Catching customers with home nets, Part 2

Why telcos are ahead of cable companies in providing broadband managed home networks.

Last time, we looked at the cable industry’s efforts to stake a claim to your home network. Of course, your telephone company wants to do the same thing for the same reasons: increased customer stickiness and service revenue.

So far, how do the cable and DSL guys stack up? 

First, the number of U.S. DSL subscribers is less than that of cable modem users, but the telcos are further ahead providing managed home networks. The reason has more to do with network equipment provider 2Wire than any concerted effort by the DSL industry.

2Wire is the major home gateway provider to the DSL market in the U.S., providing equipment to nearly all the major telcos, including SBC, Verizon and BellSouth, as well as Earthlink, one of the largest independent ISPs in North America. The company, which recently released its third-generation product, can credit its success to two things: being first to market and providing the only real back-end management solution for DSL-connected home networks.

The second reason is more important. Unlike the cable industry with its CableHome specification, the DSL industry has had little coordination on residential gateway and home network standards. 2Wire has offered a way for DSL providers to remotely deploy and manage home networks, and bill for services. 2Wire’s technology, called Open Gateway Management Protocol (OGMP), provides back-end management software as part of a gateway relationship with a service provider.

While 2Wire filled a gap in the initial rollouts of DSL managed home networks, the industry has finally responded to the fast-growing demand. The DSL Forum, the dominant trade and technical consortium, recently announced the formation of DSLHome. DSLHome proposes to do much of what CableHome has done within CableLabs: Define technical requirements for DSL-connected home networks and gateways, as well as a standard for back-end management. Ultimately, the group’s work should improve industry cooperation and standardization.

What does this mean for 2Wire? Certainly more competition as companies such as Netgear, Linksys and Efficient Networks will then partner with network management software vendors like Core Networks to create products built on a standard protocol. But 2Wire is still staying one step ahead. Last December, it proposed that OGMP be the basis for the DSLHome’s home network management protocol.