IBM, Bell Atlantic To Network Homes

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Bell Atlantic Corp. and IBM Corp. have teamed up in a
home-wiring venture that could spell the beginning of a new branch of operations
throughout the broadband-services sector.

IBM and the telco's Bell Atlantic Communications and
Construction Services Inc. unit said they will offer new home builders and current home
owners in Bell Atlantic territories a means of linking personal computers, entertainment
appliances and security and energy-management systems.

"We're expanding our business rapidly due to the
tremendous response that we've gotten from home builders in our initial
markets," IBM spokesman Andrew Hayden said. "In looking for new partners to
handle the local installation and integration, we found that BACCS was a perfect
fit."

Bell Atlantic has become IBM's first service-provider
partner as the computer company moves beyond the Sun Belt states to pursue the home-wiring
initiative nationwide.

Hayden said the company is talking to other potential
partners, including cable companies and telcos.

While IBM's "Home Director System" is aimed
at what many computer, consumer-electronics and service-provider interests see as a major
part of the residential-market opportunity of the future, it is only a first step, Hayden
said.

"The system is equipped to accommodate new modules for
upgrading to more advanced systems over time," he added.

In the IBM system, various types of wiring -- including
coaxial cable and standard telephone wires -- are brought together in a network-connection
center. There, signals native to the various devices are modulated to different
frequencies and sent out over a 100-megabit-per-second Ethernet local-area network using
category-five (shielded) twisted-pair wiring.

This allows several computers to run off a single Internet
connection or several TVs to feed off a single VCR, Hayden noted.

But the system does not provide a means of interaction
across these different types of devices, as is envisioned in a number of networking
initiatives aimed at linking digital appliances in the future.

Those initiatives are meant to accommodate interactivity
among all types of digital devices, thereby allowing multiple applications to share
computer power from network sources or in-home controllers and PCs.

Among these are: the consumer-electronics industry's
HAVi (Home Audio-Visual interoperability), Microsoft Corp.'s "Plug and
Play" and wireless interests' SWAP (Shared Wireless Access Protocol) and
"Blue Tooth."

The IEEE's 1394 fire-wire system, on which the HAVi
initiative is based, appears closest to breaking through as the most commonplace
home-wiring platform, said Scott Smyers, vice president at Sony Corp.'s Sony USA
Interconnection Architecture Labs and chairman of the audiovisual working group within the
1394 Trade Association.

"A large number of companies are shipping millions of
units in an ever-growing diversity of product categories this year," Smyers said at
last month's Consumer Electronics Show in Las Vegas.

Many of these products, such as digital TVs, are pegged to
an in-home-networking data speed of 200 mbps, while fire-wire-equipped PCs are supporting
400-mbps links, Smyers added.

Sony has been demonstrating 1394 linking of
"conceptual" products, as well as existing products, including a digital
set-top, a digital VHS deck, a hard disk capable of recording and storing audio and video
media and the "Mini Disc" recorder and player.

Texas Instruments Inc. anticipates supplying 1394 chips for
upward of 10 million products this year, said Jim Snider, worldwide strategic-marketing
manager for bus solutions at TI and chairman of the 1394 Trade Association.

"That's based on our most conservative estimates,
and we're only one semiconductor manufacturer out of maybe one-dozen that are
supplying 1394 chips," Snider added.

But there are key issues to be worked out before 1394
becomes widely used as an in-home-networking platform, said David Troup, manager for
emerging-technology standards at Advanced Micro Devices Inc., a leading supplier of PC
processors.

"There are intellectual-property issues related to
protecting IP content for Hollywood and other content providers, and also
intellectual-property issues related to 1394 technology itself that the industries need to
work out," he said.

Nonetheless, Troup added, "I personally believe that
we're going to get through all of this, and that we will have 1394 embedded in
devices throughout the home probably much sooner than you think."

IBM is ready to jump on the 1394 bandwagon whenever it
makes sense to do so, Hayden noted.

"We've designed the network center to be
modularly upgradable to the standard," he said.

IBM has also begun marketing a home controller -- a
computerized unit that interconnects nonentertainment applications in the digital domain,
including PCs, lighting and temperature control, security and, soon, energy management.

In addition, the company is exploring the introduction of a
home-entertainment "thin" server, the "Netfinity 5000," which would
allow users to download and store for later playback videos, music and other media forms,
Hayden said.

He added that the product would be available by the end of
the year "at the earliest."

So far, IBM's work with local integrators has focused
on selling the networking system to developers building new homes. But with the Bell
Atlantic agreement, the system will be marketed to current home owners, starting at a
price of about $1,000, Hayden said.

BACCS is considering moving beyond Bell Atlantic
territories in its work with IBM, said Mark Marchand, a spokesman for the subsidiary.
"Our unit is the largest premises-wiring company in the country, with a staff of
3,500 people and growing every day," he added.

"We look at what we're doing as supplying the
last foot in the information superhighway," Marchand said. "We think that
it's a market with a big future."

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