BBH Central Home Page
Broadband Home Central
BBH Report Home Page
January 21, 2001 Provided by System Dynamics Inc. in association with

Subscription and copyright information at end of this report.


Heard on the Net

News about People and Companies influencing The Broadband Home

People News

Stephen Carter has joined NTL as Managing Director. He was previously CEO of J Walter Thompson's UK Group. He has also been named to the board of Two Way TV in which NTL holds a 48% stake. ( )

Humberto “Bert” F. DaFonte has joined Jeff Rosenberg PR as senior account director. DaFonte will head the account teams for JRPR clients within the broadband TV realm. ( )

Brett Helm has been named president and COO of AirFiber Inc. Helm was previously general manager of Intel Corp.'s Network Equipment Division. ( )

Dave House is taking the chief executive post at start-up Allegro Networks. He was formerly a key executive at both Intel and Nortel Networks. P.J. Singh, acting chief executive, will become chief technology officer. ( )

David Hughes has been named RespondTV's sales director for Europe. He joins RespondTV from ( )

Don Mathison , formerly with Media General Cable, has joined Starpower as the Regional GM in the DC Metro region. ( )

Stephen T. McCrann has become Sales Director at Broadband Gateways, Inc. He was previously a sales director in SBCs DataComm and Internet groups. ( )

Richard Murphy has been named chief operating officer of congruency, Inc. He was previously senior VP of sales and commercial markets for RCN. ( )

Roy A. Wainwright , formerly with FastComm Communications, has been appointed Vice President and General Manager of U.S. Robotics Core Business Unit. ( )

Bryan Way , formerly at EarthLink, has been appointed Senior director, Product Development at e-Site, Inc. ( )

(Please email to report a change in your position.)

Company News


Broadcom Corp. agreed to buy ServerWorks Corp. for as much as US$1.74-billion in stock. ( )

Excite@Home announced that it has terminated its agreement to acquire . will remain a provider of games to Excite users and Excite@Home will maintain its 10% equity stake in ( ) ( )

Extreme Networks will acquire Optranet, a developer of high-speed broadband delivery products, in a stock swap valued at $55.2 million. ( ) ( )

Intel Corp. has agreed to acquire Xircom Inc. for about $748 million. ( ) ( )

Tiscali of Italy agreed to buy French ISP Liberty Surf for $615 million. This continues the growing trend toward consolidation of European ISPs and makes Tiscali the second-largest ISP in Europe. ( ) ( )

Western Multiplex has terminated its plan to acquire Adaptive Broadband for $645 million. ( ) ( )


actzero has received investment funding of more than $4 million from Intel Capital and individual investors. The company provides interactive capabilities to broadcast TV. ( )

Iospan Wireless Inc. , a fixed-broadband-wireless technology provider, announced it has raised $47 million in Series C equity financing. ( )

SandCraft , a networking chip start-up, completed a third round of financing, raising $35.5 million. The largest contibution came from Cisco. ( )

VentureNova , a seed fund for early-stage Internet appliance technology ventures, has made an investment in SimpleDevices , the provider of a wireless home networking platform and Internet devices. ( )( )

World Wide Packets completed its first round of outside financing, yielding $44 million. The company has raised more than $60 million since it launched operations. ( )

--Other News

@Security Broadband Corp. , in partnership with Cox Communications , has begun an initial technology trial of its broadband home security service in Las Vegas, Nev. The trial will test the transmission of audio, video and alarm signals over the system's cable infrastructure. ( ) ( )

2Wire and Dialpad announced an agreement to integrate support for Dialpad's Voice over IP services in 2Wire's gateways. By connecting a standard telephone to a 2Wire Phone Port adapter, consumers can network telephones without new wiring and can manage VoIP voice services for each networked phone through the HomePortal user interface. ( ( )

3Com announced their Home Ethernet Gateway. The unit allows consumers to plug the included Ethernet cables directly into four ports to connect PCs, Internet appliances, a printer and an external broadband or analog modem over a firewall-protected high-speed Ethernet network. ( )

AT&T will trade about $2.9 billion in its stock for the ownership stakes that Cox Communications and Comcast hold in Excite@Home. The deal increases AT&T's ownership stake in Excite@Home to 38 percent, and its voting interest to 79 percent. ( ) ( )

