UTILITIES REVISE BROADBAND-OVER-POWER-LINE ROLLOUT SCHEDULES

Some officials ascribed the delay in deployment to too much “optimism” on the part of service providers, while others attributed it to “brochure promotion” by companies that was unrealistic. There also were concerns about the impact of such delays on the utilities’ ability to raise capital on Wall St., but some industry officials disputed such concerns, saying that Wall St. had no expectation of a swift BPL deployment.

Manassas, which won city council approval in Oct. for its BPL project, will sign up its first customers this month, making it the first city in the country to provide broadband services over power lines, John Huwa, asst. dir.-utilities, told us. The franchise for offering the service has been awarded to N.Y.-based Prospect St. Broadband, he said. The city still is building out its network in certain areas, and once the work is completed in mid-2004, it expects to provide service to all 15,000 electric customers, he said. Technology and equipment are being provided by Main.net. Manassas has priced its basic residential BPL service at $26.95 a month, which is “more competitive than cable and DSL and actually comes even close to some of the dial-up services,” Huwa said. The city, which had a Municipal LEC (MLEC) license, didn’t have to seek additional regulatory approvals, he said.

Cinergy, which is entering the BPL business in a joint venture with Current Technologies, had announced a deployment schedule of 4th quarter in Ohio and next year in Ind. and Ky. That announcement was a bit “ambiguous,” said Alex Pardo, mgr. of Cinergy’s PLC project. What the company had meant was that work to start commercial deployment would start in Ohio in the 4th quarter, he said: “We did not expect to have paying customers till early 2004.” He said Cinergy would start commercial deployment in Ohio in the first quarter next year. “We don’t have any plans to be anywhere other than Ohio in 2004. We are just beginning planning moving into the other states, but our specific deployment plan at this stage is focused on Ohio.” Under current plans, Cinergy will pass 30,000-40,000 homes in Ohio in the first year and 250,000 in 3 years, Pardo said.

At a United Power Line Council (UPLC) conference in Sept., Cinergy Exec. Vp William Grealis “actually said we are going to start in October, which is actually a mis-speak on his part,” Current Technologies Pres. Jay Birnbaum said. The companies had just closed on their joint venture deal, he said, and thought it was a good opportunity to make the deployment announcement. Saying there were no technical or regulatory problems holding up deployment, Birnbaum said the companies were involved in getting back-office and other work completed and would start signing up customers in Jan. The plan was to start in Ohio, then move to the other states, he said, but he declined to provide rollout schedules for Ind. and Ky. The companies had decided on pricing, he said, declining to provide details beyond saying they would be competitive with cable and DSL. However, he said, customers would be offered 2-3 different service tiers, with higher symmetrical speeds of 1.5 Mbps to 2 Mbps. There was no need for PUC approval in Ohio for a data-only service, he said.

IdaComm, which supports the BPL services of Ida. Power, is delaying its previously announced Jan. rollout schedule. CEO Chris Britton said the technical trials would take another 2-3 months to complete, after which a market trial, which was larger in scope, was planned: “So we will make a decision on going commercial probably in the summer of 2004.”

The UPLC hasn’t heard anything official from the utilities about why the deployments were being delayed, said Brett Kilbourne, dir.-regulatory services, declining to speculate on the possible reasons. However, Power Line Communications Assn. (PLCA) Pres. Alan Shark said that only Main.net of the 4 leading technology providers could provide the signal right into the home now. “The others are kind of still in different stages of market and technical testing and so they are further behind and it [deployment announcement] is almost unrealistic because at that point you and I are going by brochures. And I get leery… because I have learned that brochure promotion is very different from what finally comes.”

Shark agreed that deployment delays would have an impact on Wall. St. Kilbourne disagreed, saying he didn’t think “that there were expectations from Wall Street that we were going to roll out fast. It [BPL] is just a small piece of the pie for utility companies and it’s not going to make a difference.” One of the frustrating things is the lack of capital investment in BPL, Shark said: “You have 2 basically depressed industries, which doesn’t line up well for what’s needed.” He said people were wary of investing in both the telecom and utility industries. “You put the 2 together and it makes it more difficult to make the case.” People always point to falling DSL prices, he said, but “I don’t think that DSL is really that much of a competitor.” DSL actually was “vulnerable” in that it would require a subscriber to pay for a land line in addition to paying for DSL service, he said. With BPL, customers could access the service through their electrical outlets. As for cable modem, he said, cable operators were forcing customers to take digital services through their pricing for bundled services. “That’s why BPL as an alternative kicks into the lower tier” for the user who doesn’t want other bundled services, he said.

While the FCC commissioners were largely enthusiastic about BPL, there was no noticeable interest on Capitol Hill, Shark said: “The only magic word for us will be rural deployment. But we are not making any big promises on that.” The only advantage for BPL in rural areas is that it could be deployed more cheaply than other wire-based systems, he said, but it’s something that would have to be subsidized: “If anybody were to be subsidized, our technology would be a cost-effective way to go.”