While real estate techno types are focusing on questions like whose Web site has the most property ads and whose pages get hit the most often, builders are beginning to focus on the other side of the technology issue: Hard wiring new homes, retrofitting old homes, and betting on whether bits and bytes will ultimately flow into the house over cables wired to the street, or microwaves beamed through the roof.

John Diaz of ClearWorks Inc. in Houston is currently working with dozens of builders who are constructing thousands of homes in South Texas, and one of the hottest add-ons is "future proofing" the house.

"Telephone and cable drops. Where to put them, how many to put in the house. Where to put the ‘connection center.’ These are all questions we're dealing with now," says Diaz.

For his money, Diaz says for the foreseeable future data most likely will move underground on fiber optics to the street.

"It's the best proven technology we have," he said. "It's here now. We know it works. Wireless technology is very promising, but I think it's still 5 to 10 years from being where it needs to be."

Alternatively, the likes of Motorola, Sprint and MCI Worldcom are betting wireless technology is only two to three years away for commercial purposes, and will be available in homes shortly thereafter. Their reasoning is that erecting microwave towers to distribute satellite signals to a broad number of homes will be infinitely less expensive than digging trenches and laying cable at house after house after house.

Among problems with wireless technology, however, says Diaz, is that microwaves are subject to the whims of weather and man.

"The biggest problem is line-of-sight," he says. "If there is a tree in the way, you're going to have problems. Or imagine a large truck driving down the street of your neighborhood. It breaks the signal as it goes by each house, forcing the systems to reset themselves. If there is an emergency in the house and you're trying to call 911, there could be liability issues."

Either way, Diaz says, modern homes are being wired to work in the future. The "connection center," akin to an electrical box in most homes, collects all a home's internal wiring and can then be hooked to a satellite dish -- or an outbound cable.

Pre-wiring a new home may add between $1,800 and $3,000 to the price, which Diaz considers cheap. "Once you wrap that into the mortgage and spread it out over 15 or 30 years of payments, it really doesn't amount to much," he said.

And there seems to be no threshold for homes getting wired.

"We've put connection centers into million dollar homes, but we've also wired $80,000 homes," he said. "We feel there is a lot of value to them today, but we also feel it is going to help their resale value in the future."

Diaz also said that older homes can be retrofitted, but it is more expensive and time consuming. "Usually it means cutting into the sheet rock to run the cables, and then patching over. It can be done, but it's a lot harder and more expensive."

When wireless systems do become available, they almost certainly will replace hard wired systems.

While a standard home today can distribute data from a 56K phone line, Diaz systems -- wired by cable to a central neighborhood modem -- are about 2,000 times faster. Satellite services, however, say they can distribute data several hundred times faster than that.

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Published: June 21, 1999

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