Time Warner Cable is in the midst of a four-market home networking trial that will lay the groundwork for widespread deployment, once newer gateway products hit the market.
"Home networking is our additional outlet strategy for high-speed data," said Time Warner senior vice president of new product development Kevin Leddy, who spoke at a Cable & Telecommunications Association for Marketing sponsored panel at the National Show here. "Customer satisfaction, so far, is very high."
The cable industry is grappling to find the best technology and the right business model for home-networking. To Leddy, the key is providing an adequate level of technical support that satisfies consumers, but doesn't kill profit margins.
Time Warner's basic idea is to knit together two personal computers and one printer through either a wired or wireless connection, Leddy said.
The wired option costs $9.95 a month, while the wireless plan costs $14.95 a month.
It would cost $50 to install the wireless option and $80 to hook up a wireless set-up, but those prices could drop as installers become more efficient, he said.
Leddy said Time Warner is doing the installation and providing around-the-clock technical support and security and firewall protection for subscribers. Equipment is included in the package price.
The setup includes an integrated cable modem/gateway device that sits next to the cable modem. The gateway is connected to a telephone wall jack for a wired connection, using the Home Phoneline Networking Alliance (HPNA) protocol.
Under that setup, a consumer could put a PC near any telephone jack in the house and be part of the home network.
"The 2wire gear works very well for us," Leddy said. "It also has remote management. The HPNA is working quite well."
The wireless option is based on 802.11b technology.
The Time Warner service now counts about 1,000 subscribers in four markets. Leddy declined to speculate on how high penetration could go, but said Time Warner is designing the service to be profitable, even if penetration figures aren't that high.
CAPEX SHOULD FALL
Although it currently costs Time Warner $200 to $250 for a modem, gateway and adapter, Leddy expects those prices to soon drop to the $50 to $100 range. A device that integrates home-networking gear with the modem — which is on many vendors' drawing boards — will help reduce costs, as will volume shipments.
Leddy said Time Warner recently issued a request for proposals for its home-networking platform. The MSO's specifications include compliance with Cable Television Laboratories Inc.'s Cable Home 1.0, Data Over Cable Service Interface Specification 1.1 and PacketCable 1.0 standards; an integrated modem, Home Phoneline Networking Alliance (HPNA) and Universal Serial Bus (USB ports); options for 802.11 wireless connectivity; and internal voice terminals for voice-over-Internet protocol services and remote management.
But Leddy said there are challenges.
"You have to define the limits of technical support," he said. TWC lays down parameters for the types of PCs, printers and operating systems can link, to make sure it doesn't attempt to connect devices that can't work well together — especially older models.
Technical support is the chief balancing area.
"We don't want to spend too much time on the phone," he said. "We can't get into the business of troubleshooting Windows."
The MSO must also provide adequate customer-support training, he added. Eventually, Time Warner will offer online customer care and provide the ability for self-provisioning, which should help to reduce costs.
But the flip side is that home networking with DOCSIS 1.1 opens up a new array of other potential services, he said, including VoIP, videoconferencing, games, music downloads, digital video recording and downloads to mobile devices.
"There are very few fixed costs to this business," he said. "The rate of return can be very good, if the technical support is low. It works on very low penetrations."