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 (Figure 2). 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."

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

• Parks Associates' consumer research indicates that new home buyers are more receptive to pre-wiring their homes with an advanced network infrastructure. For example, 37% of consumers planning to move into a newly constructed home in the next 18 months indicated they would have their homes pre-wired with structured wiring (from Parks Associates' Electronic Living @ Home II survey).

• Not surprisingly, consumers who own PCs or who are considered entertainment buffs (owning high-end equipment such as home theaters, big-screen TVs, and DVD or laserdisc players) are more likely to want the advanced network infrastructure. These consumer segments continue to grow. Parks Associates' research indicates that PCs are now found in more than 50% of US households (households with more than one PC account for 14% of all households). Home theater penetration sits near 20%; big-screen TVs are in more than one-third of households; and consumers tell us that they want even more entertainment applications in the home.

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.