Analysts may tout the coming "convergence" of communications technologies, but the real trend is "divergence."

No subject in recent memory has received as much media attention as the "Information Superhighway". But exactly what it is remains curiously unclear. The Internet? Wireless personal communications services (PCS)? Interactive fiber-optic cable to the home? The Infobahn is all of these and more. It will also exert an enormous effect on the electric utility industry as a way to cut costs, improve service, and generate new revenues.

Many utilities have recognized the magnitude of the potential opportunity. Some, like Pacific Gas & Electric (with partners TCI and Microsoft) and Public Service Electric & Gas (with partners led by AT&T), are announcing high-profile broadband-oriented pilot projects. Others, like Kansas City Power & Light and Union Electric (with partner CellNet), are quietly rolling out utility technology to most, or all, of their customers. Virtually every major utility is at least studying the subject.

A Network of Networks

The Superhighway consists of many communications technologies (em fiber-optic and coaxial cable, numerous forms of wireless, twisted copper pairs, and especially software: operating systems, network management software, applications, user interfaces, and messaging protocols. The software is the glue that holds together the digital information being transmitted over the networks.

The Infobahn is a network of networks that comprises all of these technologies. Let's say a utility marketing representative (em a "road warrior" (em sends a fax from her mobile laptop computer over a cellular phone. The signal is received at a cell site, which forwards it using a microwave radio link to a master control station. This station puts the fax on a

fiber-optic cable that carries the data across the service territory, then dumps it on a twisted copper pair that delivers it to the fax machine at the home office. All of this is managed by software in the mobile computer, in the cellular network, in the long-haul carrier, in the local phone company at the receiving end, and finally, in the fax machine.

This example illustrates four important principles of telecommunications. First, the user is technology neutral: She cares only that the fax is delivered quickly and reliably. She is paying for the service of delivering a fax while working on the road, not for the privilege of using a particular technology. Second, successful communications takes advantage of a variety of technologies, each optimized to fulfill its purpose (cellular for mobile car phones, fiber-optic for long-distance, and so on). Third, the technologies, both hardware and software, are multiple and do not compete: They complement one another to form a unified network that provides the desired service. Fourth, multiple

communications service providers (em each with its own expertise in wireless mobile voice, long-distance data transmission, or local telephony (em work in concert. This is the "superhighway" in every sense.

A number of analysts tout the coming "convergence" of communications technologies. The real technology trend is "divergence." Where there were only wired phones 15 years ago, there are now cell phones, cordless phones, and satellite phones. In 1994, growth in satellite cable ("wireless cable") exceeded even the most optimistic market forecasts (em even in areas with wired cable service.

Divergence can create powerful new competition where none existed (em e.g., wired versus wireless cable in urban areas. However, it is far more common for new technology to create or grow markets. For example, wireless technology is expanding cable television to rural areas. Another example is the long-distance calling market. Since 1984, AT&T's long-distance market share has dwindled to 60 percent. However, access to lower-cost technology and the creative new services introduced by MCI and Sprint have caused AT&T's long-distance revenues to grow 11.5 percent in a total long-distance communications market (now at $65 billion) that is 67.5-percent larger than it was in 1984.

Networks for Energy Services

The networks available for communications range from the postal service to megabit-speed wide-area fiber networks. For utility automation applications, such as automating metering and delivering energy services to the home, five two-way networks stand out (see Figure 1). All offer potential avenues to send energy prices, bills, control commands, and usage data to consumers or energy-related devices. They can receive metering and alarm data or user requests for data and services, including electronic bill payment.

Neighborhood broadband. The "to-the-neighborhood" network links the service provider and the neighborhood. In urban areas, the network is often fiber already, and will become more so over the next few years. This type of network features high capacity and supports video, voice, and data communications. Since its cost is shared by a large number of homes (em a few hundred to a thousand or more (em its cost as a portion of total service delivery cost is small, though significant. The power distribution system offers an analogy: This link is equivalent to a transmission line or high-voltage distribution line to a feeder circuit.

Wireless alternatives are also becoming available for the link to the neighborhood. These offer sufficient capacity to support many utility applications, including

automated metering, and make sense where disaster recovery is an important feature. Wireless links backed by batteries offer greater reliability; wireless networks continue to function even when wires go down.

Home broadband. The "to-the-home" broadband link provides voice, video, high-volume data, and perhaps the Internet connection. It may be fiber-optic, but is more likely coaxial cable. End users will need to pay about $25 per month to support the infrastructure, in addition to paying for the applications ("content"). The initial promise of such networks led several large telecommunications companies to announce in 1994 that they would be installing fiber to every home. This year, several of these (em in particular, Bell Atlantic, U S WEST, and Pacific Bell (em delayed their plans due to high equipment costs and disappointing trial results. Nevertheless, two-way fiber or cable may exist in a significant number of homes 10 years from now. When in place, it will provide an inexpensive means of moving energy services data between the utility and a home television or personal computer.