Broadband Gateways announced it has achieved complete interoperability with CopperCom. The tests verified access for voice, data, and multimedia services, and distributing them via wireless and wireline, throughout the premises. ( ) ( )

BroadJump has announced a series of technology partnerships, which include Core Networks, Incanta and Terayon. Broadjump will work on technology integration with its partners' products. ( ) ( ) ( ) ( )

CableLabs has appointed VeriSign to generate, host and manage the operation of the Root Certificate Authority for the authentication of digital certificates to secure DOCSIS 1.1 cable modems and PacketCable MTAs. ( ) ( )

chinadotcom corporation announced an agreement with Nokia . Nokia will provide broadband systems and system integration and chinadotcom will provide online content and services to Nokia's fixed line broadband Internet users in China. ( ) ( )

The Consumer Electronics Association (CEA) demonstrated Versatile Home Networking (VHN) at CES. Adaptive Networks, Sony, Philips, Leviton, Lexmark, Thomson, Samsung, Telcordia, Zayante, Echelon, QP-C, and MetroLink demonstrated a protocol independent, multiple application home network. VHN (formerly called "VESA Home Networking") is a standard for connecting all network-capable devices in a home. ( )

DataPlay took top honors as the Best Overall Lifestyle Product at this year's Consumer Electronics Show. The DataPlay digital media is about the size of a quarter and is designed to permanently store a large amount of digital content (250/500MB capacities). ( )

deltathree is entering trials of its Hosted Broadband Phone Services with nine broadband service providers. Broadband service providers will be able to private-label the deltathree offering, which lets users plug their regular phones into broadband, to their own customer bases. ( )

Elastic Networks announced that Citizens Communications is deploying Elastic Networks' Storm System DSL solution in some West Virginia locations. Citizens plans to launch high-speed Internet service in the first quarter of 2001. ( ) ( )

Ericsson will provide fiber-optic cable to broadband-technology provider Aerie Networks for Aerie's US broadband network in a deal valued at more than $300 million over three years. ( ) ( )

EspriTV announced a new Internet TV that doesn't require a set-top. They will support cable, DSL or dial-up. The sets use software created with Planetweb Inc. (See the January 2, 2001 BBHR for similar stories on TeleCruz-Zenith and Microsoft-Thomson Internet TVs.) ( )

Excite@Home released studies showing that broadband users are more highly educated, earn more money and have more Internet experience than dial-up users. The statistics also indicate that broadband is increasingly entering the Internet mainstream. ( )

Several items from the US Federal Communications Commission ( ):

  • The FCC has completed its annual study on the broadband marketplace, a 134-page report that concludes that nearly half of all Internet connections in the U.S. will be high-speed broadband by 2004.

  • The FCC launched an inquiry on the emerging market for interactive television (ITV). It will seek to define what services constitute ITV services, how such services will be delivered, and the general status of the ITV market. The FCC wants to know if ITV services fall within "cable services," or should to be classified as "telecommunications services," and be subject to regulations applicable to telephone service providers.

  • On William Kennard's last day as chairman, the FCC decided to deny TV stations the right to force cable companies to transmit both their analog and digital signals as they slowly convert to HDTV.

Humax Co. , a South Korean set-top box manufacturer, announced a 250 billion won (US$200 million) sales target for 2001. According to Asia Pulse, "the company plans to develop technologies for establishing set-top box networks known as 'STB Residential Gateway'." Last year, Humax established a German affiliate and a joint venture in the United States with Samsung Electronics. ( )

ICTV announced expanded support for key Broadband Interactive plug-ins and extensions, including Pulse 3.5, Veon, INNOVATV, BeHere(TM), Multipath, IPIX(R), MP3, and MPEG 4. ( )

iM Networks (formerly Sonicbox) has licensed its iM Tuning Service to Philips Consumer Electronics. iM Networks also announced an Internet licensing agreement with SESAC, Inc., a performing rights organization. ( ) or ( ) ( )

LaNet is the name of a new trade association of Latin American fixed-broadband-wireless-access system operators. Their founding members represent more than 40.9 million households representing 36 percent of Latin American households. Visit their website ( ) for more information - enter "lanetlogos" as the username and "press" as the password; when you get to the site, click on "files".

