The True Killer Application for Broadband Local Access 

If we could have harnessed the energy exerted over the past decade towards identifying the killer application for broadband local access, we might well have been able to reduce our dependency on fossil fuels and avoided the current gas crisis. The search continues, as broadband proponents try to identify that elusive single application that will push broadband access lines, especially residential lines, towards that golden arch nirvana, "tens of millions of lines served".

Streaming media. Interactive web. Edutainment. Video on demand. It's all of these, yet no single one of these. Enterprises and savvy small and home businesses already know the answer. Shared network access.

A Definite Market
It's too obvious an answer, too simple a market to exploit, and too easy to dismiss. Skeptical? Okay, let's look at the residential market and other media. After Alexander invented the phone, folks of relative wealth had at best one phone in a household. Residences shared "party lines." Switching comes along, telephony evolves, and over time, the phone becomes a household appliance for average income families. 

Today, phones are fixtures in the majority of homes in the U.S., regardless of income level. Over time, one phone per residence isn't enough. Families acquire multiple phones and add line extensions-shared access. Fax, Internet, and personal wealth enter the picture. Technically advanced households today have primary and secondary voice lines, fax and internet modem lines, and hybrids therein-shared phone networks.

Not convinced? When cable first arrived, the majority of households connected one TV. More than half the households only had one TV. How many homes today have multiple TVs and multiple cable taps from the same coaxial drop at the curb? And how many have now added high-speed Internet to their home cable "network", or hope to do so in the near future?

Still not convinced? Sure, we're talking about access lines for Internet-just a few PCs per consumer household, telephony alternatives over DSL and Cable are immature, LAN technology is complicated and intrusive for typical households. So the potential consumer market doesn't justify an investment in residential LAN as a service, right? Maybe not. 

Technically Advanced Families
Recent Yankee Group survey reports that the technically advanced family (TAF) is one of the fastest growing consumer segments in the US. According to the 1999 Holistic Consumer TAF Report, a technically advanced family is one with greater income ($69,000 per annum compared to $45,000 overall). Ninety-nine percent own at least one PC, and better than half of these families own two or more PCs. Nearly three-quarters subscribe to an on-line service. Of the 110 million US consumer households, an estimated seventeen percent or nearly 20 million families are technically advanced. 

Another thirty-three percent are "near" technically advanced (exhibiting most of the aforementioned characteristics). Combined, these families account for over eight percent of the PC purchases last year. They are also early adopters, and own more laser printers, laptops, digital cameras, and scanners than average families. They gobble up calling features. Most importantly for service providers, they are three times more likely to want broadband access than the average household. 

Technically advanced families are educated, relatively unafraid of technology, and typically enthusiastic consumers of services and new technology. They are driving the DVD market, and spending hours on the Internet. They appreciate streaming audio and video, download MP3s, at least know about Napster, and are more than willing to buy the broadband promise of video-on-demand, High-Definition TV and HDTV-based computing. They are typically multi-phoneline households.

And this last factoid is exactly why shared access is a green field of opportunity for CLECs. Technically advanced households today have two, three, even four phone lines for fax, voice, and Internet. The multi-PC homes utilize multiple phone lines for slow, laborious Internet access by each individual PC. The economics for broadband access prove in pretty fast for such households, especially if you can deliver voice over broadband. You are leaving money on the table-worse, you are leaving a revenue stream in the pockets of incumbents-if you don't avail yourself of the opportunity here. 

In fact, you can amplify your ROI for one of the most costly aspects of deploying DSL-the truck roll-by offering to connect multi-PC family households over a residential LAN to a broadband Internet connection. Let's visit today's DSL installation, fast-forwarded through the arduous and frustrating process of getting a pair and splitter from an incumbent. 

Today, you offer high-speed DSL access, an Internet connection, and perhaps leased equipment for a monthly fee, and a one-time installation. You send a craftsman to install a DSL modem and verify Internet access for the customer. Today, the craftsman often brings a laptop, then connects to and configures the DSL modem. Satisfied the connection is working, this may be the end of the install. In some cases, the craftsman may assist the customer in connecting a PC in the same room to the DSL modem using Ethernet. Maybe the craftsman shows the customer how to logically add additional PCs (using DHCP for the Ethernet LAN, for example), but he or she doesn't get further involved in creating a residential LAN.

Making it Work 
Now for the alternative scenario. Your expanded service portfolio still includes high-speed DSL connection and leased equipment, plus, for an additional installation fee, residential LAN installation. Use your marketing collateral and web to convince the technically advanced family of the economies of substituting a single broadband connection for all but a primary phone line (especially true if you're offering voice over IP service). Your marketing emphasizes that this one-time service makes it as convenient for the family to add PCs or move them about the home as they would an extension phone. No additional phone line installs, monthly fees for low-bandwidth modems, or lame "Internet Call Waiting" workarounds to busy signals. 

To create the residential LAN, your craftsman installs Home Phone line network interface cards on household PCs and connects these using the existing phone wiring in the home to the DSL modem or media-conversion hub. He's visiting the home to install the DSL modem anyway. Adding LAN installation is convenient for both you and the customer. (I choose home phone line networking over traditional Ethernet, wireless LAN, and home power line networking as an example. I'll examine the pros, cons and costs of deployment of each in a future column). 

Providing technically advanced families with a residential LAN household may provide additional recurring revenues as well. Multiple PCs are immediately connected through your DSL and Internet service-this alone may drive the household to a premium rate service faster. If you offer IP and managed services, you may be able to sell or manage a firewall. Once you've entered the household as a provider of high-speed data, you have the opportunity to offer voice. If you've deployed a scalable LAN solution (e.g., 10/100 Mbps Ethernet or Home Phone line network), the household is "pre-wired" for future VDSL-based services. 

There's no magic in this formula. Look at how incumbents have expanded their original voice mail offering to accommodate smart households-multiple mailboxes, individual greetings. Incumbents understand the single most important aspect of the residential market. It's not just one line, to just one person. It's shared access for the entire household.

David Piscitello is president of Core Competence, Inc., a network consulting firm and founder of The Internet Security Conference.