BPL: Is It Worth It?

By Lauren Barack

Broadband options for consumers expanded last month, when the Federal Communications Commission passed new rules for broadband over power lines (BPL). The FCC's ruling loosened restrictions previously in place and opened the way for BPL to become a serious competitor to cable broadband and Digital Subscriber Lines. For power companies, the news presents both opportunities and challenges in offering BPL to consumers.

Impact of Regulatory Decisions

BPL, which allows for broadband transmissions to travel along electric power lines, counts both advocates and opponents within the U.S. government. For now, the FCC has promised not to over-burden BPL with restrictions, in the hopes of giving it room to grow. However, some health and safety organizations, including the Federal Emergency Management Agency, are voicing concerns about interference caused by data moving along electric grids. But BPL has had at least one friend in a high place: President Bush, who has promoted BPL as part of the way to meet his promise of universal broadband in the U.S. by 2007.

While government groups sort out their differences, one thing is certain: BPL has the potential to transform power companies into Internet service providers as well. As the build-out will likely fall to the IT department, CIOs need to know immediately the following rules issued by the FCC last month that could impact their businesses:

• BPL devices must be able to be shut down or adjust remotely, and must "avoid using any specific frequency," which could cause disruption to radio signals.
  
  
• BPL cannot operate near aeronautical and aircraft receivers, in so called "exclusion zones," which include coast guard and radio astronomy stations, because BPL could issue electrical signals that carry the potential to interfere with these receivers.
  
  
• Power companies will be required to conduct regular consultations with public safety agencies, federal government sensitive stations and aeronautical stations.
  
  
• Companies offering BPL will have to register with a notification database so that any firm or business which finds itself suffering from interference from BPL, or having any other concern with its transmission, can easily and immediately contact that particular BPL provider.
  
  
• BPL systems will have to change equipment authorization from verification to certification. Verification allows anyone who appears to have the correct codes to access the infrastructure. Certification requires an installation in advance of approval codes -- a more secure option.

IT Readiness

A BPL offering for consumers has the potential to dramatically impact existing IT infrastructure. Armed with knowledge of the new regulatory allowances and parameters for BPL, CIOs at power-sector companies can begin to think about preparing their companies to minimize business disruption. Potential obstacles can include the following:

• CIOs may need to upgrade existing, maturing infrastructure. While this may at first seem a hindrance, it could also be viewed as an opportunity to improve aging systems.
  
  
• Companies may also need to invest in technologies that allay transmission problems over their existing power-line infrastructure. For example, broadband signals cannot travel through a transformer, which translates the volts from the grid into current for customers. Installing a coupler can bypass the transformer, and allow data to continue to the client.
  
  
• IT will have to adhere to a set of new infrastructure codes and rules being planned by the Institute of Electrical and Electronics Engineers (IEEE), scheduled for publication in mid-2006.

A new IT infrastructure may have to be built if power-sector companies are required, as regulators have suggested may be an option, to spin-off new business units for their BPL service. Regulators want to make sure that income from a power-sector's main business is not being siphoned to assist its new service. In some cases, power companies may choose to form an alliance with existing broadband providers or with a telecom, rather than build BPL from scratch. If this approach is taken, CIOs will want to ensure that their company's existing infrastructure is capable and ready of incorporating standards from an outside firm, and has IT security measurements in place to protect its own infrastructure.

BPL is currently being tested in 40 service trials in the U.S., in areas including Cincinnati, Ohio and Manassas, Virginia. But as an alternative, BPL has the potential to draw away cable customers, especially in rural areas where cable lines are not available. While some companies, such as AT&T, are choosing not to launch a BPL service at this time, others, such as Cinergy and Progress Energy are moving forward.

Whether or not a power-sector company chooses to take part in this new offering, CIOs should ready themselves to meet the challenges of a BPL future. If they choose to participate in BPL, this offering may make power companies more competitive with other broadband providers such as telephone utilities and cable firms. Through the entire transition, however, strategies must be applied to guarantee business continuity, avoid service disruption, maintain regulatory compliance, and to always make sure information is secure and available.

Lauren Barack's work has been published in Business 2.0 and Wired.