Electric utilities serving the state’s rural areas are warming to the prospect of delivering high-speed Internet over household power lines, as several are in various stages of exploring the technology.
Offering broadband over power lines to rural areas is becoming a new front in the competition between cable, telephone and, now, electric companies. Power providers in Boone and Monroe counties, and Cincinnati-based Cinergy Corp., are testing the equipment, although Cinergy is not offering the service to Indiana customers yet.
More Indiana utilities serving rural areas are taking a look at BPL, said Scott Lee, CEO of Alabama-based International Broadband Electric Communications Inc. IBEC supplies the hardware to power companies wanting to deploy BPL and has a contract with South Central Indiana REMC in Martinsville.
Lee said he has spoken to 20 utilities and expects to have agreements with three within the month.
“There’s a huge opportunity for us in the state of Indiana,” Lee said. “With these [electric] cooperatives, their original mission was to bring electricity to customers where no one else would do it. This is the same concept, except with broadband.”
In its infancy, BPL could become a formidable challenger to the likes of San Antonio-based SBC Communications Inc., which continues to invest in its digital subscriber line technology.
“It’s an emerging competitor,” SBC Indiana spokesman Mike Marker said of BPL. “It’s another example of more consumer choice that people have.”
More than 75 percent of SBC customers can receive the phone company’s DSL offering, including those in Lebanon. But Lebanon Utilities, which serves 7,500 Boone County residents, has begun strapping to telephone poles a BPL system funded by a $2.2 million loan.
The BPL system consists of polemounted boxes spread every half mile connected to an Internet hub-and to the wiring that runs into customers’ homes and businesses. Subscribers connect their computers either by using a wireless network that transmits signals a few thousand feet or by purchasing a modem that plugs into a wall socket. By bundling radio-frequency energy on the same line with the electric current that is already carried, data can be transmitted without a separate line.
Indiana trails the nation in broadband access, with about 30 percent of Hoosiers wired for the high-speed access, compared with 50 percent nationally. Only about 5 percent of people in rural areas nationwide, those with fewer than 10,000 residents, have high-speed access vs. 65 percent in cities with more than 250,000 residents.
Besides Lebanon, smaller cities such as Richmond and Crawfordsville that are members of the Indiana Municipal Power Agency, a not-for-profit based in Carmel, also are considering deploying the technology, said Raj Rao, the agency’s president.
“Municipalities have to jump in, because somebody has to do it,” he said. “It’s basically just a service. We’re not in the business of making money anyhow.”
Scottsburg, in southern Indiana, passed on BPL in favor of a wireless network. The town made the decision after Verizon declined to invest in DSL technology because it said the investment outweighed the economic return due to the small number of residents.
BPL detractors point to the same argument. The industry rule is that seven homes per mile need to be connected to make the service viable for the provider. In Martinsville, where South Central Indiana REMC is piloting BPL west of the town, the utility handed the investment in infrastructure to IBEC in Alabama. The Morgan County utility will receive a commission on monthly user fees, and in the process, eliminate its financial risk if the experiment fails, said Kevin Sump, CEO of the utility.
Ninety customers are participating and another 50 are in the process of connecting. The company will cap the pilot program at 200, then will evaluate whether to proceed to a full offering. Customers are embracing the service, Sump said.
“Our main concern was getting broadband service to our customers,” said Sump, who is participating in the pilot. “There are some tremendous advantages over competing broadband services.”
Not everyone shares his enthusiasm, though. The loudest opposition to BPL has come from the ham radio operators, who contend the power line transmissions interfere with other licensed bandwidth users. They say overhead electrical power lines and residential wiring act as antennas that unintentionally radiate the broadband signals as radio signals throughout entire neighborhoods, causing the interference.
Allen Pitts, spokesman for the Connecticut-based American Radio Relay League, compared the noise to a helicopter hovering over a home. The 160,000-member organization has lobbied the Federal Communications Commission to reconsider BPL.
A resolution in the U.S. House of Representatives has been introduced directing the FCC to take a second look and possibly limit the number of frequencies BPL providers can use.
Lee, at IBEC in Alabama, said his company “notches out” the frequencies used by short-wave broadcasters such as ham operators and does not transmit on them.
While the ARRL wants action taken, it is not convinced BPL will become a serious contender in the broadband industry.
“I believe that in five years, BPL will be about as viable as your 8-track tape player,” Pitts said. “It is not economically feasible. The areas are too rural and sparse.”
Cinergy, parent of PSI Energy Inc. in Plainfield, said last year that the utility planned to provide BPL service in Indiana and Kentucky in 2005. A Cinergy spokeswoman said the plans are still under consideration, although no timetable for deployment has been set.
The customer-owned Lebanon and Martinsville utilities don’t fall under the rate jurisdiction of the Indiana Utility Regulatory Commission. But large utilities, including Cinergy, do. IURC spokeswoman Mary Beth Fisher said commissioners are not aggressive in regulating everything and will give BPL a chance to develop before determining what, if any, oversight to provide.