Broadband Over Power Lines: Ready For A Big Breakthrough?

Broadband over power lines, which delivering Internet access to homeowners and businesses, is finally becoming a reality as pilots and tests abound.

November 21, 2005

3 Min Read
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Broadband over power lines (BPL), which was first touted in the late 1990s as a way to deliver high-speed communications to homeowners and businesses, is finally becoming a reality as pilots and tests abound. And firms, including Google, smell broadband gold, and are pouring money into the new technology.

According to Steve Bridges, vice president of Aon Technology and Professional Risk Group, Chicago, Ill., broadband over power lines revenue growth has been predicted to increase from $57 million in 2004 to $4.4 billion in 2011. In addition, sensing the promise of the technology, a number of large technology companies, including Google, IBM and Motorola, have decided to heavily invest in BPL service. Notably, Google, Hearst Corp. and Goldman Sachs have recently made a combined capital investment of $100 million in Current Communications, a broadband over power lines service provider.

Despite those investments, the promise of several years ago of a technology that would compete head-to-head with cable and DSL broadband services isn't likely to ever come to fruition, according to technology experts. It's not that broadband over power lines doesn't have a spot in the broadband communications marketplace. It's just that the spot is, and will likely, remain small, according to many technology experts, though others see promise in the technology (see sidebar).

In the last five-plus years, cable and DSL providers have spent countless dollars investing in their technologies and have upgraded both the speeds that can be provided and the accessibility of their technologies, according to Young-Sae Song, director of corporate marketing for Redback Networks, San Jose, Calif. In addition to those seasoned technologies, broadband over power lines would also need to compete with WiMax, which is also starting to compete in the high-speed communications market.

"I wouldn't even call [broadband over power lines] a niche," Song says. "For most, it would be the second or third choice behind cable and DSL."Song and others expect broadband over power lines to primarily be deployed in rural or smaller communities, where DSL and cable service are limited or non-existent. Another use could be utility-company specific, to communicate throughout its physical network, including headquarters, power plants, sub stations, etc.

However, broadband over power lines could become a more widespread option in Europe and Asia, according to Song. The 220-volt power supply system on those continents is better suited to provide high-speed communications than is the power supply system in the United States.

Broadband over power lines faces technology and business challenges, though. As the technology exists today, broadband over power lines offers a maximum capacity of about 4 MB, according to Ted Demopoulos, an IT business consultant based in Durham, NH. While this is fine for many of today's applications, it's too slow for providing video over IP, which many see as the next step in the evolution of broadband delivery.

Even that maximum speed is theoretical and could drop quickly if many people are accessing the broadband service at the same time, Song adds. While cable and DSL have had the same sharing issues, those technologies and infrastructures have been upgraded, so adding more users to the system isn't as noticeable to legacy users.

Broadband over power lines uses radio signals, so it also interferes with some emergency communications and can have noise issues of its own, according to Demopoulos. "The power lines were never devised to carry this type of signal."

The competing technologies don't have these noise issues.From a business perspective, the cable and DSL providers have been aggressive in building their customer bases and physical infrastructures, while power companies have largely concentrated on their core businesses over the past several years, according to Song.

Though telecom and power companies are still labeled as "utilities" by some, the businesses are very different, Bridges adds. So Aon has recommended that any power company considering a broadband offering consider carefully risks involved, including possible competition from other broadband suppliers, data theft and security.

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