Business and Regulatory Issues Slow Commercial BPL
>From Communications Daily
Friday, August 20, 2004
Faced with the recent shutdown of at least 3 trials (CD Aug 11 p4), the
broadband over power line (BPL) industry is asserting the technology
works, and delays in large-scale commercial deployments resulted from
business and regulatory issues.
Most pilots have moved past the technical stage and are into marketing
trials, said Brett Kilbourne, regulatory dir. Of the United Power Line
Council (UPLC). The "greatest doubts" about BPL technology are being
created by the Amateur Radio Relay League (ARRL), said Power Line
Communications Assn.(PLCA) Pres. Alan Shark: "There is a lot of
misinformation being spread by ARRL. This has become like an unmitigated
war that ARRL has declared on this industry."
It's one thing to conduct a small scale technical trial, but commercial
deployment involves working out business and other internal issues at
various levels of a utility, said Kilbourne. Adding to the mix are
unresolved FCC and state regulatory issues, especially for investor-owned
utilities (IOUs), he said, and these may also factor into utility
decisions on "how fast they want to move forward. There is a lot of the
same mentality in the utility industry that they want to be first to be
second" -- fast followers, not pioneers. He said he expected to see more
traction in deployments after FCC rules come out: "I definitely believe
that will eliminate some of the uncertainty."
Kilbourne said the recent shutdowns of trials weren't for technical
reasons. For instance, he said, the trial in Raleigh by Progress Energy
Corp. was stopped after the utility collected all the information it
wanted. "They went ahead and decided to rework the data and that's what
they are going through at this point and it's not that they are getting
out of BPL." One of the issues that the utility raised was regulatory
uncertainty, he said. When the FCC comes out with its rules, utilities
that have completed trials will have an easier time making up their minds
about going commercial, he added.
Most industry executives agreed there are more BPL technology providers
now than when the trials started a couple years ago. One official blamed
unsuccessful trials on some providers that sold equipment that didn't
work well, was very expensive, and had safety issues and risks of
interfering with ham radio. Another official said the trials that had the
greatest problems can all be attributed to one technology provider.
What ARRL doesn't realize, he said, is that BPL has different
technologies that operate differently. In some cases, smaller companies
find it difficult to get financial backing, he said: "So some of the
stuff they
are doing may take a little bit longer and cause some market confusion."
Some products now deployed were designed for European applications
different from those in the U.S., he said.
Jay Birnbaum, pres. of Current Technologies, which is partnering with
Cinergy, an Ohio utility, to provide commercial BPL service in
Cincinnati, said his company had kept its operations low key for
competitive reasons.
"We know we are going to have DSL and cable trying to compete very
heavily with us and they have the wherewithal to do that." The end game
for the nascent BPL industry, he said, wasn't merely to show the
technology works but to develop a "real business, economically viable
for the long term that can compete with cable and DSL. We still think we
are top of the first innings right now." As for why BPL hasn't taken off
more, he said some utilities had hooked up early with systems that ended
up not being
technically and economically feasible: "Without seeing the fruits of
their labor they are disinclined to go forward." Another reason, he said,
was that utilities "generally tend to move very slowly." Utilities are
reluctant to adopt new technologies -- especially when energy and telecom
stocks have been hit hard the past several years, Birnbaum said. Many
also lost a lot of money in telecom investments in the late 1990s, he said,
and the recent blackout forced them to refocus on their core electric
distribution business. Many utilities don't see BPL as a broadband
product but something that will enhance their electric distribution
through automated meter reading and outage detection, he said.
Birnbaum didn't provide details of the company's commercial deployment in
Ohio beyond saying it's "continuously expanding and we have many thousand
homes passed." He said Current was in discussion with several small and
medium utilities that are looking at deployment. But, he said, they "tend
to move very slowly and they tend to be a little conservative." He said
he expected to see more deployments in a couple years.
PLCA's Shark said large-scale BPL rollouts would ensue when utilities see
the success of commercial deployments in Manassas, Va., and by Cynergy in
Cincinnati. Once utilities see that the technology works and has gained
customer acceptance, there will be more takers because what's being done
in those places is replicable elsewhere, he said. But, he said, he
expects municipal utilities such as Manassas rather than IOUs to be
leaders in BPL
because they have "more control over their own destinies." Shark, who
heads the IEEE's BPL advisory committee, said having standards in place
wouldn't necessarily hasten deployment: "There is still a lot of
experimentation going on. You don't want a standard at a time when people
are learning new things about how it works." The technology deployed in
Manassas and Cincinnati "works great," he said, and future
standardization won't prevent these systems from deploying further. He
said the advisory
committee would likely make recommendations to the IEEE by April next
year. -- Dinesh Kumar
Source: Communications Daily - August 20, 2004
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