Homeowners need more and faster Internet access in the home, forcing competitive builders to wire for broadband.

As a homebuilder, you are no doubt offering home-technology packages that provide wiring drops for video, telephony and data. While this is a great customer convenience and competitive advantage for you, data wiring is most likely an option and outlets are typically installed in only a few rooms.

That will soon change. The rapid growth of broadband, the increasing use of broadband for music and video content, and the rapidly-growing interconnections between PCs and consumer electronics equipment suggest that whole-house structured wiring will soon be the norm in new construction, and not reserved for higher-end custom homes.

This means two things for you as a builder. First, it's time to start thinking on a larger scale when it comes to wiring a house. Second, it means the opportunity for you to sell more home-tech features to take advantage of that capacity. But the first trick is to convince the homebuyer to invest in the appropriate infrastructure.

Home PCs, Internet Access and Broadband

The need for future-proofing when it comes to home technology is being driven by several trends simultaneously, starting with the widespread penetration of home PCs, Internet and broadband. Today, more than two-thirds of U.S. households own PCs, and most own more than one. Nearly every PC-equipped home has Internet access, and more than a third of them now use broadband.

"Broadband" is often synonymous with "high-speed Internet" connected to PCs, although it will soon be much more than that. In North America, cable modems serve nearly two-thirds of broadband homes; digital subscriber line (DSL) serves most of the remaining homes, with a few served by satellite, fiber or wireless. In most other countries, DSL has the lead. In a few, fiber is further ahead.

Broadband is starting to become a utility like water and gas. Approximately 25 percent of U.S. homes and over 40 percent of home Internet users now connect by broadband. On current trends, half of home users will connect with broadband by the end of 2004, and some pundits are writing the obituary for dial-up services.

Cable operators and telephone companies both offer broadband services, but have sometimes been reluctant to have these services available when the first houses are sold, waiting for enough homes to be occupied to install the necessary equipment. Fiber to the home (FTTH) is the best form of future-proofing—some developers are installing a fiber infrastructure in their communities to avoid digging up streets for a long time.

Home Networking Is Hot

The majority of broadband homes have more than one PC, and families want to share their broadband connections so that parents and children can be online at the same time. So it's no surprise that home networking is suddenly hot. The number of U.S. at-home workers has increased by 100 percent in the last five years, requiring broadband and a home office space for working effectively.

Children increasingly want and need Internet access for school work, at the same time that their parents are online. The broadband connection that comes into the house needs to be distributed by a home network to children's bedrooms as well as the home office.

More families these days are inclined to bring entertainment to the home, rather than going out to it. This has resulted in the growth of home theater and home entertainment spaces—increasingly with personal video recorders (PVRs), high-definition television (HDTV) and flat-panel displays (FPDs).

Everything Becoming Digital

Broadband is now moving beyond PCs and data to include all forms of home entertainment and communications. Everything is moving from analog to digital, and the current wiring in new homes needs to be supplemented by wiring appropriate for the future.

We are still at the early stages of the digital transition. Telephone companies are moving quickly to "voice over IP" (VoIP) -- a form of digital telephony. Congress has mandated the end of analog television over the next few years. By the end of this decade, most entertainment and communications will be digital. Broadband "fat pipes" will deliver these services to the home, and home networking will distribute them throughout the home.

As with electricity in its early days, the growth of broadband is creating a new appliances industry. In the past year, many digital media adapters (DMAs) have been introduced. These devices plug into home networks and carry audio, video and/or photos stored on PCs to the audio and video "stacks" (the multiple boxes including DVD players, TVs, A/V receivers, etc.) in other rooms of the home.

Networked Entertainment Needs Wires in Place

Just as the computer experience takes place in multiple rooms, so does entertainment. The new generation of digital audio systems is designed to operate over the same wiring and networks as PCs. The PC and consumer-electronics industries are working together to develop standards for converged audio and video networking.

Home networking is the key to this rapidly developing digital home. These new digital services will be carried throughout the home over the same networks installed today for PCs and data services.

The new digital devices will connect over Category 5e or 6 wiring. Much of the wiring installed for today's analog TVs, telephones and loudspeakers will probably no longer be needed a few years from now.

Wireless networking ("Wi-Fi") is a great way to get data to portable devices, but is no substitute for structured wiring. It is subject to disruption by walls, floors, ducts, etc. and it does not have enough bandwidth for high quality.

What This Means for Builders

Broadband is addictive. Very few homes with broadband switch back to dial-up. As they look for new homes, families that already have broadband will ask about broadband availability and look for built-in networking. Builders will find it increasingly difficult to sell homes in developments that don't have broadband available on day one.

The digital transition suggests the need for additional wiring in the home. Although wiring can be added later, it's simplest and cheapest before the walls go up. To allow homebuyers to connect their TVs, audio systems and telephones to the network, builders should provide at least one additional Category 5e cable to any location where they would ordinarily run RG-6 for satellite or cable outlets, to any location where they would run Category 3 or 5 for telephone outlets, and to any location where they would run speaker wiring for wall-mounted loudspeakers. Category 5e cabling will provide enough network capacity for many years to come; it should be professionally installed following EIA/TIA 570 standards, and terminated in a "structured cabling enclosure."

Two other emerging broadband/networked applications will be appealing to homebuyers over the next couple of years. Internet telephony operating over broadband enables inexpensive phone service—companies are already offering unlimited local and long-distance service for about $35/month. Power companies will soon roll out energy-management applications which both save money and help the environment.

Home networking should be a profit opportunity rather than an added cost to the builder. The secret is to sell according to user needs, the same way builders now sell customization options like upgraded kitchen cabinets and hardwood floors.

Targeting Lifestyle Needs

In order to know the broadband needs of your homeowner, builders need to ask questions about how it will be used in the home, by whom, and for what. Some questions to address include:

• How many computers do they already have? What rooms will they go in? What do they expect to add over the next five years?
• Does anybody work at home, at least part of the time?
• Do kids have computers and/or online game machines like Xbox and Sony PlayStation? Where will they be used?
• Where do they watch TV and/or listen to music? Is this primarily in one room, or several places in the house?
• Do they want to make provision for networked cameras for a remote view of the house, or to be able to change the temperature settings while traveling?