With a recent investment by Google and a new initiative announced by IBM, broadband-over-power-line technology has leapt back into the spotlight. Have companies finally found a way to profit from the promise of broadband in every home with an electrical outlet?
Using a low-cost adapter, BPL (broadband over power line) customers can get high-speed Internet service using the wiring that already exists in their homes or offices.
The technology has been touted as having a number of benefits for users as well as for utility companies. Not only can it deliver broadband to areas that lack DSL or cable service, advocates say, but it also can boost power service reliability and track outage information more accurately by using network tracking capability.
Although utilities and technology companies have been tinkering with using power lines to carry data for nearly 20 years, within the past five years there has been increasing interest in commercialization.
Those who are betting that BPLs time has come include some technology heavyweights, which could ensure a level of success. On July 7, BPL provider Current Communications Group noted that it had received major investment from Google Inc., the Hearst Corp. and Goldman Sachs.
Current Communications went after the high-profile investors because the company believes that many of the technical hurdles have been addressed, driving BPL toward a more cost-effective model, said Kevin Kushman, vice president of corporate development at Current.
“Theres been a groundswell of interest in this technology over the past year,” Kushman said. “Although it requires some capital and equipment additions on the part of utilities, we think that the system will prove itself in the cities that are trying it, and that will drive adoption.”
The company chose the range of investors because it felt that a well-rounded investor group would provide a launching pad for the technology. “These are companies at the forefront of Internet technology, media and finance,” Kushman said. “It demonstrates how deeply BPL can impact a number of sectors.”
IBM, too, is confident of the technologys chances to become a contender in the marketplace. On Tuesday, the company announced it would be partnering with CenterPoint Energys Texas division to deliver BPL in the Houston area.
The movement toward BPL is likely to be gradual, said Bernie Hoecker, vice president of IBMs energy and utility industry division. “It wont be an overnight thing, where six months from now half the cities in the U.S. are using BPL,” he said. “But it will begin to take off in major metropolitan areas, and eventually therell be a tipping point where itll get more traction.”
But others are not so optimistic that BPLs moment has arrived.
“This is one of those technologies that ebbs and flows as people get interested and then lose that interest when nothing develops,” said Yankee Group analyst Nicole Klein. “In a few months, you wont hear about it.”
One of the major hurdles for BPL adoption will be sparking consumer interest in the technology, and that will take both time and money, Klein said. Also, the expenditure for utility companies could make many cities balk, especially if they have already embarked on strategies for increasing broadband access to underserved areas.
An additional concern is that each city and state has different regulatory requirements. Hoecker admitted that overcoming some of these will take time and effort, as rates are hammered out and local service offerings are developed.
Utility companies also will have to undergo something of a transformation in how they do marketing and service, said Maribel Lopez, a vice president at Forrester Research.
“Its fundamentally a different business for them,” she said. “Theyre used to people calling and ordering electricity. There are no competitors to worry about, and theres no marketing.”
Despite the technologys hurdles, however, Lopez said she thinks BPL wont remain ebbing and flowing forever. “It has tremendous potential,” she said. “But it may take time to tap into it.”