Video Conferencing and HDTV Key Residential Broadband Market Drivers
By Julie Dodd Thomas, Cogent Consulting

You might remember when the $1200 "radar range" first made its appearance in homes. It did not take long for businesses and users to see the many advantages of microwave cooking. Interest sparked. Cookbooks soon proliferated, along with cooking schools. Users doubled, tripled, quadrupled until today no home or office building would exist without at least one microwave oven. The price of a microwave oven is significantly lower now and cooking instructions are on every box.

And so it will be with broadband in the 21st Century. Similar to the microwave, the desire for convenience and speed, along with the instructional information provided, will help propel us into a nation of broadband users. However, a larger population than the 15% of residential homes, who will have broadband access by the end of 2002, is needed to create this upward spiral. Broadband will need to deliver more than music and games and needs to develop and market new applications such as video conferencing and high-definition TV (HDTV).

Today, fast Internet access is just not a good enough reason for many people to spend $40 a month. But it is only a matter of time when applications accessible only through broadband begin to drive the market. "The 15% of our population who will have broadband access by the end of 2002 will probably grow to 30% by the end of 2004," according to Nazmin Alani, Vice President, Gartner Consulting. And with it will come more companies providing more products, more games, more sophisticated video conferencing equipment and HDTV. The current $40 per month charge to deliver high-speed access to the Internet and e-mail will drop as the value of products and services increase.

If Napster alone is responsible for a significant number of DSL and cable modem sales, as a recent Wall Street Journal article surmised, can we not expect more entrepreneurial upstarts to follow suite? And it is the promise of future returns that will motivate residential and building owners to buy broadband access.

HDTV

First, residential and commercial building owners must understand the value of broadband to see why they should differentiate their buildings as those most desired in the 21st Century. As HDTV and games are being developed, the music loving Napster crowd will become apartment dwellers, homeowners and business people with demanding expectations. The Monday night football devotees will join them as HDTV develops. Broadband will explode.

In Ft. Lauderdale, on April 1, 1998, ECI Telecom, Inc announced their Hi-TV system would carry the opening day game between the Texas Rangers and the Chicago White Sox. Using MCI's broadband ATM network, the signal was carried from the ballpark to a high-definition test station in Washington D.C. At the time, the FCC had an aggressive schedule to convert analog TV signals to digital. But on November 8, 2001, the FCC released new deadline dates for digital signaling. By April 1, 2003, a HDTV station must provide digital signals during 50% of the scheduled day. By April 1, 2004 they must broadcast 75% in digital format, and by April 1, 2005, they must be 100% digital.

In preparation for digital signaling, TV retailers are promoting digital TV's. A Sony 34 inch, flat screen TV goes for just less then $3,500.00. RCA has a 61-inch screen for just under $7,500. Both TV's are able to receive DIRECTV's digital signal distributed by satellite. However the TV industry is challenged on how best to deploy high-definition TV. Today there are approximately 600 million television sets in the world and only approximately 70% are in color. Much like the challenges presented when black and white TV converted to color, the FCC sought a simple standard. They requested proposals and received 23 in 1988. By February of 1993, the FCC decided on the technology and formed the "Grand Alliance", composed of numerous TV and technology manufacturers, to decide upon the standards.

Analog transmission of "terrestrial TV" uses a 6 MHz channel. Digital high-definition TV requires approximately 18 MHz channel capacity. Kids want interactive games and interactive TV participation. Broadband capacity is capable of interacting with TV transmission. Nintendo, among other game developers, is ready. Already new games bought can be used with a broadband access line to accommodate multiple players (for greater detail see: Internet Gaming: Understanding the Attraction, on page XX of this issue).

Residential Video Conferencing

Broadband access is not just for fun and games. Videophone calls, accomplished using broadband access, appeal to college students away from friends, families who desire a visual interaction with each other and the disabled.

By using a videophone and voice and video over IP, there is no per call usage expense. Videophones vary in price from $1,000 to $1,500 each. A less expensive solution is to buy a PC camera with a price of $30 to $100 and pay phone charges for the audio portion of the call. Like with early microwaves, no "how to" books exist for home video conferencing and instructions don't come with a broadband line.

Yahoo Messenger and Microsoft NetMeeting are two software programs that enable video conferencing using a PC camera. Innomedia (www.innomedia.com) produces and distributes IP videophones. A videophone makes home video conferencing simple. No PC or call facilitation software is needed. The caller enters known numbers into the on-screen phonebook included for speed dialing. If using a gateway, the caller dials an extension phone number. The videophone may also be used for non-video IP calls. Several locations may be linked using a bridging device like CUSeeMe's Conference Server, Accord's MCU or Radvision's MCU. Any of the end locations may have continuous presence or voice-activated presence modes.

The growth of broadband access lines may have slowed some. Technology improvements, government intervention and market needs will impact the speed of market acceptance. The maturing desires of future buyers will impact demand. While it took the microwave fifteen to twenty years to become fully integrated into almost every property, time marches more quickly today than in the 1970s and the promise and payoff of Broadband is far more evident than were the benefits of the microwave. Before we know it, a dwelling without broadband access will be considered outmoded, soon to be obsolete.