OUR BPL Project BUSINESS :
BROADBAND OVER POWERLINE
At first glance Broadband Power Line (BPL) technology seems to have a high potential to provide
ubiquitous broadband access to households and businesses across a country. The fact that electricity is
provided on a nationwide basis seemingly gives BPL an advantage. The commercialisation of BPL could
also be important from a competition perspective providing a second or third wire to the home in
competition with digital subscriber line technology and cable modem technology. It also has the potential
to be a shared technology, given its use in developing smart grids and monitoring consumption of electric
power to share costs. BPL also has unique features such as the possibility of in-home access for broadband
from any power socket in the room without the need for further in-house wiring.
Thus, while BPL has all the features of a promising technology, it has not, as yet, fulfilled earlier
expectations. The extremely slow growth in the number of BPL service providers, and customer base, and
the fact that a number of BPL service providers have been withdrawing from the market concentrating
instead on developing smart-grid technology to monitor energy consumption, seems to indicate that service
providers face problems.
There are a number of technological and, to a lesser extent, regulatory issues which need to be
overcome in order to facilitate the take-off of BPL technology in the market. The electrical grid provides a
harsh environment for data transmission, issues regarding radio frequency interference are both
technological and regulatory, and international standardisation is incomplete. BPL requires investment, in
particular where power grids are old, and BPL also requires investment to send data over long distances.
Furthermore as broadband over DSL migrates to fibre and cable modem speeds increase as a result of new
technology, the competitive environment facing BPL becomes more difficult.
In short, while there may be a potential for BPL to further competition in the broadband market, there
is little evidence to indicate that this will take place soon and that it can be counted on to provide a
competitive alternative in the near term to xDSL (or fibre to the home) and cable modem technologies.
Nevertheless, a technology neutral policy would argue in favour of regulators ensuring that no unnecessary
barriers are in place for the eventual commercial diffusion of this technology as well as ensuring that
interference with other licensed wireless services is minimised
PRODUCT DESIGN
What is BPL?
Broadband over Power Lines (BPL), also known as Power Line Communication/or Carrier (PLC) or
Power Line Telecommunication (PLT), is a technology that allows voice and Internet data to be
transmitted over utility power lines.2
BPL transmits high frequency data signals through the same power
cable network used in carrying electrical power to household/or business subscribers. In order to make use
of BPL, subscribers install a modem that plugs into an ordinary electrical wall outlet and pay a subscription
fee similar to those paid for other types of Internet service.3
BPL is based on PLC technology developed in 1928 by AT&T Bell Telephone Laboratories, and
which has been used for internal and low-speed data communication applications since that time by the
electric power utilities.4
Based on PLC technology, some customer premises equipment (CPE) such as
intercom systems, have used the embedded electrical wire to avoid the cost of special wiring. In Europe
and most of the rest of the world, PLC standards allow for communications over the 220-240 volt power
grid at frequencies of 30 KHz to 150 KHz. In the United States, the standards for the 120 volt power grid
allow the use of frequencies above 150 KHz as well. Power utilities use the frequencies below 490 KHz for
internal applications such as telemetry and monitoring and control of equipment at remote sub-stations. In
the 1990s, development began on broadband over power line (BPL), which has since then been regionally
standardised.5
How does it work?
In order to provide data communication, the initial BPL systems coupled radio frequency (RF) data
signals into the existing electric power lines. The high frequency data signals are transmitted through the
same power lines that carry low frequency electricity to the household or business. This enables both
signals to coexist on the same wire.6
From the specific technological perspective, the basic idea of BPL technology is to modulate a radio
signal with data and send it through power lines in a band of frequencies which are not used for supplying
electricity. The frequencies used and the encoding scheme have a significant influence on the efficiency
and the speed of BPL service. The encoding scheme which is used by most of the BPL providers is
Orthogonal Frequency Division Multiplexing (OFDM). OFDM is a technique used for transmitting large
amounts of digital data over a radio wave. OFDM splits the radio signals into multiple smaller sub-signals
that are then transmitted at different frequencies to the receiver. The transmission of data by OFDM along
several of the carrier frequencies simultaneously increases speed and reliability. Data loss occurs when
electrical distribution is interrupted by electrical devices turned on and off. OFDM uses small packets to
deliver data within the home, losing only small amounts of data rather than the whole signal.7
Another encoding scheme which is used in BPL is Direct Sequence Spread Spectrum (DSSS). DSSS
is one of two types of “spread spectrum techniques”8
wherein a data signal at the transmitter is combined
with a higher data rate bit sequence, or chipping code, that divides the user data according to a spreading
ratio. The chipping code is a redundant bit pattern for each bit that is transmitted, which increases the
signal’s resistance to interference. The redundancy of data helps in recovering the bits that are corrupted
during data transmission.
POSTER
THE SOLUTION : PRODUCT / SERVICE DESCRIPTION
Why BPL?
