1. Enabling The Broadband Home Sandy Teger and David Waks System Dynamics Inc. Voice On the Net Asia 2000 November 15, 2000 Copyright © 2000 System Dynamics Inc.

2. Copyright © 2000 System Dynamics Inc. Slide 2 The “Broadband Home” Initiative Joint effort between System Dynamics and pulver.com –Web site –Monthly newsletter –Conferences Broadband Home Conferences –BBH Fall 2000, Oct 3-5, San Jose –230 people,110 companies, 17 countries –All industry sectors –Industry perspectives and breakout sessions –Visions, requirements, issues Future conferences –BBH Spring 2001: February 27 - March 1, Miami, Florida –BBH Europe Summit 2001: May 15-16, Amsterdam www.TheBroadbandHome.com

3. Copyright © 2000 System Dynamics Inc. Slide 3 Conference Themes - BBH Fall 2000 The Broadband Home is “The Next Big Thing” Technology is sexy only for techies –It’s really all about applications and content Minimize customer hassle –Should be easy to learn and use –Customer needs help in installation and support We’ll grow the pie faster by working together –It’s not a zero-sum game –It hurts us all if products and services don’t work together and disappoint the customer

4. Copyright © 2000 System Dynamics Inc. Slide 4 The Emerging “Broadband Home” Broadband access to the Internet –Many choices Broadband distribution network within home –Wired (CAT 5, phone line, power line, 1394, …) –Wireless (HomeRF, 802.11, Bluetooth, …) New applications and content –Content and communications applications –Audio and video as well as data PCs and much more –Phones - voice and video –Home entertainment center and other TVs –Home stereos –Video game consoles –New Internet appliances

5. Copyright © 2000 System Dynamics Inc. Slide 5 “Broadband Home” Broadband access and in-home distribution Multiple broadband devices High speed access –Megabits: Millions of bits per second –To the home, in the home and from the home “Always on” connection –Continuous connection –From the home to the outside world –To the home from the outside - can “see” the home from the outside

6. Copyright © 2000 System Dynamics Inc. Slide 6 The Emerging Broadband Home ISP Services Cable Modem DSL Fixed Wireless Fiber Satellite Powerline Digital Terrestrial Broadband Access Home Gateway

7. Copyright © 2000 System Dynamics Inc. Slide 7 Elements of the Broadband Home Devices and appliances Home Networking Home Gateways and Servers Broadband Access ISP Services ASP Services Backbone Networks Broadband Content Broadband Applications

8. Copyright © 2000 System Dynamics Inc. Slide 8 Interconnected Industry Sectors

9. Copyright © 2000 System Dynamics Inc. Slide 9 Industry Collaboration Is Required All business sectors are inter-dependent Appliances and applications depend on one another Audio and video quality -- for telephony and streaming audio and video -- needs QoS in every element Jacques Carelman: "Convergent Bicycle"

10. Copyright © 2000 System Dynamics Inc. Slide 10 What Do People Want? Fast access to information, shopping, entertainment, education Voicemail, “follow me” service, PBX extension Video on demand, enhanced TV Personal radio and music Games and software Untethered access to content Transparency in and out of home Audio & video content

11. Copyright © 2000 System Dynamics Inc. Slide 11 Conference Themes The Broadband Home is “The Next Big Thing” Technology is sexy only for techies Minimize customer hassle We’ll grow the pie faster by working together

12. Copyright © 2000 System Dynamics Inc. Slide 12 The Dream “They walk into a store, buy a device -- fully loaded -- bring it home, plug it in, and they’re ready to rock & roll.” Dan Somers, CEO AT&T Broadband on his dream experience for consumers Fortune 10/9/2000

13. Copyright © 2000 System Dynamics Inc. Slide 13 One Family’s Experience Our “quasi-broadband” home –ISDN today Rewired for broadband in 1996 –PCs –Telephones –Audio and video Illustrates today’s realities

14. Copyright © 2000 System Dynamics Inc. Slide 14 First, Some Background Sandy and Dave –Math degrees –Assembly language programmers –Always worked in technology –Always fascinated by “the next big thing” –“Walk the talk” Dave –Hands-on –“If I can’t buy it, I’ll build it” –“Keeping it working is half the fun!” Sandy –“What can it do for me?” –“It drives me crazy when it doesn’t work!”

