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| EMagazine Volume 4 Issue 4 August 1999 |
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As consumers and builders continue to look at networking as a means to increase household functionality, safety, comfort, and value, Parks Associates anticipates that the demand for the high-quality infrastructure provided with a structured wiring package will grow. |
Kurt Scherf is an in-home network analyst for Parks Associates, a Dallas-based market research and consulting firm that studies emerging residential technologies and services. Parks Associates publishes reports and journals, hosts industry gatherings annually, and provides custom information for Fortune 500 technology-based companies. Mr. Scherf is the author of Networks in the Home: Emerging Technologies and Standards and Analysis and Forecast, and a co-author of The Residential Wiring Infrastructure Report. For more information on these reports, call 1-800-727-5711 or e-mail sales@parksassociates.com . Mr. Scherf is available at 972-490-1113 or at scherf@parksassociates.com |
George Jetson probably never gave much thought to the technology behind his talking computer, the moving sidewalks, the video phone, or the other time-saving devices found in his futuristic world. He didn’t have to – things simply worked when he wanted them to do. Although nobody is predicting that the home will resemble George Jetson’s domicile any time soon, a growing number of companies are offering a solution today that is likely to revolutionize the way in which consumers interact with computers, control various home systems, utilize entertainment components, and enjoy enhanced comfort. This "hidden revolution" – the installation of a high-quality wired infrastructure (or "structured wiring") – is probably occurring in new housing developments in your city right now.
Home networking, once thought to be the realm of
Hanna-Barbera cartoons or the elite upper crust homeowner, has come a long way. In just
the past 18 months alone, a number of consortium-led efforts have created specifications
for so-called "no-new-wires" networking, which essentially means that computer
and entertainment data can be sent down the same phonelines or powerlines in use in the
home currently, or through the air via radio frequency signals. Groups with
strange-sounding names such as HomeRF, HomePNA, and Bluetooth are all vying to sell
products that allow such devices as computers, entertainment components, and
communications systems to be seamlessly linked in the home without the need to install
additional wiring.
In light of the heavily marketed "no-new-wires" solutions (which are touted as low-cost and easy-to-install products), why are so many players betting that consumers will opt for whole-house wiring? According to IBM Corp., which is pursuing market penetration via its Home Director™ wiring and whole-house control solution, wiring offers a basic advantage over wireless applications. Andrew Hayden, spokesperson for IBM, says that home networking is driven by two main applications – computing and entertainment. "If you look at these key drivers," Hayden notes, "the wires we’re putting in today are capable of carrying the entertainment of tomorrow, including high-definition television (HDTV). Wires will always work, and they will always be reliable."
Although Intel Corp. has also been a strong player in the field of "no-new-wires" networking, it has also lent its support to a new industry initiative called Wiring Americas’ Homes. Intended to educate consumers and builders on the need for a more advanced communications infrastructure in the home, the consortium also includes such players as IBM, Lucent Technologies, OnQ Technologies Inc. (which recently spun off from AMP Inc.), and other well-known wiring players.
"The ability to connect multiple PCs and in the home is becoming increasingly important for consumers," said David Redelfs, capabilities marketing manager for Intel Architecture Labs. "Wiring Americas’ Homes addresses the need for wiring in new homes by providing a template for builders to affordably install the necessary wiring for home data and entertainment networks."
A number of companies agree with these assessments, and the race to bring a high-quality communications infrastructure to the home has been joined by numerous companies offering advanced wiring solutions they say will "future-proof" a residence for unforeseen networking needs. With a market projected by Parks Associates to be worth more than one-half billion dollars annually, it is expected that more homes will be pre-wired with an advanced networking infrastructure. In other words, the networked home that you thought was decades away may be sitting in the development just down the street from you!
A Brief History of Communications Wiring
Until the divestiture of AT&T in 1984, only a telecommunications employee was allowed to pre-wire the home for communications needs. Following the breakup of Ma Bell, however, any number of installers can now install wiring, but without one standard way of wiring a home, the communications infrastructure in most homes is inadequate for services beyond simple voice transmissions. And even that can be a problem. Many homes experience the problem with "crosstalk," – interference from another telephone line or radio signals that disrupts voice transmissions. BellSouth, for example, reports that it has had as many as 90,000 service calls per year to investigate crosstalk complaints. At $100 per truck roll, it’s an expensive problem, and the Company lays blame squarely on inferior wiring and poor installation techniques.
