Powerline: The future of broadband?

Imagine a world where virtually unlimited bandwidth was as close as the nearest electric wall socket.

A Dallas-based company called Media Fusion says this dream may be less than a year away. The company's technology is still in the laboratory stage, but significant questions remain about its viability in real markets. Yet if it does work, the technology could radically reshape a communications landscape now dominated by telephone and cable companies.

Media Fusion is developing technology it says can send data, voice, or video signals over electric power lines, at speeds vastly exceeding current cable modem or telephone systems. Where cable or telephone companies talk in terms of megabits per second, Media Fusion talks of the possibility of transmitting exobits--that's a "1" with eighteen zeros after it--per second though power lines.

In the abstract, the idea isn't new. Utilities and telecommunications companies like Nortel have sought a way to transmit data efficiently through power lines for years. These efforts have consistently run into technical stumbling blocks, however.

Media Fusion has yet to take their technology live on a power grid. But the technology's apparent potential--virtually unlimited bandwidth with a vast geographic reach--has created a growing buzz among utilities and in government circles. Top congressional officials say they will even seek government funding for the project if the private sector doesn't come through.

This support is predicated on the success of the system's first live tests, which the company says will begin in just a few months.

In discussions with financial backers and potential political supporters, the company has said individual consumers could get network connections of 2.5 gigabits per second--an estimate the company calls highly conservative.

That's not quite an exobit. But even at that speed, one could have high-quality, real-time videoconferencing or easily watch a movie downloaded from the Net.

"This would be a massive empowerment of communications systems," says CEO Ed Blair, a Dallas entrepreneur who helped researcher William "Luke" Stewart start Media Fusion two years ago. "My view is that this will start whole new industries."

This vision has attracted its share of skeptics, who say the promise of nearly unlimited bandwidth is little more than fantasy.

"Every disruptive technology at its inception has been seen as absurd," says Bob Dillon, a co-founder of Enikia, a company that does powerline home networking technology. "But there are technologies that have proven to be absurd, and my layman's perception of this is that it seems absurd."

Yet one utility company has signed on to test the system with a trial audience of 1,500 people by the end of 1999. At least six other electric utilities have signed confidentiality agreements, and a European venture group has agreed to purchase a technology license for $65 million, the company says.

Financial backers will release stages of funding over the course of the next year, as Media Fusion slowly takes its system out of simulation and proves its viability on a genuine power grid. "It's like the Empire State Building," Blair says. "You can build a model, but it's only a model until you build the building itself."

The idea of communicating over power lines isn't new. Electric lines, aside from powering toasters and microwave ovens, can also transmit electromagnetic pulses used for voice signals. Yet the world's power transmission grids weren't built for traditional communications. The amount of interference created by electric power, combined with the difficulty of sending data through transformers, has stalled most powerline research.

A few companies, led by Nortel and a handful of European utilities, have nevertheless experimented with the idea. After several years of research, trials, and setbacks, the firms have succeeded in transmitting data signals over power lines at about 1 mbps--a respectable rate, but short of what a cable or a fast DSL connection can do.

"At this point we're not actively out promoting it," said Nortel senior manager Jim McClanahan, one of the leaders of the power line project.

But Media Fusion's Stewart says Nortel and others made the early mistake of trying to replicate telephone systems, which use radio waves to transmit information through copper wires.

Stewart's system instead manipulates the magnetic field created around any moving stream of electrons, essentially coding an analog signal on top of the field. The information is then--in theory--carried around the entire power grid at the speed of light, accessible anywhere on the grid.

Media Fusion's system will use a set of "nitelight" modem-like devices that plug into household electricity outlets. Outfitted with a jack for phone lines and cable TV lines, these devices take an analog signal from the power grid, decode it, and send it to a television, computer, or telephone.

Under this system, the power grid itself could substitute almost completely for the traditional Internet's web of phone lines and fiber optic cables, Stewart says. To communicate with users off the grid, the system would also have to connect to the ordinary telephone network, he adds.

The practical limiting factor of any computer's online connection would be the ability of its processor to spit out information--not a scarcity of bandwidth, Stewart says.

"It's not really a congestion issue," he adds. "There are plenty of electrons to piggyback on."

The company has spent much of the last two years trying to convince telephone companies, utilities, academics, and political figures that the technology works. Bringing financial partners on board has been a battle, says their investment banker, MG Securities' Greg Moore.

Stewart himself--who Moore calls "a 'Good Will Hunting' kind of figure"--has done contracting work for Microsoft, the U.S. Navy, and other defense department projects, but doesn't have "50 published papers and prizes" to assure backers of his credentials, Moore says.

But with funding for their first steps now seemingly assured, and the promise of government backing to fill in the gaps, Blair and Stewart now are optimistic that early trials will prove their credibility.

For their first live tests, scheduled within the next three months, the company will transmit seven simultaneous streams of high-definition TV signals over power lines, the company says. This is intended to prove the electric grid's bandwidth capabilities, rather than illustrate consumer applications or security issues, according to Stewart.

Later in the year, Media Fusion will join with at least one utility in trials of its prototype "nitelight" device, and expects to go into commercial production of the devices next year, Blair said. The entire system will likely cost between $70 and $150, the company adds, though final production costs and market demand will affect these prices.

Drumming up support
Meanwhile, Media Fusion has spent the last year looking for political support in Washington, hoping to ward off any future regulation.

Not everyone has been receptive. The company has talked several times to representatives at the Federal Communications Commission, but was not invited back for a recent seminar on powerline communications.

Traditional telecommunications companies also declined to invest, even though the telcos' own scientists said the idea was feasible, Moore says.

But the networking is paying off. Former House speaker-elect Bob Livingston recently joined the board of directors, and is helping the company pursue overseas investors.

Inside Congress, Media Fusion has won the support of several influential telecom legislators, including senate communications subcommittee chair Conrad Burns (R-Montana) and House telecommunications subcommittee chair Billy Tauzin (R-Louisiana). These lawmakers say they will seek government funding later this year, in the form of defense department or other contracts, if the firm doesn't secure enough private funding.

"There is major potential to change the telecommunications industry here," says Leo Giacometto, Burns' chief of staff. "If this can get done without taxpayer money, we would prefer it. But the possibilities for saving taxpayer dollars down the road are tremendous."