The next year will be a critical in determining whether several electric utilities will expand their services to include high-speed broadband communications over powerlines, according to Primen, an energy market intelligence company and affiliate of Electric Power Research Institute (EPRI; Palo Alto, California, U.S.).

As part of an assessment of broadband-over-powerline (BPL) market readiness, Primen interviewed several of more than a dozen electric utilities that are testing BPL technology. Interviewees included Southern Co., Progress Energy, PPL and Con Edison, which are among the utilities investing in BPL trials, either directly or through their telecom affiliates.

Karen George, a Primen research director who co-authored the study, says, “Utilities have successfully demonstrated that the technology works. Customers participating in power company tests are getting high-speed Internet access today through their standard electrical outlets.”

What must happen next, reports George, is to determine whether BPL can be a viable business for electric utilities. “The economics of wide-scale deployment need to be demonstrated,” says George. “We don't know yet if the prices utilities will be able to charge for BPL, either to third-party providers or directly to customers, will be high enough to cover the costs of installing the equipment needed to make BPL work.”

Timing is an issue, according to Primen, as the most lucrative markets for broadband services are those areas not yet served by DSL and cable companies — and emerging long-distance wireless or satellite systems are also poised to penetrate those markets.

“The market appears to be heating up as last year's growth of the U.S. broadband market was close to 20%,” says George. “Many different providers — telephone, cable, satellite and others — want to maximize their share of this $15 billion market, and competition is beginning to drive down prices to consumers.”

While the competition among broadband providers intensifies, the first commercial-scale trials of BPL are getting underway in 2004, for instance at PPL Telcom in eastern Pennsylvania. In market trials, utilities plan to price broadband access competitively with DSL and cable.

With broadband being offered at as low as $29.95/month from some DSL providers, will power companies be able to compete on price and make BPL a profitable venture? The answer likely depends not only on whether they can successfully compete with other high-speed Internet providers — or lease lines to them — but also on whether they can use the broadband system for internal applications. These applications might include automated meter reading, communication with field personnel, distribution system management, power-quality monitoring, remote load control and fault detection.

“We might be at a nexus of technology advancement and market readiness,” says George. “BPL holds promise for utilities, but right now it still remains just promise. We believe that the 2004 utility trials will be telling.”

The study, Broadband Over Powerline: An Update on Trials and Prospects, is part of ongoing research on BPL and other emerging products and services conducted by Primen's Customer Insights Strategic Service.
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