June 1 , 2002
Powerline Telecommunications: Mission Impossible?
Utilities might refute this scheme, he notes, because Internet access speeds with PLT technology, as with cable modems, slow with the addition of more users.
"The utilities may claim higher rates because of lack of capacity or upgrades to improve capacity," he concludes.
Competitive Analysis: Wall Street Gives Green Light
Analysts at investment bank Morgan Stanley Dean Witter believe PLT not only could be a commercial reality soon, but they expect investor skepticism of PLT to diminish during the next six months. In fact, Siemens AG, which is working to develop PLT technology, forecasts that 10 percent of all Internet connections will be served via powerline communications by 2002.
But although Morgan Stanley's analysts seem to embrace the technology wholeheartedly in research reports on utility equity, they note that regulatory, standardization, and technical issues must be overcome before the technology is viable.
"[Nevertheless], we consider the market for [PLT] to be substantial and extremely broad in its potential applications. The market is twofold: to-the-home, or 'last mile' access; and in-the-home, or 'last inch' access," according to one of the reports.
Morgan Stanley says powerline communications are superior to other last-inch access technologies (cable, wireless) because powerlines are ubiquitous-multiple sockets in each room provide considerable and dispersed capacity. Best of all, no new wiring is necessary. For example, the in-home solution would allow networking of computers using the powerlines, as well as new devices such as smart appliances that adapt their energy consumption according to prevailing market prices.
Philip Hunt, vice president of the HomePlug Powerline Alliance and senior manager at Cisco Systems, imagines a day when a homeowner can buy rights to music on the Internet and stream the audio directly to his speakers. Or, he suggests, the user may have a smart alarm clock networked to a news feed that knows not to wake him to take the kids to school when school has been cancelled due to a snow storm.
Cisco is part of the HomePlug Powerline Alliance, created to set a technology specification for home powerline networking and promote its wide acceptance in the market. Other technology companies in the Alliance include Compaq, Intel, Motorola, Panasonic, and Texas Instruments. Consolidated Edison became the first utility to join the group in June.
Alberto Mantovani, president of HomePlug and division director, strategic programs, Conexant Systems Inc., explains the effort: "We are targeting several type of requirements. We are looking at PC networking, Internet sharing, consumer electronics applications, voice telephony."
Mantovani says there is more need for home networking in the United States than internationally, but the development of powerline opens greater opportunity overseas. For home networking, he says, access continues to be a problem.
The current model for last-inch service is to network the home using PLT technology, and then connect to telephone lines from the home until such time as the grid powerline connection standards and technology becomes a reality, he explains.
"The market reality is that there are already established mechanisms to get [Internet access from the home]. We need to be able with [in-home] powerline to