Powerline Ethernet Gets the Nod
The FCC decided against changing the rules governing BPL last week, a move welcomed by supporters of the technology (see BPL Players Applaud FCC). The FCC also praised the rise of BPL, noting that it offers a "third line" into the home, next to DSL and cable, and offered BPL as proof that competition thrives in the market.
The past two years have seen several BPL trials pop up in rural U.S. areas, and some companies have even installed permanent deployments. But it's difficult to see BPL becoming a widely successful business for utilities, says Meta Group Inc. analyst David Willis.
"If they have the goal of having cheap broadband in, say, two years -- by that time, the market will have completely changed. It won't be about $30 broadband; it'll be about wireless and security and voice and other things," Willis says. With fiber-to-the-home (FTTH) and WiMax deployments already underway, the utilities "have so much catching up to do."
The best area for BPL would be upscale suburbs -- but that's the case for every other broadband technology, especially FTTH. "No matter where they go, they're already getting squeezed by somebody that's already in the market," Willis says.
Still, others believe BPL will be necessary to keep competition fired up in the U.S. market. Among them is "apprentice" venture capitalist and Ethernet creator Bob Metcalfe, who remains unconvinced that FTTH alone can create competition (see Bob Metcalfe). Some big names are starting to get involved with BPL. Cinergy Corp. is working with Current Communications Group LLC to bring BPL to a planned 50,000 homes in Ohio, Kentucky, and Indiana by year's end. And EarthLink Inc. is hoping to deliver BPL in Manhattan, using Con Edison Communications Inc. (NYSE: ED) power lines and technology from Ambient Corp.
Rural utilities are trying their hand as well. The Central Virginia Electric Cooperative (CVEC) tried out BPL with a small trial in March. The utility contacted 500 customers with a "buyer beware" letter, saying that the service could deliver 256 Mbit/s bidirectionally but noting that it was unproven and would come with limited maintenance. About 50 homes and businesses responded, with results good enough for CVEC to consider expanding the service further.
"We spent a number of months working on the equipment and the software, but it has worked exceedingly well," says Greg Kelly, CVEC's business development manager.
Aside from the business case, a few technology concerns linger for BPL, including interference, particularly with Ham radio. Power lines already interfere with radio signals -- anyone listening to AM radio in the car can tell you that -- and it's long been suspected that BPL will increase that interference in higher-frequency bands, tromping over other signals.
Kelly says CVEC's gear provider, International Broadband Electric Communications (IBEC), has been working on solving those problems with a combination of methods -- a wireless technique called notching; the use of ferrites, magnets that can be found in some power cords; and a lower-power signal, something akin to what's used to deliver powerline Ethernet within a building.
Meta's Willis thinks it's likely is that the FCC is just trying to show it isn't coddling phone companies at the expense of other providers. The problem is that BPL is only beginning to roll out and hasn't proven itself in large-scale deployments.
"It's a little bit pathethic that this is the best the FCC can do to introduce competition," Willis says. "They've talked about intramodal competition for some time, but the only thing they can point to is cable vs. DSL."
— Craig Matsumoto, Senior Editor, Light Reading