Ondigital , the UK digital terrestrial TV provider, reported 83% sales growth in 2000. The company has expanded from multi-channel TV into interactive TV and has signed up 56 brands to their ONnet portal in 3 months. ( )

PhoneFree announced a three-year alliance with . PhoneFree's Broadband Voice service uses their in-home device, the Gemini Gateway, with's DSL service, to enable flat-rate phone calls from their regular telephones. ( ) ( )

Qwest Communications bought back 22.2 million shares of its own common stock from BellSouth for $1 billion in cash. Qwest bought back its stock at less than they sold it for, and also got BellSouth to commit to a quarter of a billion dollars in future business. ( )

SONICblue 's Access division announced HomeFree Powerline, a home networking solution based on Intellon Corp.'s PowerPacket powerline technology. It allows multiple PCs to share broadband Internet connections, MP3 music, video and peripherals, as well as play multiplayer games by plugging into a common AC outlet. ( ) ( )

Telmax Communications has announced the release of the Xtreme200 Broadband Intelligent Home Gateway for DSL users. ( )

Thomson Multimedia has said that it will use Entrust Security's solution for providing authentication and encryption for its entire line of cable modems. In other Thomson news, they have announced an RCA-branded Internet Radio, which uses the Kerbango (now part of 3Com) Internet Tuning Service. ( ) ( ) ( )

U.S. Robotics Corporation announced new products marking its entry into wireless networking and broadband Internet access, the location of its new Emerging Technologies Division in Irvine, CA, and a strategic partnership with Broadcom Corporation. U.S. Robotics will be shipping cable and DSL modems by the beginning of the second quarter of 2001. Its suite of wireless products is based on the 802.11b wireless standard. U.S. Robotics and Broadcom will bring cable modems and Home Phoneline Networking Alliance (HomePNA) compliant home networking products to market during the second quarter of 2001. ( ) ( )

Wanadoo , France Telecom's ISP operation, has launched its first asymmetric digital subscriber line (ADSL) offering for consumers. The startup cost for the ADSL service is FF 990 ($140), plus an ongoing subscription of FF 298 ($45) a month, with a minimum 12-month subscription. It is not making commitments to specific data speeds but the company indicates most subscribers will get up to 500 Kbps. ( )

Winfire formed two separate subsidiaries, Winfire Inc. and Octive Technology Inc., under a new parent corporation, Steel Holdings Inc. Octive Technology will concentrate on infrastructure services, while the subsidiary named Winfire will be a consumer-focused broadband ISP. ( ) ( ) ( )

...and for our chuckle of the month we include this: La-Z-Boy (for those of you from countries that don't have the product, they are a reclining chair manufacturer) and WebTV Networks have announced a Microsoft WebTV Plus Recliner by La-Z-Boy called "Explorer". Touted as the first ever "e-cliner(TM)" the chair has a tray table that folds out and holds a Sony WebTV keyboard. See photo at ( ) .

Dismal Developments and DSL Distress

Perhaps it's just the gray skies of New Jersey in January that make things look so bleak. Then again, reading the press about developments on the DSL front does't add to anyone's cheer.

Over the past few months, distress signals have become pervasive throughout the competitive DSL market in the US. When the data CLECs started being able to re-sell the Regional Bells DSL services, many a business plan was written and funded to participate in the emerging market for providing DSL access and associated ISP services to end users. Then, when line-sharing was allowed so that DLECs didn't have to install an additional line for consumers for their data services, the DLECs talked about how their businesses would improve.

Along the way to the bank, something went astray. Consumers were ordering services from DSL ISPs who in turn got their DSL services from wholesale DLECs like Covad, Northpoint and Rhythms, who were in turn getting their DSL lines from the ILECs, who were also competitors to both the DLECs and the ISPs. When even the Regional Bells started having trouble meeting demand and maintaining reliable service (see below), the pain for consumers --way at the end of that value chain-- was reflected in some of their Internet postings. Add to the picture investor disillusionment with both the Internet and the DSL sector, and the failures spread rapidly throughout the sector.

