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Aiming to shape the "connected home"
Linking consumers' phones, TVs and the Internet with faster broadband is telecoms' goal for homes of the future.
By Kimberly S. Johnson
Denver Post
Sunday, April 6, 2008

Qwest chief executive Ed Mueller talks enthusiastically about the day when a consumer's phone, television, e-mail and security services are all interconnected.

"Qwest is the broadband backbone," he said during a recent interview.  "We see ourselves as the pipe to the home."

Across town at Comcast Colorado, engineers are looking for ways to take full advantage of the company's fiber network, whether by adding a caller ID feature to a TV screen or letting users view the same video-on-demand content on multiple screens.

In Douglas County, executives at Dish Network are preparing for a nationwide rollout of a mobile TV service that allows users to take their Dish content anywhere, along with a more powerful version of video-on-demand that sends movies over a broadband connection to a set-top box.

And at nearby Liberty Media Corp., the holding company that owns TV networks Starz and QVC and a large stake in DirecTV, planners are looking ahead to a new digital-consumer environment that will help shape future investments.  They've already put their stake in digital movies with the Vongo download service.

These Colorado companies among others are playing a key role in shaping the "connected home" of the future.  From providing a central broadband connection, to programming a DVR with a cellphone, or downloading a movie to a portable device, the ultimate in convergence is coming.  In some cases it's already here.

The definition of a connected home varies and is colored by each company's particular focus.

For now, it's not yet the futuristic smart home in which voice-activated kitchen appliances alert you when the milk is gone.  Instead it's based on the interconnectedness of a host of entertainment and productivity devices.

"From my point of view, it's where you have the best TV experience possible, because we've provided you with all the content, regardless of where it comes from," said Jessica Insalaco, senior vice president and chief marketing office for Dish Network Corp.  "Also, we would have figured out a way to release you from the confines of your home, so you don't have to stay in one room or in the house."

Limited demand?

But there may be demand for these features from only a small segment of the population, said Bruce Leichtman, president and principal analyst for Leichtman Research Group.

"Certainly there is a segment that wants the concept of 'anytime, anywhere,' but generally when we look at that segment it's younger men," he said.  "It's not about the connected home per se, it's about utility.  What's the benefit to customers?"

Nonetheless, Colorado companies are eager to pursue the concept.

Qwest is in the midst of a transformation from being a tried-and-true Baby Bell to a "distribution" company.  It wants to partner with other companies to offer ancillary services such as DirecTV that can take advantage of the Qwest broadband network.  Still, Mueller wants all those companies working in a way that doesn't confuse or frustrate the consumer.

"It's all about the customer experience," said Dan Yost, Qwest's executive vice president of product.  "We're really trying to enable the customer experience.  We're working with providers of those types of services to make it easy to access that."

But that level of connectedness is not without stiff competition.  Qwest plans to spend $300 million this year to upgrade its network.  Comcast, the nation's largest cable provider, with 800,000 Colorado subscribers, has begun rolling out enhanced services that integrate its video, Internet and phone offerings in several markets.

Features include caller ID information appearing on a user's TV, the ability to start a video-on-demand program on one TV and finish viewing it on another, and new download speeds of 50 megabits per second.  Comcast last week launched its extreme-high-speed service in the Minneapolis-St. Paul area, where Qwest has a major presence.

"A truly connected home starts with the fully scalable, reliable fiber network we have.  Our competitors ... for the most part ...  are still dealing with (copper wire) to the home," said Mark Hess, Comcast Corp.'s senior vice-president of product and business development for products.  "It's all the ways products come together to be a singular service."

Retaining customers

At Liberty, any effort to increase Internet speeds is an opportunity to add and retain customers who are fond of their networks.

With advances in broadband capacity to homes, those who already are plugged will get even more opportunities for interactivity between services, such as e-commerce, TV-commerce or games, said Bill Fitzgerald, senior vice president for business development for Liberty Media.  "There are a host of things still in development today."

For Dish Network, last year's purchase of Sling Media by its sister company Echo Star Corp. will allow it to integrate Sling's place-shifting ability into TV set-top boxes.  Combined with an IP offering that lets users search for movies and other content Dish has stored on its network, the nation's second-largest satellite company plans to better compete with cable.

"We have all these entertainment options and we help them watch them anywhere in the home, and Sling allows you to take it out of your house," Insalaco said.  "I think for a lot of people, the ability to place shift is very unique.  In 18 months, we're going to see people with more mobile, live-TV-viewing capability."

Leichtman contends that all of these efforts are a way to create "stickiness" for the slice of consumers that are interested in new digital services.

"None of this is about everybody," he said.  "It's about segments, about creating the glue to those segments (and services) to keep people from ever thinking about leaving."

Pushing broadband

When Starz launched its Vongo movie-download service more than two years ago, it was a way of beginning a conversation about the concept of connecting a home using a single broadband connection, said Bob Greene, executive vice president for Starz's advanced services division.

Now, faster broadband speeds from companies such as Qwest and Comcast make Vongo easier for consumers to use.

"They had to get in the game," Greene said of Qwest's latest efforts. "That's a big change from two years ago. . . . Speed alone has increased.  That starts to allow the (Vongo) platform to truly deliver content in a meaningful way."

Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com

http://www.denverpost.com/business/ci_8818166