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BPL Has Coming Out Party - Does Anyone Care?
[October 06, 2005]

BPL Has Coming Out Party - Does Anyone Care?


By TED GLANZER
TMCnet Communications and Broadband Columnist
 
Touting the technology as the solution to the rural broadband access problem, Communications Technologies, Inc. (COMTek) on Wednesday finally announced the big coming out party for broadband-over-powerline (BPL) in Manassas, Va.


 
In July 2004, the City of Manassas selected COMTek to provide commercial BPL services over the city’s electric system.  The terms of the deal are as follows: COMTek owns and operates the network and also serves as the ISP.  The city, which provides utility staff for equipment installation and maintenance, receives a portion of subscriber revenues.

 
According to a press release, COMTek currently counts some 700 customers out of 12,500 households citywide, though another 500 are “now being processed.” 
 
In short, BPL technology utilizes the electricity grid in a municipality and the electric wiring in homes to provide broadband access through electricity sockets.  What makes the technology particularly appealing to some is that power lines are ubiquitous, meaning anyone with a computer and an up-to-date electric bill can theoretically plug in and hit the Information Superhighway.
 
But how great an impact BPL will actually have on the broadband landscape, which is currently dominated by the cable modem/DSL duopoly, depends on who you talk to.
 
Indeed, ever since President Bush highlighted the technology in his 2004 watershed speech in which he called for universal, nationwide broadband access by 2007, many have touted BPL as the mythical “third pipe to the home.”
 
COMTek CEO Joseph E. Fergus said in yesterday's press conference that BPL is no myth. 
 
“Make no mistake about it: What we are announcing today in Manassas is something that we could be rolling out in a year or two from now in literally scores of communities across the U.S.,” Fergus said.
 
Heavy hitters such as Google, Hearst and Goldman Sachs have recently announced significant investments in BPL.
The technology, though, does have its problems, the most publicizedof which is that it interferes with amateur radio service.
 
HAM radio, however, may not be the biggest obstacle for widespread commercial BPL success. 
 
Analysts at energy research and consulting firm Energy Insights concluded in a study entitled “Broadband over Power Line: Impact for Utility Companies” that BPL will continue to generate far more hype than actual subscribers.
 
“We believe that a lack of utility expertise in running commercially successful consumer telecom businesses and a poor track record for success, combined with utility reluctance to rapidly adopt new technologies, and competition from DSL, cable modems, and other emerging technologies will limit the growth of BPL,” said Rick Nicholson, vide president of research for Energy Insights, in a prepared statement.
 
The major hurdle, and its just a small one, is making BPL commercially viable for utilities.
 
“Successful BPL deployments by utilities will hinge on carefully choosing the right business model and markets, finding the right partners for these markets, and leveraging BPL capabilities for utility-related purposes,” Nicholson said.
 
Perhaps the most interesting piece of information to come out of yesterday’s announcement is how Fergus, industry representatives and politicians touted BPL's use for the future.
 
 “The Manassas experiment is a good thing for every American who lives in any city or town with little or no access to affordable broadband,” said Fergus.
 
“Congress is looking closely at ways to improve broadband access in rural and other non-urban settings and that is why I am so encouraged by the Manassas success with broadband over powerline,” said Congressman Frank Wolf (R-VA) at the press conference.  “Now the challenge before us is to make this same sort of success story blossom across the nation.”
 
Odd, considering that Manassas has 37,000 residents and is a suburb of Washington, D.C.  Rural and/or non-urban it is not.
 
Even more puzzling is how BPL was championed as the method to deliver broadband to rural areas.  Utility companies, at the end of the day, need to make money.  Taking the conclusions of the study conducted by Energy Insights under consideration, the question that no one appears to be asking is: Why would utility companies offer BPL in rural areas when it’s not profitable for telcos and MSOs to do so? 
 
Question #2: Why would utilities offer commercial broadband services in rural areas when they are in the business of providing power?  Question #2A: “Wouldn’t telcos and MSOs, who are in the business of providing such services, be more logical choices for offering affordable broadband in rural and non-urban areas?
At the end of the day, I'm not sold on BPL as anything more than a marginilized player in the broadband access world.
 

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Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:
 
 

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