The Federal Communications Commission looked to take its multi-modalbroadband competition initiative to electrical outlets in the U.S., butindustry analysts question the significance of the broadband over power line(BPL) technology, which may not get the juice it needs from utilitycompanies.
The FCC announced this week rule changes that allow Internet and networkaccess by power line, insisting that it is safeguarding existing servicesagainst interference. While there is some criticism that amateur ham radiomay suffer from the newly approved power line application, the FCC said itis limiting the rule changes to pilot projects and continuing to study thematter.
Meta Group senior analyst David Willis said although the FCC initiativeto breed more competition into the U.S. broadband market may have itsmerits, the power line broadband effort is unlikely to do so.
“It’s hard to make a business case,” Willis told TechNewsWorld. “Giventhe current war between the DSL guys and the cable guys, this is not goingto be good for utility companies. There’s no business case for the utilitycompanies.”
Broadband For All
The FCC said in a statement that the BPL rule changes were aimed at increasingthe availability of broadband to wider areas of the country, including ruralareas, since power lines reach virtually every home.
The commission said BPL would enhance competition in areas already servedby cable or DSL broadband by providing another alternative.
Lastly, the commission indicated that access to BPL would facilitatethe ability of electric companies to manage the power grid by deliveringremote diagnosis of electrical failures.
Failed Attempts Already
Despite the FCC rule changes, BPL faces several significant hurdles,including issues that have not been overcome in the past, according toWillis.
“People have been trying this for a number of years and it’s never beensuccessful,” Willis said.
The analyst indicated the FCC was grasping somewhat to find ways tointroduce more competition into broadband, citing the failure of satellitehigh-speed Internet service.
“The only thing they can find is this broadband over power line,” Willissaid.
Frost & Sullivan industry analyst Imran Khan toldTechNewsWorld that despite some testing and potential for another revenuestream, utility companies would have to invest as well, and it could meandivergence from their core competencies.
“They could maybe expand the [broadband] capabilities in rural markets,but they’re not big enough to make it worthwhile,” Khan said.
The analyst added that BPL would also have to be technically on par withcable and DSL broadband, which are both improving in performance anddropping in price.
Khan said that even in places such as Ireland or Germany where BPL has seensome deployment and success, it was not widespread enough to make a mark onthe radar.
Wireless More Attractive
Both Willis and Khan said that broader, faster wireless broadbandtechnologies are much more likely than BPL to serve the market segments thatcable and DSL currently do not reach.
Willis said coverage through Wi-MAX, a broadband wireless technologycapable of longer geographic reach, could allow wireless carriers to turn aprofit by 2007, presenting a much more favorable opportunity compared tothat from BPL.
Khan added that wireless Internet service providers (WISPs) — which aresuccessfully serving smaller, rural markets around the country — are usinga variety of technologies to serve the pockets without high-speed Internet.
“There are more than 1,000 wireless Internet service providers across thecountry,” Khan said. “These WISPS are very active in these rural markets.”