[EIDXA] Seattle Times BPL Article

[Jim Spencer]

http://seattletimes.nwsource.com/html/businesstechnology/2001955375_powerline14.html

Monday, June 14, 2004, 12:21 A.M. Pacific


Broadband "in the sticks"

By Peter Lewis
Seattle Times consumer-affairs reporter

WENATCHEE HEIGHTS, Chelan County - A select group of Internet users is
poised to receive high-speed connections through something found in
virtually every house: the electrical socket.

In a test directed by the Chelan County Public Utility District, these
consumers will get a specially equipped modem, plug it into a wall socket
and surf the Internet at speeds that could rival those attainable through
cable or phone lines.

It's called "broadband over power line" (or BPL), and the test here
apparently marks the first use in Washington state of this emerging
technology. In a nutshell, BPL delivers the Internet over existing electric
wires.

Other similar tests are taking place in pockets around the country, but
whether the technology becomes commonplace is a matter of speculation.

Dmitri Mandelis, president of LocalTel/NW Internet, one of the larger
Wenatchee-area Internet-service providers through which Chelan County
expects to deliver BPL, acknowledges that it presents marketing challenges:
no proven track record locally, no clear sense of how fast the service will
be, or even how long it will last. On the other hand, Mandelis notes,
there's very little downside for people without alternatives.

Take state Sen. Linda Parlette, R-Wenatchee, who says she lives "in the
sticks" and has been forced to rely on dial-up access, which is at best five
times slower. "I never surf the Net because I just don't have the time with
this (dial-up) service that I have," she said.

The Chelan test is set to be turned on this summer, and the utility is
committing to a 60-day trial - after which it will review the technology's
performance.

2,000 paying customers

Utilities around the state are paying attention.

Seattle City Light is examining the technology for a pilot project in the
South Lake Union area that's quickly becoming a biotechnology center. "BPL
is worth exploring," said Bill Schrier, the city's chief technology officer.






Puget Sound Energy's Bill Gaines, vice president of engineering and
contracting, said his company also is receptive.

Nationwide, there are 50 to 75 trials and an estimated 2,000 paying BPL
customers, according to David Shpigler, director of research at United
Telecom Council, a Washington, D.C.-based trade group focusing on
telecommunications for utilities and energy companies.

In addition, more than half of 250 existing broadband users showed "strong
interest" in BPL, according to recent online survey by RKS Research &
Consulting, a Danbury, Conn., company.

One of the most ambitious projects is under way in the Cincinnati area,
where Cinergy, a private utility, has invested $10 million with a vendor
called Current Communications. They have plans to make BPL available to
50,000 Ohio homes by the end of this year.

Relies on existing network

Still, that's not even a dent in the nation's broadband market, which has
reached roughly 50 million homes, chiefly through cable and telephone
companies. But Shpigler, who also runs a management consultant company that
advises utilities on telecommunications, is bullish on BPL, mainly because
potential providers can rely on an existing network - the power grid.

The idea is simple: Send Internet data over ordinary electric power lines,
which already blanket even sparsely populated areas. There are several
competing approaches, including a wireless variety.

The technology works with equipment that acts as a switch to transfer - onto
electric wires - the Internet data normally carried over fiber-optic cable
or copper telephone wire. Then, with the help of devices that regenerate and
purify it at given intervals, the Internet signal rides on power lines until
it's directed to a customer's house or business.

A nice plus: Taking BPL means your home becomes a network, because every
outlet becomes an Internet connection. Just plug a modem into a socket.

Considerable obstacles

As promising as the technology is, it does face considerable obstacles. Even
if it works, for instance, it's an open question whether utilities and
Internet-service providers can find a business model that makes sense.

For the pilot here, Chelan PUD is paying about $47,000 and tying in to its
relatively extensive fiber-optic system, which it currently uses to offer
its ratepayers both broadband and telephone service - and eventually TV -
through private service providers.

In many ways, the utility sees BPL as a potential way to extend its
fiber-optic system. It would wholesale BPL to private Internet providers
like LocalTel, which then would market the service to customers. The
retailer would repay the utility from fees it collects from customers.
LocalTel, for example, tentatively plans to charge $35, of which $18 will go
back to Chelan County PUD.

