman said.

Still, some of the leading set-top box manufacturers in the
United States -- including General Instrument Corp. and Scientific-Atlanta Inc. -- have
indicated interest in incorporating the specifications into next-generation digital
set-top boxes.

"Some of our customers have indicated an interest in
it," said Himanshu Parikh, a manager in S-A's Digital Video Systems group.
S-A's exact plans, he added, will depend on when the group releases a complete set of
specifications. He estimated that it will take "another 12 months" to test the
specifications and to incorporate them into S-A's digital set-top boxes.

The decision by Cable Television Laboratories Inc. to
support the IEEE 1394 specification as a physical interface between digital appliances was
an important, if not unexpected, step in bridging the gap between cable-TV and
consumer-electronics devices. The harder work will be agreeing on the communications
protocols and other software kernels that will be needed to create true interoperability.

Apart from also announcing support for IEEE 1394 as the
physical interface between devices, the eight companies have not even released the
preliminary specifications under discussion.

But Sony -- now a 5 percent-owner of GI -- has said that it
hopes that the group will include its "Home Networking Module," which includes a
command set and application program interfaces.

"We'd like GI to use this technology for their
set-top box," said a Sony spokesman. "I know that we proposed our technology to
OpenCable. But we don't know how much to expect." The OpenCable initiative is
expected to announce the first approved APIs this week at the National Show in Atlanta.

Sony's home-networking module is the same one licensed
by Microsoft Corp. as part of a cross-licensing agreement including "certain
versions" of Windows CE, according to a joint statement by Microsoft and Sony
executives last month during the National Association of Broadcasters show in Las Vegas.

Under terms of the agreement, Microsoft will incorporate
the in-home-networking module in certain versions of Windows CE -- including, potentially,
the version that Microsoft will supply to Tele-Communications Inc. for OpenCable set-top

To some extent, that will depend on how closely the group
of eight companies sticks to its schedule to complete the specifications for what they
hope will become a de facto industry standard. "These things always take longer than
people expect," noted an executive with one equipment-maker supporting the

While not commenting directly on the version of Windows CE
that will be supplied to TCI, Microsoft digital-TV-group product manager Steve
Guggenheimer said the cross-licensing agreement with Sony "won't delay" the
initial release of Windows CE for TCI.

Guggenheimer added that despite the growing relationships
between TCI, Sony and Microsoft, the MSO "wasn't involved" in bringing Sony
and Microsoft together. Instead, agreements involving in-home networks are another
manifestation of the convergence of PCs and consumer electronics -- and, by extension,
digital-cable set-top boxes. "You're seeing a set of relationships out of that
fall into place," he said.

That's one reason why in-home-networking proponents
are more optimistic about current initiatives, compared with past attempts -- most notably
CEBus, the ill-fated home-automation standard developed earlier in the decade under the
auspices of the Consumer Electronics Manufacturers Association.

"By the time they finished [CEBus], it was outdated
technology," said an executive with one of the eight manufacturers supporting the new
specs. And [in-home networking] works better in a digital environment." CEBus was
designed to link a wide range of in-home devices -- everything from TV receivers to
washing machines and air-conditioning systems.

The eight-company announcement has also received generally
positive reviews from other groups. "It is encouraging that you have multiple vendors
supporting interoperable specifications," said Ben Manny, chairman of the Home RF
Working Group and Intel Corp.'s architecture-labs manager for residential networking.

Although that group has focused on wireless connectivity so
far, "we do believe that 1394 is a viable technology for an in-home backbone down the
road," Manny said, adding that the consumer-electronics initiative is "actually
complementary" to the Home RF Working Group's proposal.

The Home RF Working Group specifications envision wireless
in-home networks with an effective bandwidth of 750 kilobits per second to 1.2 megabits
per second, using the 2.4-gigahertz band assigned for industrial and other uses. "It
would allow a reasonable amount of data-sharing and audio," Manny said.

The Home RF Working Group's product-introduction times
are roughly in parallel with those of the consumer-electronics group. An "0.9
Revision" is expected to be ready by early fall, in time for a planned
developer's workshop in October.

Complete specifications will be released by the end of the
year, Manny said -- in time to allow manufacturers to get their first products on store
shelves by the second half of next year.

He estimated that it will initially cost $20 to $30 to
implement the specifications in consumer products, with the cost of goods declining to
below $15 in third- or fourth-generation iterations.

The group's members include most of the leading
semiconductor manufacturers (Intel, Motorola Inc., Lucent Technologies, National
Semiconductor Corp., Rockwell International Corp.), as well as computer-hardware and
software suppliers (IBM Corp., Microsoft, Compaq Computer Corp., Hewlett-Packard Co.).