For several years, many have hoped that the technology, called broadband over power lines, or BPL, would allow electric companies to become a viable third alternative to the cable and telephone companies providing high-speed access to the Internet. It's a sentimentby the Federal Communications Commission.
Technical limitations and a bad habit of interfering with local emergency radios, however, have made BPL a tantalizing near-miss for the tech industry.
Big-name investors including Google generated buzz with their recent bet on a long-developing technology intended to deliver broadband service over power lines.
If the technology, called broadband over power lines, or BPL, finally proves reliable--and power companies can market it effectively--it could compete with cable and telephone-line broadband services, and offer ISPs an alternative way into people's homes.
Butinvestment by Web search leader Google, the media conglomerate Hearst and bankers at Goldman Sachs in a Germantown, Md., company called Current Communications Group has many wondering if the time is finally right for the oft-ignored BPL. Current didn't disclose the amount of the investment, but The Wall Street Journal reported it was about $100 million. IBM has also started making noise in this market, announcing on Monday that it is partnering with Houston-based power utility CenterPoint Energy .
"I think we are really at an inflection point with the technology," said Kevin Brand, vice president of product management for EarthLink. "We're on the cusp of really breaking through. A big investment like this demonstrates that the large companies think there is something there."
Of course, EarthLink has a vested interest in seeing BPL take off. Last month, theindependent Internet service providers' attempts to force cable companies to open their networks to ISPs delivering competing services.
Now it looks as if the Federal Communications Commission, armed with the court's decision, is looking to change the rules for phone companies and free them of their obligation to share their networks with competitors. The result could be devastating for ISPs such as EarthLink, which have built their businesses on the backs of other companies' infrastructures. BPL technology would give these ISPs an alternate way into people's homes.
Critics, however, say they're skeptical that BPL is up to the task. "It's impressive that Google and Goldman have invested in the technology," said Joe Laszlo, an analyst with Jupiter Research. "But I just don't know what they see there. Wireless technologies like WiMax seem to have more promise as a third broadband competitor than BPL."
People have been experimenting with building communication networks over power lines since the 1950s. But the technology has never seriously caught on due to its low speed, low functionality and high development cost.
In recent years, new modulation techniques supported by other technological advances have helped BPL evolve. Most services today are capable of delivering between 512kbps and 3mbps of throughput, which is comparable to most DSL offerings.
But policy disputes and expensive failures largely have been the hallmark of BPL. In 1999, for example, Nortel Networks, a telecommunications equipment maker, and the British energy company United Utilities abandoned a two-year BPL project.
Because BPL uses the radio frequency signals sent over medium- and low-voltage AC power lines to connect customers to the Internet, it can cause interference with HAM radios and emergency radios. Power lines, it seems, are great and often overpowering antennas because of their length and height off the ground.
In 2004, the FCC released agoverning the use of BPL to prevent interference. Most BPL equipment deployed today keeps to these limits.
"I think the issue of interference has been a little overblown," said Bob Gerardi, manager of power line communications for Duke Power, based in Charlotte, N.C. "Some of the first-generation equipment had some problems, but the latest technology adjusts the power levels to avoid any interference."
With many of the technical issues ironed out, BPL is slowly getting deployed. More than 50 utilities across the country are looking into it. Duke Power, along with Progress Energy in Raleigh, N.C, and Consolidated Edison in New York, is one of three power companies currently in trials with EarthLink.
Duke began its trial with 500 homes and plans to launch a commercial service to 10,000 to 15,000 homes by the end of this year, said Gerardi. The company, which will rent access to its network to ISPs such as EarthLink, said it will be able to handle high-speed data services at 512kbps to 5mbps, along with voice over IP services. The cost of the service will likely be about $30 a month.
"The feedback we have gotten from customers is that they want choice," said Gerardi. "They are happy that Duke Power is pursuing this technology, and we feel an obligation to our customers to vet the opportunity because of the potential benefits."
But some analysts say it will be difficult for BPL to make any significant gains against the cable and phone companies, which have a big lead both in terms of subscribers and mind share.
In 2004, 89 percent of U.S. households had access to either cable modem or DSL service, according to Jupiter Research. The research firm estimates that 56.6 percent of households had access to both. By 2009, dual access should jump to 76 percent.
"The big problem for power companies is not the technology, but the timing," said Jim Penhune, an analyst with Strategy Analytics. "The more mature the market, the harder it is for new entrants to break in."
The power companies are also not in a great position to bundle their services. Cable operators and phone companies are going after the "triple play" market, which includes a package of telephony, television and high-speed data services. While it's not inconceivable that power companies will try to bundle other services with their broadband access, critics say it'll be a stretch.
"Power companies make the Bells look like fast-paced innovators when it comes to launching into new businesses," said Penhune. "I don't see them as particularly nimble."