Comcast, Verizon Pace Charge Into Connected-Home Services

Eric Bruno, VP, products, Verizon

Eric Bruno, VP, products, Verizon

July 1, 2011 – The emergence of a technical foundation for delivering consumer-friendly connected-home services is prompting Comcast, Verizon and what promises to be a growing stampede of other network service providers to finally pursue this long-discussed opportunity in earnest.

Both Comcast and Verizon are launching cloud-based, video-rich services that feature ease of use, service configuration flexibility and the promise of extensibility as ever more devices pegged to connected-home wireless telemetry standards enter the retail market. “What had to happen to make this possible is a lot of collaboration throughout the connected-home ecosystem,” says Eric Bruno, vice president of product management at Verizon.

The competition promises to be fierce. While Comcast is betting on the attraction of a $39.95 monthly service that delivers multiple features beyond home security as a better deal than a similarly priced security-only service from a third-party supplier, Verizon is launching at a $9.99 monthly rate with the primary goal of broadening the appeal of its service portfolio, Bruno says.

“This is about getting engagements with customers and keeping them,” he notes. “It’s not about driving new business revenues.”

Comcast was first out of the gate with what it’s calling Xfinity Home Security, which was launched in Houston last year and was recently extended to Chattanooga and Nashville, Tenn., Jacksonville and Sarasota/Naples, Fla., Philadelphia and Portland, Ore. with plans to continue adding cities on into next year. The new Verizon Home Control service, which was first tested with company employees in New Jersey, is now rolling out across all the carrier’s territories.

Bruno says Verizon for now will only offer the service to its broadband-connected customers but will begin offering it to all broadband households in its service areas in the year ahead. Comcast already is offering the Xfinity Home Security service to any household in its service footprint that has a video-capable broadband connection.

The availability of compelling solutions that at last allow network service providers to get comfortable with offering a connected-home service will quickly drive such offerings into the mainstream, predicts Kurt Scherf, vice president and principal analyst at Parks Associates. This marks a sea change in a business that up to now has been shaped by consumers’ purchasing fairly expensive equipment and contracting with specialists to set up security or other niche services.

“According to our research, by next year 50 percent of home networks will be deployed by network service providers,” Scherf says.

Xfinity Home Security

A demo showcasing Comcast’s new Xfinity Home Security service at last month’s Cable Show in Chicago illustrated how different this new type of service will be from previous versions. As described by Mitch Bowling, senior vice president for new businesses at Comcast, the use of broadband connectivity rather than phone lines to support home security brings video camera surveillance as well as sensor-based monitoring of entry points into play. And the applications extend well beyond home security.

“That’s really the power of the system,” Bowling says. “It’s everything you’d expect out of a professionally operated home security product. But it’s really more than home security.”

He enumerates: “It has lighting control, thermostat control. We have video you can view from inside the home or outside. There’s a very simple rules engine where every customer can customize the system to their own needs.

Rules can be written to trigger action on an event basis – when the door opens engage a video camera; on a scheduled basis – turn on the lights at 7 o’clock, and on a non-event basis – send parents an email or text message if the door doesn’t open when the kids are scheduled to get home from school.

“There’s also an energy savings aspect to this,” Bowling adds. “You can configure the thermostats as you would a normal thermostat to go to 68 degrees at 7 o’clock and then go to 65 at night. You can write a rule that says, ‘When I arm my system because I’m leaving the house, lower the temperature.’”

With cameras and video, of course, any Web-cam like app, such as nanny-cam, is doable. But there will soon be more advanced capabilities available when Comcast introduces cameras for the service that can be remotely controlled or even programmed to automatically follow a moving object.

“We have development in our labs with cameras that are pan-tilt-zoom and which you can trigger off motion,” Bowling says. “That’s in the very, very near future. It’s a very new product. The improvements or enhancements will be pretty common over the next several months.”

The Xfinity Home Security service runs on the iControl OpenHome platform, which employs secure servers to communicate with devices in the home under the control of a touch-screen user interface on a small wall-mounted controller. In Comcast’s case the controller, along with supporting home management, runs widgets offering weather, news and sports updates and other apps.

Customers can access the service remotely through the UI on the Web and various handheld devices. “Anywhere in the world where you can access the Internet, you can pull this [UI] up and check in on your home, the history of events, any saved video,” Bowling says. Two-way wireless connections in the home employ Wi-Fi for video and the ZigBee home management communications protocol for telemetry.

iControl Networks, with $50 million in new investment support from Comcast’s capital arm and others, is expanding its platform capabilities in home energy management. “By layering energy management on top of an interactive home management platform, our service provider partners will be able to offer intuitive ‘green home’ value-added features to their customers,” says Paul Dawes, co-CEO of iControl.

