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Power lines stumble to market

Bruised and shedding high-profile supporters, technology for sending high-speed data over electrical wires to the home is at last heading to market.

Bruised and shedding high-profile supporters, technology for sending high-speed data over electrical wires to the home is at last stumbling to market.

For years the idea has lurked as a potential competitor to alternatives like DSL (digital subscriber line) and cable modems. Because electric lines are more ubiquitous than phone lines, and far more common than cable TV connections, it has drawn considerable--if intermittent--interest from big companies and policy-makers around the world.

But the next year will be a critical one for the young technology, as it struggles to achieve tangible technological and commercial results in an environment where new high-tech ideas are having a hard time winning funding and popular support.

"My view is that if (power-line data transmission) worked so well, there would be a lot of companies getting into it," said Jeff Moore, senior analyst for network services at Current Analysis, echoing many analysts' skeptical wait-and-see attitude.

"Even if it did work, it would face an uphill battle" against more mature technologies such as DSL, cable and satellite connections, Moore added.

After many fits and starts, customers in Europe will see commercial service offered this year from at least two companies. This summer, U.S. customers will see their first full-scale beta test project in New York along with Consolidated Edison (Con Ed) utility. Giants including Cisco Systems and the Bechtel Group have signaled their growing support of the technology in successful trials in Europe, the United States and Asia.

These long-awaited market signs come amid some bad omens, however. Technology giant Siemens abandoned power-line development last week, citing market and regulatory concerns. Another, far more speculative, company called Media Fusion, which once said it was testing a system that promised practically unlimited bandwidth, has gone silent following the removal of its chief scientist and founder.

An old idea, moving slowly
The idea of letting information piggyback inside power lines is an old one. Power company employees have long used devices that tap the wires to send voice messages short distances while working on the lines, for example.

The trouble has come in turning this into stable data transmissions that can support modern Internet use. Many of the same network characteristics that have made it possible to receive uninterrupted power supplies--outside of California, at least--have turned out to interfere with data transmissions.

Nevertheless, development work done in several countries over the past few years is finally finding its way out of labs and into actual electrical grids. Depending on how it is implemented, it offers the possibility of connections as fast or faster than cable modems or DSL, although--as with cable systems--neighbors will have to share a line's available bandwidth.

The idea has pulled ahead in Europe, experts say, in part because characteristics of electrical networks there make it technically easier to send data. The projects there are finally bearing fruit.

Swiss company Ascom, working with German utility group RWE, plans to bring close to 16,000 homes online over the next year or so. Another utility-backed group called Oneline AG, which is working with U.S. company Enikia for a home networking component, has projected about 10,000 customers by the end of 2001.

However, the German activity has been tempered by last week's defection of Siemens, one of the most high-profile developers of the technology.

A source close to Siemens' decision said the company drew back for several reasons, including the slow pace of European standards development, challenges from other patent holders in the technology, and the fact that electronic radiation levels for the power-line transmissions had wound up being higher than standards proposed in Germany.

Slower in the U.S.
In the United States, trial projects are still more restrained. A Brookline, Mass., company called Ambient is working with New York's biggest utility, among others, mapping power networks and testing early stages of the technology. They, along with partners Cisco and Bechtel, hope to launch the service commercially in 12 to 18 months, Chief Executive Mark Isaacson said.

Cisco, however, perhaps remains the technology's largest supporter. That company, which is creating data-routing technology for several projects, is doing some independent development work to help push the technology forward, but is still looking to the smaller companies for much of the advances.

"Cisco is very much behind power line," said Phil Hunt, one of the Net infrastructure company's technology experts. "Our strategy involves some direct action, and some less direct activity."

The most ambitious--and speculative--company in the market has all but disappeared from the radar screen, however.

Dallas company Media Fusion won considerable press and attention from national policy-makers several years ago pitching a version of power-line transmission with near-unlimited bandwidth. The company repeatedly said it had achieved support from small utilities, and was close to a field test of a lab product that was already functioning.

But last month, the company announced that its former chief scientist, who the company's banker had called a "Good Will Hunting" type of figure, had been removed as chairman of the board and as an employee of the company. "We knew that the best way to advance the technology was without Mr. (Luke) Stewart at the helm," the company said in a statement.

Current Media Fusion executives declined repeated requests for an interview, as did Stewart himself.