By contrast, BPL's commercial deployment last fall in Manassas, Va., a town
of 36,000 people near Washington, D.C., came with the help of private
capital. The city gets about 10 percent of revenues from residential
connections and 21 percent from businesses.

Even though Manassas is served by Internet cable service through Comcast, as
well as by DSL providers, the municipally owned utility decided to offer BPL
because it wanted to offer cheaper rates, said John Hewa, the utility's
assistant director.

BPL customers pay less

He said about 200 customers now take the service, paying $28.95 a month,
generally $10 to $20 less a month than DSL or cable connections. The city is
maintaining the BPL operation for the time being, but is actively looking
for a new franchise partner to run it.

Costa Apostolakis, president of Zplug, the Internet-service provider through
which BPL is delivered in Manassas, described customer satisfaction as "over
98 percent." He said most residential customers are getting service at 300
to 500 kilobits per second, comparable to DSL speeds.

But the next generation of BPL equipment offered by the city's vendor,
Main.net, is delivering much faster speeds. Commercial customers, for
example, are getting 7 megabits per second in both directions and pay $59 a
month, Apostolakis said.

Unlike in Manassas, DSL and cable-modem service have not been available in
Wenatchee Heights.

But a funny thing happened after Chelan County PUD announced plans to
experiment with BPL, which initially could serve about 30 residents. St.
Louis-based Charter Communications, the area's dominant cable company,
started offering cable-modem service to some of those same 30 potential
customers.

"It does seem very odd that shortly after the announcement (to deploy BPL)
they're out there stringing cable," said Bob Shane, Chelan County PUD's
networks fiber-optics engineer, referring to Charter. "If we've inspired
these people to offer broadband service, that's good for the customer."

Craig Watson, Charter's western division vice president for communications,
denied there was a cause and effect. Watson maintains Charter was planning
to extend its system before it knew BPL was coming.

Whatever the case, Parlette is tickled that after having no options, she now
will have a choice.

Good for competition

"I'm thrilled that choices will be available for this rural area that I live
in," she said. "My dial-up connection has been terribly limiting, especially
when you have a home legislative office."

Spurring competition - and accompanying downward pressure on prices - is one
big reason why the Federal Communications Commission has championed BPL as a
broadband alternative.

BPL operates as an unlicensed activity on a range of the radio spectrum the
FCC describes as "Part 15," a reference to the little tag on the back of
your TV, cordless or wireless phone, garage-door opener, baby monitor and a
host of other electronic gadgets.

By law, Part 15 devices must not interfere with licensed users. The FCC is
developing rules that would allow BPL to coexist with licensed users,
including ham radio operators.

BPL's record on that score has been mixed.

In Manassas, the utility and Main.net came to terms with local ham radio
operators. Bob Zaepfel, a spokesman for Olde Virginia Hams, said his group
approached the city after members started hearing serious interference.
Those talks led to adjustments to nullify the noise, he said, but the
interference has re-emerged in a particular neighborhood.

"The final chapter has not been written," Zaepfel said. "... As far as I
know, the city's posture hasn't changed. They still are interested in
accord, not discord."

Ed Hare, lab manager with the American Radio Relay League, a national group
of amateur radio operators, said problems have occurred in other areas.

But in Chelan County, Gary Nelson of the Apple City Amateur Radio Club is
pleased with what he's seen so far. He set up ham radio equipment within 10
meters of BPL-enabled wires and detected nothing. Nelson credited the Chelan
utility's vendor, GridStream Technologies of Nashville, Tenn., for
developing a compatible design.

Option for rural areas

Chelan County PUD's Shane said the utility was motivated to try BPL - as
well as a wireless project in the wings - for underserved customers. "We
hope it's a viable solution," Shane said.

Bob Olsen, a professor of electrical engineering at Washington State
University and formerly a consultant to a BPL vendor called Amperion,
believes BPL can provide service comparable to DSL or cable modem if
interference problems can be managed.

Backers maintain that, theoretically, BPL can achieve speeds up to 100 MB -
plenty fast enough to deliver video. Olsen is doubtful.

BPL's real market, he suspects, may be in rural communities that lack other
broadband options. That makes Wenatchee Heights a decent candidate.