Comcast appears inclined to go in this direction. “These additional funds put iControl in a position to offer energy management as a value-added service to its existing home security solution, and provide iControl’s deployment partners the full range of broadband services they want to offer consumers,” comments Louis Toth, managing director of Comcast Ventures.

In addition to the $39.95 monthly charge Comcast customers pay a one-time installation and equipment fee, currently discounted to $199, that includes the gateway controller, four window or door sensors, a motion sensor and key fob. “If you think about traditional home security products, we price this product right in competition with those, but you also get all the other features we’ve talked about,” Bowling says.

Verizon Home Control

While there’s a big difference in the monthly fee, Verizon’s Home Control service also offers a wide range of capabilities using cloud-based intelligence and applications in conjunction with a controller gateway that connects wirelessly to auto-discovered devices throughout the home. In both cases, the goal is to make things as simple as possible for end users, including avoiding overwhelming them with options they may not be interested in.

Verizon takes this simplicity approach to the level of offering customers two versions of the service separately or in combination at the same basic monthly servicer rate. One service kit, with a start-up fee of $99, takes care of home security and includes the gateway. A second kit devoted to energy management carries a start-up price of $129.

Bruno says the two taken in combination at a start-up cost of about $200 enable use of a wide variety of peripherals that can be added to greatly expand the range of service capabilities. The range of peripheral options is maximized by virtue of the gateway’s support for both ZigBee and the competing Z-Wave protocol, he notes.

“We conducted a substantial amount of consumer research to determine what the optimal service would be,” he says. “That’s how we came up with the idea of offering separate kits.”

Details of the installation process, which includes the option to self-install, select a qualified third party or use Verizon’s chosen installation partner, also reflect this attention to consumer research, he adds. “We found people don’t want to sit through an eight-minute instruction video,” he notes.

Verizon has tailored the platform to take advantage of its other services by integrating the user dashboard with smartphones and FiOS TV. A specially designed touch-screen interface for smartphones greatly simplifies user access to different camera views, thermostat readings and other metrics.

The platform, much like Comcast’s rules-based capabilities, allows users to set up automatic modes of operation, Bruno says. “For example, you can set a ‘good-night’ mode where the lights are turned out, thermostat is turned down, door are locked, etc.,” he says. “You can set a mode that pre-determines what the cameras capture at different times of day and in different situations. It’s all integrated in the cloud and accessible from anywhere.”

Verizon has also taken pains to make the metrics obtained from the home monitoring system more useful through analytic functions offering practical guidelines. “We asked ourselves, how can we make energy management more compelling, since people reading meters don’t necessarily know what the implications are,” Bruno explains, noting that recommendations on how to cut the power bill aren’t possible without direct tie-ins with energy suppliers.

“So we analyze the readings and suggest what the customer might do to lower their carbon footprint,” he says. “We can’t say what the precise impact on the utility bill will be, but we can say if you reduce your carbon footprint you’ll likely reduce your bill.”

Verizon has tapped a number of partners, including Motorola-owned 4HomeMedia, to build its service platform. Like Comcast with iControl, Verizon is an investor in 4HomeMedia.

A Push to Reduce Chaos

While there’s no doubt the floodgates have opened for network service providers in the connected home space, there’s still a lot of chaos ahead before the market starts to settle out with best practices, common interfaces and a broad enough development environment to ensure an ongoing flow of new applications. “We need a complete ecosystem,” says Scott Burnett, global consumer electronics leader for IBM. “You can’t get to critical mass with everybody operating in proprietary silos.”

IBM, through efforts with clients in the service provider and consumer electronics sectors, is hoping to foster greater integration and more openness. One big benefit that will flow from such coordination will be revenues that come with dispensing data from connected homes, Burnett asserts.

“Those devices share information,” he says. “We see an emerging Facebook of devices. The logical underpinnings of this kind of ecosystem is our play.” Citing entities such as Proctor & Gamble and Farmers Insurance, Burnett says IBM has identified 17 industry verticals that are “looking for access to consumers or data in devices.”

“Service providers are critical to building the mass market ecosystem,” he adds. “With so many players involved, a lot of them coming in from over the top, service providers can sweep this activity up and leverage it with their consumer relationships in mutually beneficial ways.”

Bruno agrees. “Consumers are going to have a lot more choices,” he says. “The more open service providers are, the sooner we’ll get to the point where a consumer can pick up any device embedded with ZigBee or Z-Wave from a big box retailer, plug it in and use it.”