15. Our Quasi-broadband Home

16. Our Quasi-Broadband Home

17. Dave’s PC

18. Sandy’s PC

19. Card scanner and camera

20. Rex interface

21. Sandy’s portable

22. The old 386

23. Scanner

24. The server room

25. The Plumbing – router and hubs

26. Master LAN patch panel

27. Attic plumbing

28. Our NT server

29. Fax machine

30. Four-line phone

31. Telephone and modem wiring

32. Attic telephone wiring block

33. Room ports

34. Ports in the kitchen

35. WebTV in the kitchen

36. Master bedroom TV

37. Master bedroom jacks

38. Video plumbing

39. Attic video plumbing

40. Entertainment center

41. Video projector

42. A. Lower the Screen On the switch panel (under thermostat near bar) find the screen switch on the upper left. Push to lower the screen. It will stop automatically when the screen is fully lowered B. Turn on the VCR Find the VCR remote control (it’s labeled “RCA” on the bottom). Push the red VCR1 button to power on the RCA VCR (the upper VCR on the left). The VCR is on if you see the channel number on the right of the VCR display (the time is displayed on the left whether the VCR is on or off). C. Turn on and set up the Receiver Find the receiver remote control (it’s labeled “Denon” on the upper left). Push the red POWER button to turn on the receiver (upper box on the right). The receiver is on if you see the display lit up. Select VCR1 as receiver input device: If VCR1 is not shown on the receiver display, push the yellow VCR1 button (number “5”) on the receiver remote control. After a few seconds, you should hear sound from the loudspeakers if a video channel has been selected. Set receiver mode to STEREO - push blue STEREO button on the remote control. Instructions for turning it on

43. D. Turn on the Projector Remove the lens cap from the projector (if it is on). Plug in the projector if the line cord is disconnected (at the right rear). Turn on the projector - the switch is just above the line cord at the rear of the projector. The projector will warm up in about a minute. You will first see a test pattern, and then the video picture corresponding to the sound. If you see a blue screen without a picture, open the control door on the top right of the projector, and push the VIDEO button. You should now see the picture. E. (During daytime) Lower the Shades The room is set up with six room darkening shades. Lower them to block out the sunlight. F. To Change the Channel Use the cable box remote control to change the channel. Push the white CABLE button on the top of the remote control, and then push the channel number. Note that all channels are three-digit numbers; use 004 for channel 4. Instructions for turning it on - 2

44. Audio and video components

45. Remotes

46. Audio and video plumbing

47. Switch boxes

48. Dining room stereo

49. Dining room control boxes

50. Dining room wiring

51. AV wiring diagram

52. Living room plant lights

53. Downstairs plant lights

54. The lighting controller

55. Sandy in the garden

56. LAN card in garden

57. Wireless LAN base station

58. Rex and cellphone

59. Navi system map

60. Navi address

61. Rex

62. Copyright © 2000 System Dynamics Inc. Slide 62 The Broadband Home Much of the technology is available now -- but it’s too damn complex! Skill and time to set it up Needs sophisticated trouble-shooting skills Seemingly simple things are hard to do

63. Copyright © 2000 System Dynamics Inc. Slide 63 Industry Challenges Make it easy for the user Allow flexibility without increasing complexity Satisfy both early adopters and mass market Facilitate interworking of products and services –Needs to be “a symphony, not a solo”

64. Copyright © 2000 System Dynamics Inc. Slide 64 Home Networking Overview Key drivers –Multi-PC households –New applications - home control, appliance maintenance, distribution of phone, audio and video –New net appliances - Webpad, game console, Internet radio,... Sharing Internet access and home resources –“People don’t want a network, they want to share” Many competing technologies –Ethernet over Category 5 structured wiring –Phone line (HomePNA) –Wireless (HomeRF, 802.11 family. Bluetooth) –Powerline (HomePlug) Uncertainty as to “winners” and timing

65. Copyright © 2000 System Dynamics Inc. Slide 65 ~20 Million US Homes: More Than One PC Fastest Growing PC Segment! ~20% two or more PCs ~45% no PCs ~35% one PC 6.5M Homes have a laptop as the second PC. Source: Gary Matos, Intel

66. Copyright © 2000 System Dynamics Inc. Slide 66 ~1 Million Home Networks ~45% no PCs ~35% one PC ~1% Networked ~19% two+ PCs No Network In ‘2004, 60% of new PCs will ship with home networking. Source: Gary Matos, Intel

67. Copyright © 2000 System Dynamics Inc. Slide 67 Home Network Benefits Share: Internet –Simultaneous access from one account Printers –Print to any printer from any PC Files and Drives –Transfer files from one PC to another Multi-user Applications –Intercom, games, and digital jukebox Source: Gary Matos, Intel

68. Copyright © 2000 System Dynamics Inc. Slide 68 Source: Survey of AnyPoint Home Network purchasers, 6/99 Internet Source: Gary Matos, Intel Why Do People Buy a Network?