A voluntary industry standard completed by the Telecommunications Industry Association (TIA) in 1991 was the first attempt to address the installation of communications wiring. For the first time, an organization officially recommended the installation of a minimum Category 3 telecommunications cable which would be configured in the "star" or "home run" topology from a central connecting point. Unfortunately, ANSI/EIA/TIA, as a voluntary "standard," lacked the punch to convince many developers of the benefits of higher-quality cabling. The reason? According to the Federal Communications Commission (FCC), builders tend to select "premises wiring on the basis of cost rather than performance."
According to one player in the structured wiring industry – Utah-based FutureSmart Networks Inc. – cost shouldn’t be an issue when talking about "futureproofing" (the Company has trademarked the mantra) the home for tomorrow’s unforeseen applications. First, company officials state that the cost to pre-wire a home for advanced services is negligible when consumers can amortize the cost (which Parks Associates estimates at between $1,000 and $2,000 for an average house) over the span of a 30-year mortgage. Second, officials at FutureSmart Networks argue that the cost to add additional networking capabilities down the road – including computer networking or the ability to distribute video signals to any television in the home – can be as high as 60% over the cost of pre-wiring with a structured wiring package. FutureSmart Networks, for example, generally provides two Category 5 unshielded twisted pair (UTP) cabling, two RG-6 quad shielded coaxial cables, and two fiber optic cables to every outlet. Most companies in the business provide similar cabling, although FutureSmart Networks is one of the few companies that includes optical fiber, arguing that advanced services down the road will require a great deal of bandwidth that only fiber can handle.
Current Activities
Although structured wiring has been slow to catch on, indications are that the industry is well positioned to provide the needed network infrastructure for hundreds of thousands of newly built homes. Parks Associates’ research indicates that growth will occur thanks to higher interest on the part of both consumers and developers.
The Consumer
The Builders
In research conducted by Parks Associates, home builders acknowledge that consumer demand for structured wiring largely drives them to install the high-quality network infrastructure in new homes. Not surprisingly, therefore, the number of agreements that are being reached between home builders and structured wiring manufacturers has increased in the past few months. For example:
- In November 1998, Lucent Technologies announced agreements valued at more than $22 million to provide as many as 55,000 new housing starts with a high performance wiring network over the next three years. Under the agreements, Lucent’s HomeStar® Wiring System will be installed in new homes being constructed in Las Vegas, Nevada; Gilbert, Arizona; and Miramar, Florida.
- On February 2, 1999, Bell Atlantic Atlantic Communications and Construction Services Inc. (BACCSI), a subsidiary of Bell Atlantic Corp., announced an agreement with IBM to deliver IBM Home Director™ home networking systems to homeowners throughout the northeastern United States. Bell Atlantic officials predict that the Home Director™ system will be installed in as many as 10,000 new homes in 1999, and they anticipate that as many as 15,000 homes will be wired in 1999 with "a mix of advanced wiring systems," including IBM’s Home Director™ home networking system. On June 28, IBM and SecurityLink (a unit of Ameritech Corp.) announced an agreement whereby SecurityLink becomes IBM’s first nationwide integrator of the Home Director solution.
- FutureSmart Networks Inc. reports that it has a builder program of 27 who are installing the FIN solution as standard. The Company anticipates that approximately 17,000 homes will have the FIN system installed in the next three years.
- OnQ Technologies Inc. reports that it has agreements with well over 100 production builders to integrate its AMP OnQ System into residences.
As consumers and builders continue to look at networking as a means to increase household functionality, safety, comfort, and value, Parks Associates anticipates that the demand for the high-quality infrastructure provided with a structured wiring package will grow. By 2004, for example, 40% of all newly constructed homes (including both single-family and multi-dwelling units) will be pre-wired for advanced services with a structured wiring package or its equivalent.
The growth in the structured wiring market means more opportunity for the installing dealer and contractor who have been properly trained in its installation. As the "hidden revolution" of advanced wiring infrastructure in homes gains more prominence, expect to see greater numbers of builders installing structured wiring as a standard feature. No, we’re not going to see Rosie the robot maid or the flying car in use anytime soon, but more consumers will be able to take advantage of advanced new services thanks to the technology hidden behind the walls.