The rug has gotten pulled out from many of the DLECs and ISPs focused on providing residential DSL services and the list has been continuing to grow. Here's a summary of some of the carnage:

  • Bazillion stopped signing up new accounts but said it is providing service to its existing Seattle customers. However, they are reported to be folding, and their website isn't responding as we go to press. ( )

  • DLEC Covad Networks announced that it had 274,000 total lines in service for the fourth quarter, half business and half consumer lines. As a result of the ISP woes, Covad recently laid off part of its workforce, and now has an area on its home page called Covad Safety Net "an organized transition program available to customers of financially distressed ISPs." ( )

  • Digital Broadband filed for bankruptcy and closed down. ( )

  • cut its workforce by over 100 employees and is now positioned as a direct provider of high-speed Internet access services for small and mid-sized businesses. ( )

  • ISP Flashcom has sold off half of its customer base, dismissed three-quarters of its workforce and filed for bankruptcy. ( )

  • ISP HarvardNet has re-focused its efforts into Web hosting and pulled out of DSL. ( )

  • Jato Communications Corp. suddenly went out of business after failing to secure more financing to run operations.

  • Network Access Solutions (NAS) will assign to SBC substantially all of the 400 unused central office (CO) sites built by NAS in the BellSouth and U S West territories in exchange for SBC's cancellation of a $75 million debt. ( )

  • DLEC NorthPoint Communications has filed for bankrupcy. NorthPoint officials said that the company will try to sell off its assets and has received $38 million in new money to continue operations. ( )

  • DLEC Rhythms NetConnections Inc. is cutting nearly one-quarter of its workforce to trim expenses by $80 million this year. The company plans to fire 450 workers. ( )

  • Zylan has filed for bankruptcy protection and laid off more than half its employees. ( )

There have been ripple effects from the DSL shakeout in markets outside the US.

  • Versatel, a Dutch telecom company, is abandoning plans to provide DSL services in the UK. Versatel confirmed that the break-up of its Versapoint joint venture with NorthPoint meant it would not be proceeding with plans to offer DSL in the UK or France and it would concentrate on Benelux and Germany. Versatel relieved NorthPoint of a $23.2 million (E25 million) capital commitment, assumed all VersaPoint liabilities and any future capital commitments, and also paid around $6.5 million (E7 million) in cash for the stake. ( )

  • NorthPoint is also selling its 50 percent share in NorthPoint Canada Communications to Call-Net, its JV partner. Call-Net will relieve NorthPoint Communications of all contractual obligations to the JV and will pay $8 million Canadian ($5.3 million US) dollars to NorthPoint Communications. ( )

It will be interesting to see if the US DSL situation repeats itself, or can be avoided, in Europe. Some analysts conjecture that two differences in European DSL may result in a different outcome. Those differences are the greater population concentration within range of a central office and the better condition of much of the copper plant. Time will tell.

With the US DLECs dropping like flies, it would seem that all would be rosy for the ILECs. Their DSL installations did show strong new subscriber growth. The regional Bell's reached their projections of new customers and expect to triple their rollout in 2001. However, they (and their customers) are suffering from growing pains which included provisioning problems, equipment shortages and more.

For example, Verizon Communications is being sued by customers frustrated by delays in getting their DSL access installed, and by significant access disruptions and delays in obtaining technical service. The class-action suit is attempting to stop Verizon from signing up new subscribers and to force compensation of existing customers. Lawsuit information is at ( ) and there's a web site ( ) to air customer complaints.

The suit comes just after Verizon started offering discounts that will presumably bring about still more demand. "Verizon is opening the new year with a powerful nationwide offer ... supported by an advertising campaign employing print, TV and direct mail that will run through April 2. The Verizon offer includes full-service packages at deeply discounted rates in addition to deals on services like long distance, high-speed Internet access, ..." ( )

What does all this mean for broadband access providers? If you happen to be a provider using cable, fixed wireless or the new two-way satellite technology, it's time to move aggressively to capture the growing broadband access demand. For consumers, much depends on where you happen to live. Those fortunate to be in markets like Phoenix have a plethora of choices. Others (like us) are hoping that two-way satellite will finally provide us a solution.

