In the first deal of its kind, AT&T Broadband announced a partnership with Linksys last week to offer home networking gear as part of its US$45-per-month cable service. AT&T Broadband customers choose from among designated Linksys wired and wireless gear offered at its site, then pay AT&T Broadband $4.95 per month to network two computers and an additional $4.95 per month for each additional PC.
What’s wrong with this picture? Forget that customers have to pay full price for the Linksys hardware. Why should anyone pay a monthly fee to network when network address translation (NAT) lets you do it for free?
NAT distributes an IP (Internet Protocol) address to each device on the network. Hook up a NAT router or residential gateway to your cable or DSL (digital subscriber line) modem and voila, you’re sharing the connection. Another benefit of NAT is that it allows only one IP address to be visible to the outside world. Hiding your LAN behind the router adds a layer of security and also hides your PCs from your service provider.
But what early adopters see as a benefit, AT&T Broadband sees as an inhibitor to the wide-scale adoption of home networks. It’s gunning to serve the 22 million or so two-PC households — consumers it expects will need a lot of handholding. That’s why AT&T Broadband is offering the Linksys gear — a wireless access point, and Ethernet hub or switch — that doesn’t include NAT. Instead, AT&T Broadband is doling out the IP addresses on these home networks via its DHCP (Dynamic Host Configuration Protocol) servers and charging $4.95 per month to do so.
AT&T Broadband’s product director Scott Russell argues that consumers need good technical support and removing NAT is the only way to remote troubleshoot individual PCs on the LAN. “We don’t support NAT boxes,” Russell says. “Sometimes, we ask customers to disable the NAT box. If they do, we often find the problem, and find that problem is the NAT box.”
Any strategy that improves customer support and removes barriers to home networking deserves consideration, even at a cost of $5 or $10 more per month. But there’s probably more going on here. By taking NAT out of the picture, AT&T Broadband gains device-level access to customers’ PCs and maintains a level of control over users’ systems that could encroach on their privacy.
“Giving AT&T access to my PC sounds somewhat daunting to me, unless they’re going to provide virus scan or firewall protection, and perhaps notify me of virus alerts or advice on how to save hard drive space,” says Kurt Sherf, analyst at Parks Associates and author of “E-Home 2001,” a report examining consumers’ receptiveness to buying Internet services.
Sherf’s report finds that many more broadband-connected homes are interested in buying firewall services (61 percent) than home networking services (47 percent). Currently, AT&T Broadband recommends customers download Zone Labs’ Zone Alarm and provides a link on its Web site. It does expect to offer value-add services down the road though, as the market matures, Russell says.
Mike Wolf, Cahners In-Stat/MDR analyst and author of “Speed! Understand and Installing Home Networks”, sees things another way: “The [cable providers] still believe they can charge per IP address. Part of it stems from concerns over neighborhood bandwidth. They want control, and they want to be compensated.”