Waiting for Electrifying Internet Access

Jack M. Germain, newsfactor.com, Fri Jul 29

Hanging from utility poles or buried in underground conduits in communities across America are power lines that feed electricity to homes and businesses. This same electrical grid might soon be providing subscribers the ability to surf the Internet with greater speed and efficiency than is now available from cable and DSL service, according to industry watchers.

This promise of accessing the Internet via existing electrical wiring, known as Broadband over Power Lines, or BPL, initially encountered technical problems, lack of funding and regulatory issues. Those problems largely have been overcome, according to experts. The Federal Communications Commission (FCC) now supports BPL service.

Earlier this month Google (Nasdaq: GOOG - news), Goldman Sachs and Hearst invested in Broadband over Power Line (BPL) provider Current Communications. IBM (NYSE: IBM - news) and CenterPoint announced a big partnership to promote the technology.

The lure of revenue generation for the thousands of regional utility companies that would have to buy into BPL now is a driving force for adoption. A recent report for Telecom Trends International forecasts that worldwide Broadband over Power Lines revenue will grow from US$57.1 million in 2004 to $4.4 billion in 2011.

As a result of these developments, several utility companies now are gearing up to offer Broadband over Power Line in numerous regions around the country. Industry experts developing BPL technology predict a viable service will be ready within the next 18 months to three years.

Playing Catch-Up

Broadband over Power Line already exists in several European countries. While not yet universally available there, the power industries in Europe are several years ahead of their U.S. counterparts in developing BPL technology.

"The U.S. has been slowed by constraints of existing electrical networks," said Michael Valocchi, an analyst with IBM's Utility Strategy Practice.

The European electrical grid is designed much differently, which made the job of developing BPL much easier, he said. Part of the design difference is in the number of houses on network links.

Another design hurdle for U.S. power companies is the use of transformers at so many points along the wire network. According to Valocchi, engineers solved that problem by figuring out how to jump the Internet signals over the transfers so they do not get in the way.

Developing BPL technology in the U.S. makes sense, according to an Intellon official. Intellon develops home powerline communications technology and is the enabling technology for Current Communications' BPL services.

"Growth in the U.S. has been stagnated," said Andy Melder, senior vice president of sales market and business development for Intellon. "Power Line communication is taking on new meaning. The equipment is there now to make it work."

Advances in DSL and cable networks first led people to question the need for developing BPL, Melder said. But cable and DSL service is not available in many parts of the country while electrical lines are already in place.

Fast-paced Developments

Technology providers are designing BPL services to be plug-and-play so consumers can install equipment themselves and begin to receive service within a few hours of subscribing. For electric utility companies, BPL offers a high-value communications network that can enhance power delivery, help with automated outage detection and restoration confirmation, and enable an intelligent grid, according to utility experts.

As evidence that the industry is moving forward with getting BPL ready for distribution, analysts point to recent news announcements of partnerships and field-test operations.

For example, IBM and CenterPoint Energy announced on July 11 two joint projects in their effort to deliver broadband services over power lines. Both projects are among the first in the U.S. to use the latest generation BPL technology released this year, said company officials. This technology makes BPL three times faster than what had been previously available.

The first joint project is the opening of a BPL technology center in Houston that will allow IBM and CenterPoint to examine and test BPL technology in real time for consumers and utility companies. The second project is a test of BPL service by CenterPoint Energy to about 220 homes in southwest Houston. This pilot program will run through August 2005.

Continue this story