Will cable and DSL providers permit home networks?

by Andy Oram

Related link: http://news.com.com/2100-1033-956409.html

Communications chipmaker Conexant Systems issued a brief announcement that should make life easier for home and small-office netters. Wi-Fi chips will be added to equipment used in cable modems and DSL. That should facilitate people using a single system on a high-speed Internet connection as a hub for the whole family's or office's computers.

There's just one hitch. Many cable companies prohibit networks in their terms of service. I believe some ISPs providing DSL have done so, too.

The concern of the cable companies is that a lot of people sharing a connection in one home or office will place a strain on bandwidth. Whether this would happen in practice is open to debate, but in theory it's a problem with cable modem networks (which are basically LANs serving a whole neighborhood).

More likely, both cable and DSL providers will need to deal with increased bandwidth use by adding fatter connections to their backbone providers. This raises the cost of providing access to end-users.

Wireless could make things even worse, because a lot of people will leave their networks open to users on the street, by design or out of laziness.

So the terms of service are not just being mean. There are real economic issues here. (Not that the Conexant Systems announcement makes any mention of them!) The question is whether the draw of home and small-office networking will prove so strong that providers relax their restrictions in order to gain customers.

The Conexant Systems offering provides another incentive for them to do so, and makes it a tantalizing possibility.