The broadband link could be used to provide users with access to metering data, including pie charts and other graphics, after the data has been received by the utility, checked for accuracy, and processed into higher value data (such as a usage analysis). Data could be displayed via an Internet connection to the personal computer or on the television.

Getting on and off the broadband link at each end of the

connection involves significant cost, however. Even free communications capacity may prove uneconomic for automated metering services. The homeowner's existing telephone line is available at no cost to move metering data when the phone is not in use. But widespread use of this approach remains prohibitively expensive, due to high installation and in-meter device costs. There are also limits on performance, because the telephone network was optimized for voice communications, not data. Moreover, the utility has no control over the network or its performance.

Wideband wireless. These networks (em which include cellular and emerging technologies, such as PCS and radio packet data (as provided by Metricom, Ram, Ardis, and Cellular Digital Packet Data) (em target mobile professionals, providing voice and laptop-to-laptop communications. They support, for example, transfers of entire files from one mobile computer to another. Cost and price start at around $20 per month, making these networks cost-prohibitive for most customer- oriented energy services, but

effective solutions for other needs, such as crew communications and dispatch.

The cost of these solutions is driven by the function required in the end-use devices (em i.e., whether they are data modems or voice handsets. High output power is required of the device, there is a need to handle "hand-offs" as the user moves from cell to cell in the radio network, and devices must be able to handle the complexity of searching for and accessing an available radio frequency from among those used by the network in a particular geographic area.

Narrowband wireless. These networks represent an emerging market sector. (CellNet's KCPL rollout is the first commercial installation.) They can handle millions of end points; support short, bursty data; and involve low device and installation costs. Automated metering is a key application, requiring a monthly price of only $1 or less as well as access to meters in basements, outdoors, in pits (water), or via an "intrinsically safe" connection (gas). Utilities can move forward with automated meter reading without precluding future technologies, since wireless metering is complimentary to, rather than competitive with, emerging technologies.

Local area networks. "Inbuilding" networks are receiving increased attention. These run on the existing electricity wires, using power-line carrier communications to link an in-building controller (thermostat, energy management unit, personal computer, or other) to appliances and equipment. The goal is to embed the power-line carrier device in new appliances. Existing technology ("X-10"), which has been available for over a decade, requires external communications modules. These networks facilitate personal con-venience (remote turn-off of lights) and energy management (monitoring and control in response to changing energy prices). If initial pilot projects are any indication, broadband will likely provide the interface for in-building networks. However, some utilities (e.g., PacifiCorp) are experimenting with wireless links as well.

In-building networks raise interesting challenges for utilities. End customers purchase the networks (and the appliances or appliance modules), since they enjoy the benefits of greater convenience or reduced energy bills. As a result, a variety of power-line carriers and control units are appearing on the market. Utilities (em or "to-the-home" communications providers in general (em should choose an interface flexible enough to connect to the various units purchased by consumers.

Customers over Technologies

The Information Superhighway offers utilities both great promise and great challenges. The promise lies in new ways to reach utility customers; the challenge lies in choosing specific actions, given the plethora of available technology options. A market-driven

approach resolves the technology question by focusing on the customer:

s Who is the buyer for each application? The residential consumer buys energy services; the utility buys automated metering.

s What does the buyer need? Why would the buyer purchase the service? The consumer may buy inhome network communications for convenience (to control appliances) or economics (to save money by choosing a time-of-use rate and shifting load). The utility would buy automated metering to reduce meter-reading costs, billing costs, and interest expenses associated with delayed cash flow.

Despite the variety of communications technologies in the marketplace, utilities can move forward with wireless automated metering without either suboptimizing their long-term solution for metering or precluding participation in future communications-related energy or other consumer services. Wireless metering is complementary, rather than competitive, with other emerging communications technologies, from PCS to two-way broadband networks.

Narrowband wireless combines the lowest cost and highest reliability with utility control as an optimal solution for collecting

metering data. Yet, implementing narrowband wireless today keeps the door wide open to tomorrow's applications, whether those turn out to involve delivering metering data to consumers via a broadband link to the Internet or feeding usage information into a home controller that uses an inhome power-line carrier network to control appliances. t

Chris S. King is vice president of strategic planning for CellNet Data Systems. He formerly managed Pacific Gas & Electric's time-of-use and other innovative rate programs.Complementary, not CompetingIn 1994, the number of cellular phones in use increased 50.7 percent; the number of pagers in use rose 23.7 percent (em even though both technologies enable mobile communications and are mostly used by the same individuals.

Why do people have both cell phones and pagers?

A page is cheaper when a call is not required, unobtrusive in a meeting, as well as smaller and easier to carry. Pager batteries also last much longer than those in cellular phones. And pagers offer superior radio coverage (em a traveler can receive a page, at very low cost, in a plane flying over a metropolitan area.

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