Congratulations to our friends! CES Award Winners

Lest we sound too negative, we'd like to remind everyone that there are lots of great things going on in the industry too. Or as brother Bill (Gates) said in a New York Times interview: "This year electronics driven by software is really starting to come into the home in a big way ... You see it with music, you see it with photos, you see it with TV, you see it with the ways people are using PC's as a creativity center."

We extend our congratulations to the winners of the Innovations 2001 Awards and the TechTV 'Best of CES' awards presented at this month's Consumer Electronics Show. Here we'd like to give special recognition to the companies (now winners) you met when they presented at our October conference and those who will be with us for next month's Broadband Home Spring 2001.

The Innovations 2000 winners are:

  • 2Wire for their HomePortal

  • 3Com for their Kerbango Internet Radio

  • both Hughes Network Systems and TiVo for their DirecTV receiver with TiVo

And the TechTV winners and finalists:

  • Hughes Satellite return DirecPC

  • Qubit Wireless Webpad

  • Ucentric Home Networking Platform

"Way to go" guys!! You can see complete listings of the winners at the CES Web site ( ) and meet most of them again at Broadband Home Spring 2001 in Miami.

How The Home Gateway Can Help Avoid Blackouts - A Discussion With Coactive Networks

We're sure everyone has heard about the recent "rolling blackouts" in California, which have put the state, to quote from The Economist, "on the brink of an energy crisis of third-world dimensions." It's clear that the problem is an imbalance of supply and demand. Electricity demand is rising rapidly, and supply is not keeping up. When there's a peak demand that's uncomfortably close to the available supply, the utility has to pull the plug on some customers to avoid knocking out the whole state.

The Economist quotes a senior utility executive as saying "What will reduce the demand for power? What will increase power supplies? Unless the basic laws of supply and demand are repealed, those two questions must be answered. Everything else is just a sideshow." It takes years to build new power plants to increase the supply, so the best opportunity in the near term is to reduce demand.

We recently had a long phone discussion with Coactive Networks to follow up on their press release about the Coactive Energy Bundle, a complete energy management system built on the Coactive Connector residential gateway. We talked with Adam Marsh, Coactive's co-founder and VP marketing, who said that Coactive has chosen to focus its gateway on "telemetry" applications. He told us about the ability of their gateway to interface with energy meters, thermostats, light switches, and major electrical appliances, and described how the Coactive system acted as a "telemetry gateway" between the home devices and the power utility.

We must admit that it took us a while to "get it." We've been around this business long enough to have heard this story many times from many companies -- and none of those companies is around any more. So our initial reaction to the Coactive gateway was to dismiss it as yet another replay of the same old story.

But as we got deeper into the discussion, we started to understand the relationship between the energy crisis and this application of a home gateway. The gateway is really doing two things: providing the power utility with an instantaneous readout of power usage in each home, and giving the utility the ability to control the electrical use of home heating, air conditioning, and major appliances.

By having an interface into individual homes, the utility can see how electricity is being used in each home. When electricity demand starts getting close to a peak, the utility can "manage down" the electrical usage on a "per-home" basis rather than a "per-community" basis. By providing lower rates to customers who install the gateway, the utility can adjust the thermostat, lower the lights, or turn off appliances.

The customer can also manage electrical consumption more carefully, with feedback from the utility. While electrical bills are going to go up, customers with the gateway can keep their costs lower both by their own actions and by the utility's.

I asked Adam what has changed - what will make this application successful now when it has failed so many times before. He said that the big difference was the capital and installation cost - both the gateway itself and the interfaces to the electrical equipment in the home. The gateway used to cost thousands of dollars, but now costs "a few hundred" -- Moore's Law in action. Coactive has built its system on open standards -- older standards such as CEBUS, LonWorks, and X-10, and newer ones such as OSGi and UPnP -- and they expect the costs to keep going down as more home equipment is built using those standards.

Another plus is that the Coactive system doesn't depend on any particular form of outside connection. While it is designed to work with an "always-on" broadband connection, they also have models which work over standard dial-up telephone lines. The dial-up version handles the mass market today, while the broadband version provides lots of added value - such as high-speed Internet access -- for the broadband home.

