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It's Now or Never for Power Line Broadband
Can utilities make a credible play for power line communications?
The mood near the end of the first day of the Power Line Communications Association (PLCA) meeting last December was upbeat. High-speed Internet through the electric socket seemed tantalizingly real. The day had started with a video from Ameren, showcasing a few of the 50 or so households who were part of a power line communications (PLC) trial in Missouri. These consumers were thrilled to the gills about PLC.
A plethora of presenters had thrown up a frenzy of PowerPoint slides about commercial PLC deployment in Europe and the dozen or so trials in the United States. The technology was no longer the problem; it was simply a question of finding the money for the build-out. Representatives of EarthLink declared that PLC had real potential to be the third major broadband technology in America. The biggest hurdle, the speakers all indicated, was time: PLC needs to happen now, before cable and DSL have achieved unstoppable market share-two or three years from now.
But then Tim Frost, director of corporate planning at Consolidated Edison, took his turn at the podium. "[There is] an ominous lack of participation by utilities" in PLC, and the broadband business is not making money at the gross margin right now, he said. At the end of his presentation, there was dead silence.
What, exactly, is the business case for PLC in the United States? It's a question without a clear-cut answer, but if the experts are correct, potential PLC players must figure out that answer very quickly, or lose out altogether.
The Appeal of the Last Mile
What makes PLC so attractive, in some circles, is what it doesn't have: a need to lay miles of wires, fiber-optic or otherwise. Instead of building out to every single residence, PLC technology runs either to, or around, a transformer.
Contrast that to cable, which requires an upgrade installation to every residence. Or to DSL, which is simply not available to many households, despite the fact that nearly every American residence has a phone line (or two or three).
Brian Wenger, principal research engineer at EarthLink, sees the need for a "truck roll" to a residence as the Achilles' heel of both broadband cable and DSL. One of the reasons for the high adoption rates of dial-up Internet service was that consumers could serve themselves-they didn't need to wait around for a representative from their Internet service provider (ISP).
PLC holds the same promise, Wenger believes-if the industry moves quickly to adopt an open standard on the PLC "modem." The cable industry is quickly reaching that point. Cable modems can be purchased at many computer stores and online, and more than 90 percent of DSL is now self-installed. Wenger says that PLC modem manufacturers and utilities do not have the luxury of time to fight over proprietary standards.
The European Herring
Commercial PLC deployments are under way in Austria, Germany, and Sweden, and trials are ongoing in Brazil, Finland, France, India,