We’ve long believed that supporting home networks has been a key driver for broadband services like DSL. Providing a means for getting the typical multi-computer home online and up and running with multiple IP addresses and the like is about as good an argument for broadband as there is. We’re surely preaching to the converted here on that topic.
We’ve long believed that supporting home networks has been a key driver for broadband services like DSL. Providing a means for getting the typical multi-computer home online and up and running with multiple IP addresses and the like is about as good an argument for broadband as there is. We’re surely preaching to the converted here on that topic.
But for the longest time, service providers simply ignored this marketplace reality. Sure, they have offered a smattering of residential gateways, and a few innovative ISPs had some success with home networking services, but for the most part, the home network was implemented by consumer do-it-yourselfers, not by telcos or MSOs. Ask a typical broadband user about home networking vendors and you’ll hear names like Linksys, NETGEAR or D-Link instead of broadband consumer premises equipment (CPE) vendors. Ask these same residential customers where to get a home network, and chances are they’ll say Best Buy or Fry’s, and not SBC, Comcast or Verizon.
Now we’re not saying that broadband service providers have completely missed the boat. Just about all of the major broadband providers are offering their customers some sort of “home networking” support these days. The most common model is a partnership with a home router (wired or Wi-Fi) vendor like Linksys – the offer is typically a discounted price on a Wi-Fi access point or similar device. From what we hear, the carriers are handing out a boatload of these devices to customers who have heard all about home networks, but who haven’t already made the decision to go and build their own.
This approach has its advantages: it’s relatively cheap for service providers to implement; it provides a quick way to get multi-PC households online; and the equipment works pretty well. These services are unmanaged, the service provider may offer some software to help set up and support the router, but there’s typically no visibility into the router from their network management and element management systems.
This isn’t a model for ongoing service revenue, though at best, a provider can hope for a bit of up-front revenue from the equipment sale, and maybe a reduced churn rate over time. What’s missing here is an ARPU enhancement from home networking – an actual “bill the customer every month” type of service.
For a long time, there have been voices calling for a service provider-managed and -supported home networking service. But we think it’s now too late for such a service to make much of an impact. Home networking gets easier for consumers to do by the day, and every day moves deeper into the realm of consumer electronics instead of CPE. As long as the provider’s vision of home networks ends at the router, this trend towards retail home networking will only strengthen.
To make home networking work (and pay), a service provider needs to think about expanding its network all the way to the endpoints in a home – not just to the router, but to each PC, to the Xbox or Playstation, to the digital set top, to the home server, to all of the myriad devices that are becoming network-enabled.
Providing true end-to-end service management and QoS assurances for broadband is where the retail model can’t match up to a service provider’s capabilities. Extending the network past the router means that all of the service improvements that providers have been talking about – things like application-level QoS, turbo buttons, prioritized VoIP or video services – can be truly enabled throughout the home. Retail home network products don’t include any sort of QoS, which given the predominance of Wi-Fi in these networks can mean that performance of bandwidth or latency-sensitive applications just won’t be up to speed.
Service providers actually won’t have to totally reinvent the wheel to expand their interface further into the home. The DSL Forum, for example, has been busily publishing a flurry of Technical Reports like TR-064, TR-069 and TR-094, which define the role of broadband CPE in a home networking environment and complement other TRs which enable end-to-end service provisioning and QoS assurance. Residential gateway vendors like 2Wire are beginning to offer TR-compliant gateways and are beefing up their management systems. Back office software vendors are gearing up their systems to support more than just PC endpoints in the home, as well as taking the “pain” out of supporting the various PC configurations found in residences. And the home networking media itself is becoming more robust – with improvements in wireless and a whole host of companies developing phoneline, powerline and coax solutions that can complement Wi-Fi.
Understandably, service providers are a bit reluctant to take the leap into fully supported and managed home networking services. They envision the tech support call load and stop right there. We would argue that the technology behind home networking is getting more mature every day – the devices themselves, the operating systems on PCs and endpoint devices themselves get easier to manage and network with every new iteration.
And even if there is some non-negligible expense involved in supporting home networking, the revenue opportunities it opens should more than justify the business case. Beyond a home network/IP version of “inside wiring” charges, a service provider can use QoS-enabled home networking as a real differentiator for all the value-addons that they’ve been talking about launching for years. Think of how much easier it would be to market, for example, a telco gaming service with guaranteed latency and “ping times” right to the console, compared to today’s best efforts services?
Customers need a reason to choose their DSL provider over a third party when it comes to things like gaming, VoIP, video services and the like – and end-to-end networking could be just the ticket.