Adam told us about the service roll-out under way with Swedish communications company Sensel AB, an unregulated communications company formed by Vattenfall AB, the largest electric utility in Sweden. The Coactive gateway is being used to deploy multiple telemetry services to residential customers, small and medium size businesses, and industrial customers, and Sensel plans to reach over 400,000 customers in an aggressive roll-out across Sweden. The roll-out started over a year ago, and Coactive says they are now shipping 10,000 units a month to Sensel.

Coactive quotes the California Independent System Operation (which runs the electrical grid in the state) as estimating that "a 10% reduction in electricity consumption statewide on peak would have eliminated recent price spikes". It would be interesting to compare the cost of installing this type of equipment to that of building enough electrical capacity to meet the increasing demand.

Coactive has put out a White Paper "Changing the Future of Energy Management, Demand and Costs" which is worth reading.

Our previous writing about the role of the home gateway has focused on high-speed internet access, digital telephony, and audio/video distribution in the home. We'll pay a lot more attention to the telemetry application now that blackouts are in the headlines every day.

( )

Broadband Home Spring 2001 -- Register now for this "don't miss" event

The Broadband Home Spring 2001 Conference takes place February 26-28 at the Miami Hyatt Regency Hotel in downtown Miami, Florida. We've got a great series of industry perspective speakers lined up, including:

  • Julie Shimer, VP/GM, 3COM

  • Kenny Van Zant, COO, BroadJump

  • David Reed, CTO, CableLabs

  • Peter Vicars, CEO, Cayman

  • John Pickens, CTO, Com21

  • Noam Bardin, President & CEO, deltathree

  • Sam Baumel, Senior Director, Hughes

  • Niko Bolas, Chairman and Founder, iM Metworks

  • Patrick Lo, CEO, NETGEAR

  • Ken Potashner, President & CEO, SONICblue

  • Sandy Teger/Dave Waks, System Dynamics

  • Anette Persson, Telia

  • Gerald Rooks, President, X-10PRO

The BBH conferences focus on the business opportunities, applications and technologies that are emerging as broadband connections to and within the home keep multiplying. Broadband Home 2001 will examine the growing role of residential gateways, new forms of broadband access and home networking, emerging home appliances and the balance between network-provided services and those offered by premises equipment. While other conferences discuss specific elements of broadband to and in the home, Broadband Home Spring 2001 will focus on making the pieces come together to create compelling applications and solutions.

We'll have a Welcoming Reception for delegates and participants on the evening of February 25th and a Conference Party the evening of February 27th. These will be great places to meet colleagues from the industry in an informal setting.

In addition to our 16 "industry perspectives" talks we'll have 24 breakout sessions, including topics like "T-commerce: Re-inventing Couch Potatoes", "Bridging Diversity in the Home" and "Consumer Trends and Business Models". The breakout sessions are arranged into five "tracks": Overview, Family Applications, Home Worker Applications, Technology and Business Perspectives.

Our Fall BBH Conference brought together people from all sectors of the industry, and from 17 countries around the globe. We project that the Spring 2001 Conference in Miami will generate even more interest.

Seating for the conference is limited. If you are thinking about attending, we suggest that you register soon. If you plan to attend and will require a hotel room, we recommend that you make your hotel reservations as soon as possible to take advantage of the special conference rate, which ends on February 5, 2000.

Visit the conference Web site ( ) for the up-to-date conference schedule. Conference brochures, registration and hotel reservations are all available online through the website.

Your Voice: Notes From Our Readers

One of our great joys in writing this newsletter is the often-impassioned responses we receive from readers all over the world. We thought we'd share some of the discussion threads from recent articles.

End-to-end IP

Our two-part article on End-to-end IP provoked a number of reader responses, ranging from one saying how well we'd described his situation to another accusing us of being anti-ATM IP bigots.

Franz Edler wrote from Austria to say that our article "has given me one of the rare moments where I find myself affirmed" and went on to say that he was "faced with a curious mind splitting regarding the value of IP networks". He said that even people working on IP data services were "very reluctant in seeing the threat/opportunity of end-to-end IP on our voice business." He clearly felt otherwise.

