Utilities Turn Up The Juice On Power Line Communications

Will Surge In Activity Push PLC Off The Launch Pad This Time

New momentum is building around power line communications, which can be used to establish broadband local connections over energy companies' power grids. If PLC is actually commercially deployed in a significant way in the U.S. this time around, it could offer competitive local communications providers an important new broadband path into customers homes and businesses.

"I've always said that broadband is the policy issue of the day," said FCC Chairman Michael Powell in a commission meeting Jan. 15. "Assuming any technical considerations can be worked through, Power Line Broadband, or PLB, provides an enormous opportunity to bring a third broadband option to virtually every home and building in America by turning every power outlet into a potential broadband link."

From the utilities' standpoint, PLC is interesting on at least two fronts. It creates the potential for a new revenue stream through retail or wholesale broadband local access. PLC also brings new intelligence to utility networks, offering energy companies the ability to more efficiently manage their core energy businesses by enabling technicians to remotely do load management, outage monitoring, notification, and the like.

Leif Ericson, business development manager at Southern Telecom Inc., says both of those benefits are key drivers of his company's interest in PLC. The company is also interested in how its parent Southern Company, a super-regional energy concern in the Southeast, could leverage PLC from a retail standpoint by allowing customers to remotely control air conditioners and other household appliances.

Southern Telecom provides long-haul and metropolitan dark fiber connecting Atlanta with other smaller cities throughout the Southeast. The company is looking at PLC as a means of providing broadband access on a wholesale basis, at least initially, says Ericson.

For now, Southern Telecom is in field trials with PLC vendors Ambient Corp. and Main.net Communications Ltd. During an interview with xchange in late March, Ericson said the company expected to announce a third PLC vendor "in the next couple weeks."

The Ambient equipment had been installed as of mid March, and service to five to 10 customers on the Birmingham, Ala., PLC network is scheduled to be turned up this month. Before the end of the residential test, about 30 customers are expected to be online with high-speed Internet access. Southern Telecom's trial with Main.net, in Atlanta, is about the same size and was expected to launch in late March.

Although Ericson says Southern Telecom is still in "the R&D phase" with PLC, he explains the discussion about PLC has moved beyond the issue of whether the technology works. "Technology is not a huge concern," says Ericson. "Technically, this will work. There are two other elements we are looking at at this point -- can we make money at it and regulatory" issues.

Southern Telecom has hired a consultant to help it understand the costs of PLC, what territories potential resellers of a possible wholesale broadband access service would be interested in and other key business issues, says Ericson. By the middle of the year, Southern Telecom expects to have a handle on the cost points of PLC.

Jeff A. Norman, vice president of sales at Reston, Va.-based vendor Main.net, tells xchange that its end-to-end PLC systems will sell in volume for about $160 per household passed. He notes that's a third to a fourth of the cost of DSL or cable modem deployments. Philip Hunt, chairman and CEO of PLC equipment vendor Amperion Inc., also expects systems to sell for roughly $150 per home passed, in volume.

Building Momentum

Main.net has been working at PLC since 1999. Customers in 40 countries including Austria, Germany, the Netherlands and Sweden are using its technology on a commercial basis. Main.net brought the technology to the U.S. in October 2000 and is now in what Norman calls "precommercial deployments" with a dozen U.S. utilities in California, Georgia, Michigan, Missouri and Washington state.

In addition to Southern Telecom, Main.net's publicly announced U.S. trial customers include Ameren Corp., which is exploring PLC for high-speed Internet access, and PPL Telcom, says Norman. St. Louis-based Ameren provides energy services to 2.2 million customers in Missouri and Illinois. Ameren spokeswoman Susan Gallagher declined an interview request on the company's PLC efforts, saying the company is in "such a small pilot test," and noting it hasn't made any commitments to go commercial. "Our involvement in it has been inflated" by the media, she adds.

PEPCO Holdings Inc. also is in the early stages of setting trials with Main.net and another vendor, says Rick Swink, corporate strategist at the Washington, D.C.-based utility holding company.

Main.net expects to announce its first commercial customers in the U.S. this quarter. "I've been at this for two-and-a-half years, and we're coming up on the first commercial launch," says Norman. "Once we get a few initial deployments with multiple vendors, it will move the industry forward."

In addition to the pretrial work it's doing with Main.net, PEPCO has been involved with PLC vendor Current Technologies LLC over the past several months.

PEPCO Holdings serves 1.8 million utility customers between its two units. Subsidiary PEPCO serves Washington, D.C., and the Maryland suburbs. Subsidiary Conectiv serves parts of Maryland; southern New Jersey; the eastern shore of Virginia; and Wilmington, Del. The primary focus for PEPCO as it relates to PLC has been how the technology can help it more efficiently manage its utility operations, says Jay Demarest, finance director at PEPCO. High-speed Internet access has also been part of its tests of the technology.

Currently PEPCO communicates with customer meters using wireless communications or phone lines, he says. It connects to technicians' vehicles using mobile radios communications. "With PLC we can move into direct communications on a more regular basis with customer meters [to look at] load profiles per customer, when customer service is interrupted" and other metrics, he says.

More than a year ago PEPCO did two small trials, with 10 customers each, using the Current Technologies equipment. "Over six months we saw that customers using [the PLC-based high-speed Internet access] were satisfied, but with only 10 homes at a time, [the network was] not getting much bandwidth stress." Therefore, at the end of last year, PEPCO set out to serve 100 homes with the PLC equipment to see how it will affect performance. As of late March, 61 homes were connected.

"Based on the trial we did a year ago, we're seeing promising results. So we think the technology will be deployable," says finance man Demarest. "The next phase of testing will decide to what extent it's commercially deployable."

Current Technologies has a second technology/marketing trial running with Cinergy Corp. in Cincinnati, Ohio, says Joseph Cufari, vice president of business development for the PLC vendor whose solution delivers 256kbps to 1.5mbps symmetrical bandwidth. That test also serves about 100 homes. "We don't charge for service, but we survey customers, asking what they would pay for it."

Meanwhile, Amperion, considered one of the more important PLC vendors with investors including Cisco Systems Inc. and two utilities, has a handful of trials running. The company has a unique solution that pairs PLC with Wi-Fi technology (see related story, page 12).

American Electric Power, an 11-state utility headquartered in Columbus, Ohio, and a founding investor in Amperion, is working with the vendor on a PLC trial serving less than 100 end users in Dublin, Ohio. Amperion also announced last September that PPL Electric Utilities in Pennsylvania was testing its PLC equipment. The Allentown, Pa., test by Amperion investor PPL is ongoing, says Hunt.

Additionally, Amperion has PLC trials with customers at three other sites, says Hunt. "Two of those trials are entering commercial phase," he tells xchange.

Progress Energy/Progress Telecom, which says it has been evaluating PLC since June 2000, tells xchange it has also selected Amperion for a 90-day test for which it began installing equipment in early March.

Hunt expects big things in the future for PLC. "Our [electrical] grid already is in place, that's what we're using -- one of the world's largest assets," Hunt says. "Even if we're only a little bit right, the opportunity is enormous."

Amperion Inc.'s Power Line Architecture

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