Those wanting high-speed access to the Internet essentially have two choices: Buy it from a cable TV company or from the local telephone company.
But a third option stands in the wings for many consumers: the electric company.
The idea seems simple: Millions of miles of power lines already run to nearly every home in the United States. Just send an Internet signal through them and everyone can be connected.
Unfortunately, it's not quite that easy in practice. Utility companies face technological hurdles and they have had to be persuaded that it's worth their while.
But now Broadband over Power Lines (BPL), with investments from big-name companies including Google and IBM, is beginning to move beyond small trial projects to deploying systems for large communities. For example, some 50,000 homes in the Cincinnati area have signed up for BPL Internet- service. And in Manassas, Va., a town of 37,000, BPL service is provided by Communication Technologies Inc. "Our hope is that in the next two years you'll see millions of homes" using BPL, says Kevin Kushman, vice president of corporate development at CURRENT Communications Group in Germantown, Md. CURRENT is partnering with Cinergy Corp. to provide BPL in the Cincinnati area. [Editor's note: The original version erroneously stated that Manassas provided its own BPL service.]
"We're crossing the chasm," Mr. Kushman says, from simply proving that BPL is technologically sound toward its widespread commercial use. The company also has smaller tests under way in Hawaii and suburban Washington, D.C.
One optimistic forecast, from Telecom Trends International, a market-research firm in Falls Church, Va., predicts that worldwide revenue from BPL will soar from $57.1 million last year to $4.4 billion by 2011.
"From what we've seen, there's no doubt that speed-wise and cost-wise this can be an attractive alternative and another 'pipe' to the home for broadband," says Kevin Brand, vice president of product management for EarthLink, an Internet service provider. He expects EarthLink will offer a BPL product next year.
Highly regulated power companies, which operate as local monopolies, generally take a conservative approach to new ventures, especially those outside their core mission. What is winning them over has been the possibility of using BPL to improve efficiency. With BPL, utilities can quickly identify where outages have taken place, read meters remotely, and conduct preventive maintenance, such as replacing a transformer before it fails, by monitoring unusual "noise" on the system.
"It's a major driver in getting the BPL systems deployed," Kushman says.
While BPL faces strong competition in urban and suburban areas already served by cable and phone companies, underserved rural communities could benefit. But don't include single homes miles from any others, says Alan Shark, executive director of the Power Line Communications Association, a group of utilities and system providers interested in BPL. An Internet signal degrades as it travels long distances over a power line. The signal needs to be boosted along the way. Running service to a single home is too costly, he says, but service to clusters of perhaps 50 homes or more is feasible.
The American Radio Relay League, a national association that represents ham radio enthusiasts, has conducted a long campaign against BPL, claiming that adding the signal to power lines interferes with amateur radio broadcasts nearby. Recently BPL companies offered to "notch out" that part of the BPL signal that conflicts with ham broadcasts, but the controversy appears to be far from settled.
"It still is an issue, and as long as it is an issue, it's going to be a major hindrance for BPL," says Nicole Klein, an analyst who tracks broadband trends at the Yankee Group in Boston. She's less optimistic about BPL's future. "It's kind of touch-and-go," she says. "There have been many, many trials but only a couple of commercial offerings."
Besides competing with cable and phone companies on price and speed, BPL also faces challenges from other technologies, including efforts to bring fiber-optic cable into homes and WiMAX, a wireless signal that can carry for several miles.
With the United States ranked only 16th in the world in broadband Internet penetration per capita, BPL would seem to have some untapped markets to explore. The key will be whether it can attract enough big investors that pushed cable and phone companies into the Internet business, Mr. Shark says. The hunger for broadband service is growing, and supplying it is "incredibly important ... to the economic growth of this country," he says.