Verizon Communications Inc. (NYSE: VZ) is working with technology vendors to create a new home gateway product that could give an inkling of where its FiOS broadband service is going.

Verizon has released an RFP for a new home gateway, which it calls the broadband home router (BHR). The company says it will announce the winners of the BHR contract later this year, but isn't saying when the device will become generally available. Motorola Inc. (NYSE: MOT) and Westell Technologies Inc. (Nasdaq: WSTL) are considered strong contenders for the contract, but neither company would comment on the subject.

"Verizon is specifying the design and telling the vendors what features it should support," says Heavy Reading senior analyst Rick Thompson. "It's also probable that they will give the specs to two vendors and have it be sourced from two vendors."

What's important about the BHR is that it will change the way Verizon designs its FiOS home network.

Verizon plans to move FiOS data and video services from the optical network terminal (ONT) outside the home to the BHR, which will then distribute services to various end points inside the home via existing coaxial cable.

Verizon isn't alone. The home gateway is seen by many carriers as a way to extend their access networks into the homes of subscribers, according to Heavy Reading senior analyst Graham Finnie. That extended network may allow carriers to manage QOS (quality of service), deliver more kinds of services, and (they hope) lock out similar services from cable and Internet competitors.

Today, There is no central gateway device in the home networks of FiOS customers. Video is delivered from the ONT outside directly onto a Motorola set-top box on the TV. For Internet access, the ONT connects via Ethernet over coax cable directly to a single PC in the household. Verizon also provides a D-Link wireless modem to allow for the Internet connection to be shared with other PCs. (See IPTV Drives Home Networking.)

Verizon spokesman Mark Marchand says his company isn't talking publicly about whether it intends to retrofit existing subscriber home networks with the new home gateway. "I really can't answer that at this point," Marchand says. "I think that is really the type of business planning that is taking place."

The decision could prove important. A home gateway device might help Verizon keep pace with the home networking tricks of its cable competitors, and reduce churn among its first wave of subscribers. The home networks of the near future will likely allow sticky services such as wireless photo and music sharing, video VOIP, and home monitoring -- all businesses that the telecom providers would like to play a role in offering.

Still the "connected home" and the role of the home gateway are concepts just now being worked out by carriers and suppliers around the world. Verizon leveraged a cable-like network architecture to bring FiOS to market back in 2004 (video was added in 2005). So it's no wonder that Verizon's home network scheme would evolve with the technology.

Verizon's hybrid RF/IP network design delivers broadcast TV via an RF overlay network. A video on demand (VOD) service is delivered much like other IPTV deployments via unicast IP video streams.

This approach led to its choice for the next step, a home networking standard -- Multimedia over Coax Alliance (MoCA). That's now driving the technical requirements of its BHR home gateway.

The MoCA standard was designed to support a coax physical network and provides specifications for the transport of entertainment services over in-home coaxial cable. The standard, in effect, provides a common language by which the devices in the network can communicate.(See MoCA Adds Two.)

Verizon is currently using hybrid QAM and IP set-top boxes made by Motorola, all of which support the MoCA standard.

— Mark Sullivan, Reporter, Light Reading