69. Copyright © 2000 System Dynamics Inc. Slide 69 How Are People Using It? Source: Survey of AnyPoint Home Network purchasers, 6/99 Source: Gary Matos, Intel

70. Copyright © 2000 System Dynamics Inc. Slide 70 Software ‘No Network Admin.’ Easy to Install Easy to Install Easy to Configure Easy to Configure Intuitive to use Intuitive to use Hardware ‘No New Wires’ Wireless Wireless Phoneline Phoneline Powerline Powerline Source: Gary Matos, Intel A Network Designed for the Home…

71. Copyright © 2000 System Dynamics Inc. Slide 71 What is ‘No New Wires’? Wireless –Ideal for Notebook PCs –Offers best mobility; range = 150’ –More expensive than phoneline Phoneline Phoneline –Perfect for Desktop PCs –Most [US] PCs are near a phone jack –Fast and value priced! Powerline Powerline –Great for Home Network Appliances –Electrical outlets are everywhere –Available ‘2001 Source: Gary Matos, Intel

72. Copyright © 2000 System Dynamics Inc. Slide 72 Home Network Shipments Source: Intel HNO – Q2’00 World Wide Nodes by Technology

73. Copyright © 2000 System Dynamics Inc. Slide 73 Wireless Networking Very attractive home networking solution Too many competing flavors Reconcile home and office –Like to use same wireless LAN in both Reconcile personal area network with home network –Will Bluetooth work with other wireless LANs? Broadband home is more than PCs –Need to provide adequate bandwidth –10 Mbps for PC-to-PC communications –25 Mbps for video distribution

74. Copyright © 2000 System Dynamics Inc. Slide 74 Home Networking - Our Forecast Near term (next year or two) –Different markets will develop differently –New construction - Fast Ethernet over Cat 5 –Existing MDUs: HomePNA for vertical risers, Bluetooth within unit –Single family: Wireless (probably 802.11b) and HomePNA Longer Term (two years plus) –HomePlug and HomePNA for backbone with wireless within rooms –802.11a (25 to 55 Mbps) for integrated distribution of data, audio and video within home

75. Copyright © 2000 System Dynamics Inc. Slide 75 Home Gateway - Overview Simplifies in-home broadband distribution Hides complexity Platform for new services No clear definition of “gateway” requirements and features Many vendors developing early products for DSL and cable

76. Copyright © 2000 System Dynamics Inc. Slide 76 Home Gateway - Components Broadband Modem - Cable or - DSL or - … Cable/DSL Router - Router - NAT, DHCP - Firewall - Ethernet hub Home Networking - HomePNA or - HomeRF or - HomePlug or -...

77. Copyright © 2000 System Dynamics Inc. Slide 77 Home Gateway - Integrated Core - Router - NAT, DHCP - Firewall Broadband Modem - Cable or - DSL or - … Bridge to multiple transports - Ethernet and - HomePNA or - HomeRF or - HomePlug or -... Applications - Home web server - Media server - Telephone services - Home security and control -...

78. Copyright © 2000 System Dynamics Inc. Slide 78 Integrated versus Component Gateway Component gateway –Great for installed base but –Integration problems –Who ya gonna call? Integrated gateway –Put it in the closet and forget about it Source: Peter Buechler, Motorola

79. Copyright © 2000 System Dynamics Inc. Slide 79 Set Top Box as Gateway  Coax  Wireless  (1394 or other)  MediaWire Home Gateway Bedroom Home Office Living Room Bedroom Source: Peter Buechler, Motorola

80. Copyright © 2000 System Dynamics Inc. Slide 80 Home Gateway Evolution First generation gateways –Broadband (cable/DSL) modems with built-in home networking for Internet sharing –Locally powered multi-line Multimedia Terminal Adapters Will soon evolve into full-fledged residential gateways –Network-powered integrated voice/data gateways –Intelligent device and service management –Modular architectures With multiple form factors –Outside the house –Stand-alone inside the house –Integrated into the set-top box Source: Peter Buechler, Motorola

81. Copyright © 2000 System Dynamics Inc. Slide 81 User Needs Drive the Home Gateway

82. Copyright © 2000 System Dynamics Inc. Slide 82 Telephony-specific Needs and Features Sometimes user needs are in conflict –“Support my existing phones and phone-connected devices such as fax machines and PCs” versus –“Provide new features not possible with today’s phones” …and result in different vendor responses –connect to existing house wiring, phones, and modem- equiped devices versus –connect to new phone devices in new ways Service providers influence gateway telephone features –Main market for many gateway vendors –Gateways packaged as part of their service package –Their needs and their perception of end user needs influences vendor implementation of features