High-bandwidth services and home networking, to a large extent, are joined at the hip in today's marketplace.  According to Hongjun Li, director of research and senior analyst for Dallas-based Parks Associates, which specializes in home networking research and consulting, last-mile broadband access to the home and in-home networks are driving each other.

"External networks are the conduit for the delivery of services.  If there is inadequate in-home networking infrastructure that can distribute external services to the appropriate devices, the demand for good external networks to the home will be reduced.  They drive each other," Mr. Li told LMTR.

Parks Associates reports that home networking, while in early-adopter stages, will draw considerable consumer interest through various income levels.  One sign of this appeal is the rapid adoption of new technologies in the home.  A recent Parks Associates survey found that 15% of U.S. households said that if money weren't an issue they would buy a larger TV, and 10% said they would ass a DVD system.  Mr. Li said that as consumers bring these technologies into the home and have access to increased bandwidth along the last mile, they will want to connect these devices and receive new services.

"Once you have fiber, you are going to have a lot of bandwidth that you can use for high-speed Internet access, digital video, and advanced phone services.  Once you have high-speed Internet service and you have multiple PC's, you might want to be able to surf the web on any PC.  That's where the demand for data networking will grow," Mr. Li said.

"If you have a DVD drive on your PC, you may want to watch a movie on your TV instead of on your computer screen.  Then you need to network your PC to your TV,"  he said.  "That's another application of home networking.  Fiber to the home will allow a lot of high-bandwidth services to the home and will serve as a driver to home networking," he added.

Parks Associates believes that by 2004 about 11.9 million U.S. households will have computer networking capability at home through a local area network typically connecting two or more computers and sharing peripherals.   That compares with some 2.5 million such U.S. households in 1998.   Telecommuters, home businesses, and early adapters are most likely to be wired at home, according to Parks Associates.

"At this point, I don't think I can say which specific platform will be the winner.  Probably they will all exist in some form," he said.  Parks Associates is touting the concept of a standardized residential gateway in the home to connect devices, whether it is a wireless or wireline local are network.  The gateway would be able to decipher the varying protocols and data into a seamless operation.

For instance, such a gateway would be able to accommodate digital and analog modems.  Before the residential gateway takes hold, various issues will need to be resolved.  a new consortium, the Open Service Gateway Initiative, is expected to facilitate cooperation among cable TV companies, telcos, utilities, and other service providers.

"Ideally, there should be a whole-house gateway that works with everything, but because of many technical and business issues right now, I don't think there's a market for it," Mr. Li said.  "There are too many issues that need to be solved first."

From the Article "Maturing 'Last Mile' Shifts Focus to Home Networking" by Contributing Editor Marvin V. Greene