Another reader vigorously defended the telcos' continued use of ATM. In his first email, he wrote "To say that the ILECs prefer ATM because 'They have enormous investments in their circuit-switched infrastructure' is a rather simplistic view ... QoS is probably the reason why ILECs go with ATM. ... The bottom line is not whether we have E2E IP, is whether we will have E2E QoS!" He ended his impassioned argument with "I hope I didn't come across as attacking you personally." We try to be thick-skinned, and several emails back and forth brought us to the conclusion that our real disagreement was whether or not VoIP is or will be a disruptive technology for the LECs.

This looks like the heart of the question. If "End-to-end IP" is or may be disruptive, then incumbent telcos should be concerned; if it isn't, they've got nothing to worry about. Only time will tell.

After reading our article, Jeff Pulver asked us to organize a session at the Spring Voice on the Net (VON) conference coming up in Phoenix on March 20-23. It's called "End-to-End IP: The future of IP Communications" and is the only general session at the conference. We'll try to shed some light on the central issue: whether "End-to-End IP" has the potential to be a disruptive technology for the incumbent telcos. We'll have people arguing both sides of the issue. ( )

What Comes Next - The Network or the Gateway?

Our article on the gateway and the network also brought several email exchanges from readers.

Bruce Miller, who was writing from the user's point of view, told us he had installed a gateway with a Cable/DSL Router and added "another NIC, some CAT 5 cable" between two PCs "and allowed sharing between the systems". As he said, "I kind of have a Gateway" and "I kind of have a network". But it's missing lots of things he wants and expects. such as "real VoIP, ... connections between computer and stereo system ... common address book".

Ed Arditti of Everex Communications said "They both come at the same time IF the key piece of hardware is there. It is not an 'either/or'..."

Stefan Tordenmalm of Stockholm wrote "I think the answer depends on whether you believe the Internet will primarily stay the medium it is today, or if it will develop into an infrastructure. I believe that the Internet will develop into an infrastructure, meaning that it will carry content and services that today are carried over PSTN or cable networks. ... For the Internet to be able to carry these services and let people use them conveniently, gateways will be necessary."

We've come to the view that the network and the gateway go hand in hand. Even the simplest gateways (such as the "cable/DSL router") include at least Ethernet networking, and the newer ones include some form of "No New Wires" networking. We suspect that the gateway will carry the network into the home.

It's becoming clear that gateways exist to serve at least four needs: (1) connecting multiple PCs to the Internet with appropriate security; (2) managing and distributing audio and video content; (3) providing digital (sometimes IP-based) telephone services; and (4) providing telemetry between devices in the home and the outside world. The first two are primarily user needs, and the user would be expected to purchase the equipment. The latter two are primarily serving the needs of services providers (telephone service and utilities) who would be expected to bear some if not all of the capital and installation cost and recover it later from the services provided.

We suspect that the future of gateways has a lot to do with how they address both the user's and the services provider's needs, and how the costs get split between them.

Our upcoming Broadband Home Spring 2001 conference will have Industry Perspectives from leaders in the industry, including Ken Potashner (CEO, SONICblue), Patrick Lo (CEO, Netgear), and Peter Vicars (CEO, Cayman Systems) and will include several breakout sessions on gateways and networks. 2001 Calendar - Upcoming conferences

System Dynamics will be organizing and moderating the Broadband track at several upcoming conferences as well as organizing upcoming Broadband Home Conferences. (See the complete calendar at )

Broadband Home Spring 2001, February 26-28, 2001 - Miami, FL ( )

Spring 2001 Voice on the Net, March 20-23, 2001 - Phoenix, AZ ( )

Broadband Home Europe Summit, May 15-16, 2001 - Amsterdam, Netherlands ( )

Voice on the Net Europe 2001, June 12-15, 2001 - Stockholm, Sweden ( )

Broadband Home Fall 2001, October 30-November 1, 2001 - San Jose, CA ( )

Subscription and Copyright

If you are aware of others who would like to receive our report, please ask them to visit ( to subscribe.

To change your email address, report format, or other subscription information, or to unsubscribe, please visit ( )

Please send your comments and feedback regarding this issue of our report to Your suggestions for topics to be covered in future issues would be greatly appreciated.

Sandy Teger and Dave Waks
Sandy and Dave's Report on The Broadband Home
Originally published as The Broadband Home Report
January 21, 2001


©2001 Broadband Home Conferences, Inc.