Printer Version | Reprints and webprints
      Industry Benefits From Good Calls
Thursday, September 16, 2004

Interference, Cost Issues Power Debate on New Broadband



There's a new broadband technology in the works that has Internet service providers, public utilities, ham radio operators and even President Bush all charged up.

It's broadband over power line technology -- and BPL might be coming to your town soon, at least in a trial version.

As its name suggests, BPL works by using the existing power lines to bring broadband service into homes. Several versions of BPL have been implemented in various trials throughout the country, from Raleigh, N.C. to Menlo Park, Calif. In some, consumers can access broadband by plugging their PCs and laptops any electrical outlet in their homes.

In others, special devices attached to existing electric poles and transformers beam Wi-Fi signals to nearby homes (and cars, and any other locations in the area where you might bring a wireless modem).

In all of the versions, power companies, in partnership with internet service providers, leverage the ubiquitous power line structure in hopes of bringing broadband to more customers. And if that's not enough to light you up, the proponents say it will be faster, cheaper and more convenient than other types of broadband, such as digital subscriber line service provided by phone companies or cable modem service provided by cable-TV companies.

According to a recent survey of 100 utilities by Atlanta-based energy research firm Chartwell, 33% of electric utilities in 2003 reported planning, considering, or offering BPL to customers on a trial or commercial basis.

"BPL technologies are certainly hot, and drawing interest from a lot of utilities," said Chartwell analyst Garrett Johnston.

Kevin Kushman, chief financial officer of Current Communications in Germantown, Md, says customers are just as enthusiastic. "They're calling and asking 'When are you coming to our neighborhood? When are you going to get to us?' That's very encouraging to us."

Current has teamed with the Potomac Electric Power Co. ((POM)) in a BPL trial that currently serves about 100 customers in Potomac, Md. The company has also partnered with the utility Cinergy((CIN))) for a commercial rollout, serving 1,400 to 1,800 customers in Cincinnati. Customers are charged from $29.99 to $39.99 per month, depending on the connection speed. Kushman says that, unlike DSL and cable broadband, BPL offers what's called symmetrical bandwidth.

"You download at 3 MB per second, and you can also upload at 3 MB per second," he says. "On a cable modem, if you download a file at 3 MB per second, your upload speed is maybe one-third to one-half of that."

President Bush is a fan. In a recent speech before the U.S. Commerce Department, he called BPL a "great opportunity to spread broadband throughout America via our power lines."

Federal Communications Commission Chairman Michael Powell is on board, too. He recently said power line broadband would "play a key role in meeting our goals to expand the availability and affordability of broadband."

But the technology has plenty of critics as well, especially among ham radio operators. They charge that BPL interferes with their signals. BPL providers say they have solved the problem by "notching out" the frequencies used by ham radio operators. But Dave Sumner, chief executive for The National Association for Amateur Radio (ARRL), says that while notching helps, it's no panacea.

"First of all, it simply reduces the signal level; it doesn't eliminate it," he said. "Secondly, it may solve the problem for one radio service like ours, but the problem will still exist for others on the radio spectrum."

Sumner points out that there are a number of frequencies used by government entities, such as the military and the Federal Emergency Management Agency, that won't be notched. FEMA has written to the FCC with concerns that BPL would pose a threat to their radio communications.

Sumner says that, contrary to the claims of BPL proponents, his organization isn't trying to kill the technology. Hams just want lower emissions that don't interfere with their signals.

Ed Thomas, the FCC's chief engineer, has heard an earful of complaints from the ham radio community and others about BPL. "Some of the complaints are legitimate, and some of them are rhetoric," he said. The FCC, he says, will release a set of BPL requirements later this year.

Thomas insists that notching solves the main problem. "We've gone out and made measurements in the places they've (ham radio users) complained. At the end of the day, we think the complaints they're making are ill-founded," he said. "Basically, notching works just fine."

He also says the FCC has provided hams and others with plenty of protections.

"We've required dynamic controls to allow the power companies to mitigate the interference to acceptable levels," said Thomas. "If there's a legitimate complaint of interference by a ham, the power company has to fix it, up to and including shutting it off. So my reaction to them is: Give me a break!"

But there's possibly a bigger BPL problem: Is the service economically viable for providers? Due to the nature of the U.S. power grid design, it might not be, says Rahul Tongia, an assistant professor at Carnegie Mellon University in Pittsburgh. He noted this possibility in a report, titled "Promises and False Promises of PowerLine Carrier Broadband Communication."

Tongia writes that, because BPL is a shared medium, the cost to serve the consumer is determined by the number of customers sharing the equipment. U.S. utilities serve about 10 consumers per transformer, while utilities in Europe and Asia serve about 100-200 end users. So, a technology like BPL might make more sense overseas than in the U.S.

The FCC's Powell and BPL providers have touted BPL as a potential solution to the need for broadband service in hard-to-reach rural areas, since power lines are everywhere. But, as Tongia indicates, it may not make sense on a cost-per-customer basis to provide it in loosely populated rural areas. And besides, other broadband technologies already have a good chunk of these areas, says Nancy Bedard, an analyst at research firm Yankee Group in Boston.

And she says utilities may still be a little leery about entering into partnerships with the telecom business due to the industry debacles earlier this decade-which is why most of the current deployments are just trials, and not full commercial rollouts.

"The utility companies are not that enthusiastic about taking on a new line of business," she said. "During the telecom boom several years ago, if the technology had been ready, it might have been more widely accepted then, but the utilities really hunkered down after that. They said, "Why would we want to be in telecom; look what happened in the market?'

"Now, we're beginning to see a pick up in the trials again," she acknowledges, "but utilities have their business, and BPL is really outside of that business."

Related Resources:


Search for previous IBD articles on this topic in the IBD Archives.

Read about innovative companies with promising futures in The New America.

Discover emerging trends in the medical sciences with Health & Medicine.

Return to top of page

 Sign In! 
Enter User Name
Enter Password

User Name/Password help
Enter Symbol
Symbol lookup         Help
Stock Checkup®
IBD Charts

Screen Of The Day
My Stock Lists
IBD Forums
IBD Archives Search


click here to view more
     Home | Site Map | IBD Learning Center | Today In IBD | IBD Subscriber Tools | Advertising Info | Partner Programs | Contact Us