Oct. 25--The nation's top telecommunications regulators are convinced that
electric-power lines are finally ready to become a revolutionary new way for
Americans to get high-speed Internet access, unleashing competition for cable
and phone giants. But the utility companies that would actually deploy the services remain
overwhelmingly skeptical. Of the nearly 160 investor-owned utilities in the
United States, dozens have tried out "broadband over power line"
systems. Only one -- Cinergy Corp. in Cincinnati -- has moved ahead with a
significant commercial rollout, so far attracting barely 1,500 subscribers.
Dozens of utilities that ran trials of the service in the last three years took
a pass on making a business venture of it. Locally, Western Massachusetts Electric Co. is starting up a 25- home trial
in Agawam of a hybrid system that carries Net traffic on medium-voltage lines
and uses wireless gear for the last-mile connection to homes. But the state's
two dominant electric utilities are both steering clear. "This is not our core business," said Deborah Drew, a spokeswoman
for Massachusetts Electric Co., the state's biggest utility with 1.3 million
customers. "We think it works, but we certainly wouldn't want to be in the
business of being an Internet service provider." Michael Durand of NStar Electric, which serves nearly 1 million customers in
Greater Boston and Cape Cod, said: "It's an evolving technology that
certainly is exciting, but we don't have any plans to enter that business at
this point." NStar's last venture into telecommunications, a 49 percent
stake in cable/telecom carrier RCN Corp.'s Boston network, proved to be a fiasco
leading to $200 million in accounting write-offs. The deep hesitancy among utilities hasn't squelched one of the leading
evangelists for the technology, Michael K. Powell, chairman of the Federal
Communications Commission. "Every time there's new technology, I hear the same thing," Powell
said during a Boston appearance last week. "I am unabashedly an optimist. I
believe this stuff has way more potential than the cynics give it." Powell and other fans of the technology note that virtually every US home and
business already has an electric wire coming in. Broadband over power line
service injects data traffic onto existing wires, at high-frequency levels that
escape interference from electricity. Companies like Amperion Inc. of
Chelmsford, whose backers include Internet giant Cisco Systems Inc. and Ambient
Corp. of Newton, use various pieces of gear to shunt the Net traffic around
transformers and circuit breakers to deliver it to end users. "Subversion is a wonderful thing," Powell said. "The broadband
world is so much better if we have multiple service providers and multiple
technologies." Without saying how soon it will happen, Powell added:
"I'm very bullish that this country will have three to five broadband
architectures" in many areas, which could include various combinations of
cable, telephone digital subscriber lines, new optical connections deployed by
phone companies like Verizon Communications Inc., and wireless broadband as
well. Telecommunications specialists say a big reason utilities are leery of the
technology is that industry officials are still two or more years away from
developing common standards for powerline broadband gear. Phone and cable
companies like Verizon and Comcast Corp. can shop for bulk DSL and cable
broadband gear from multiple vendors who build it to industry standards, but
utilities today remain locked in to unique, proprietary technology, something
they want to avoid. Utilities doing powerline broadband trials also chronically battle with ham
radio enthusiasts about reported interference with radio transmissions, a
problem the new FCC rules seek to decisively regulate. "You also need to talk about whether there's a business model for coming
in late with what is basically a me-too broadband service," said Matt
Davis, an analyst with The Yankee Group in Boston. Because of lingering
bitterness over their disastrous 1990s forays into telecom, like NStar's big
losses in RCN, Davis said he thinks many utilities' investors are pressuring
them to steer clear of running broadband networks, even if they use their
existing electric lines. New York's Consolidated Edison Corp. has been testing Ambient powerline
broadband systems for years. But asked whether it plans to go to a commercial
rollout, ConEd spokesman Chris Olert said: "No way. We're not in the
broadband business. Our primary interest is in utility applications" such
as using communications channels over electric lines to read meters and monitor
blackouts. ConEd is letting EarthLink Inc., an Atlanta-based Net service provider,
attempt to use its wires to provide high-speed access to a Manhattan apartment
building. EarthLink has already conducted trials with North Carolina utilities
that have led nowhere yet. Mass. Electric's Drew said that while the Westborough-based utility has no
interest in providing Net service directly, it would be open to a partnership
with a provider like EarthLink. "We're open to talking to ISPs," Drew
said. "We'd basically take a landlord approach and rent out space on our
lines, but we wouldn't participate in providing the service."
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