Inherently BPL would appear to have a very high potential in terms of its market reach, given the ubiquity of electricity service in countries, and the fact that it is a shared medium, potentially allowing for more cost sharing than certain other technologies.
The fact that electrical utilities have virtual nationwide rights of way also makes them attractive partners for companies providing backhaul and backbone communication networks. BPL is also attractive as utility companies own more paths directly into the home than most telecommunication companies, especially in rural and remote areas. For end users in rural areas, who cannot receive DSL or cable modem services, BPL could potentially provide an all-in-one service providing telephone, television and high-speed data access.
It also has a unique feature providing the possibility of in-home access for broadband from any power
socket in the room, as well as the fact that customers will be able to get the same speed both ways (upload
speed is slower than down-load speed for both DSL and cable services). Electrical cabling in the home can
be used to network PCs, printers, telephones and fax machines. Equipment needed to set-up BPL in the
home is as cheap as that of other broadband solutions such as DSL and cable modem.
Potentially BPL can be a third access technology providing a range of extra advantages that the other
technologies do not have. These range from a simple Automatic Meter Reader (AMR) facility that reduces
costs for the utility, to a number of other home automation and home management services that can be of
benefit both to the utility and the end-user. In addition, from the perspective of network security, BPL can
be a third wire at the national level safeguarding communications in case of outages of the telephone or
cable systems.
The extra services that BPL could provide would also be a key element of a business model allowing
BPL service providers to differentiate their quadruple play services from xDSL and cable modem service
providers.
The potential list of customer services can include the following:18
• Voice over Internet telephony.
• Automated monitoring and control of end-use equipment, including demand response and load
shedding.
• Billing data and energy consumption data.
• Real-time building security monitoring/reporting.
• Automated inventory tracking of various goods such as fuel stocks.
• Dynamic price information.
• Video on demand.
• Streaming audio.
• Real-time, interconnected Internet-based games.
• Transmission of data/telephone/fax without multiple fixed lines.
• Triple play services; voice/data/video.
• Quadruple play facilities; triple play services and home automation network
MARKET POTENTIAL & STRATEGIES
============================
BPL tests and market developments: Trials and subscribers
Since 1995 when customer BPL trials, using a prototype system, began in Manchester in the United
Kingdom, there have been over 100 trials and early stage commercial deployments of BPL in OECD
countries. A number of OECD countries, including Australia, Austria, Canada, Finland, Ireland, Italy,
Korea, Japan, the Netherlands, and Switzerland have examined BPL technology or have permitted BPL
equipment trials.30 The results have been mixed and have led to some administrations banning BPL
systems while others have allowed deployment under various conditions. A number of administrations
have suspended BPL trials pending international developments.
In Australia, several trials of BPL technology have been conducted in recent years, however none of
them have progressed to on-going commercial offerings.
In Austria, there have been four BPL trials conducted by utility companies in different cities. Three
trials were put on hold because of problems such as the financial uncertainties of suppliers and complaints of radio users relating to interference. The only commercially successful BPL service is operated by Linz AG, which offers BPL through its Linz AG Strom subsidiary, in the Linz region.31 In 2007, regulators reported 5 500 BPL subscribers in Austria.
In Canada, BPL is still in its early exploratory stages with few trials and fewer commercial
deployments available. By late 2007, city-wide BPL deployments were rare and most commercial BPL
deployment were in the form of low-voltage BPL solutions within hotels.
In Denmark, there are a number of municipal initiatives covering the rollout of broadband services by
power utility companies. In the past two decades fibre optic networks have been laid down to monitor
utility companies’ power grids, and in many cases, more capacity than needed to support their electrical
operations has been installed. Following a severe hurricane in December 1999 which caused significant
damage to low voltage power lines, some Powerline Utilities Companies (PUCs) entered the broadband
market by converting low voltage systems to ground cables.33 In 2007, the regulator reported 96 BPL
subscribers.In Finland, research into BPL technology is continuing, but a central hurdle to its adoption is the risk
of radio frequency interference (RFI) as in other OECD countries. In 2001, the Finnish Communications
Regulatory Authority (FICORA) measured disturbance levels in its BPL test network and concluded that
the technology can only be adopted once the interference and information security problems have been
solved.35 The pioneer in BPL in Finland was Turku Energia, which launched BPL service in early 2003,
but in October 2006 announced that it was discontinuing BPL service completely. Another BPL company,
Vattidata Oy in Pori, has also terminated its service. At the moment, Kuopion Energia is the only company offering a BPL service.36 In 2005 regulators reported 800 BPL subscribers.
In France, EDEV CPL technologies, which was created as a wholly-owned subsidiary of the French
energy company EDF, undertook a BPL network test in Paris with MainNet Communications and its
PLUS system in 2003. In addition, France Telecom is testing potential services and customer acceptance,
but for indoor systems only.
In Germany, to protect the rights of existing frequency users the law setting out the conditions for
power line operations was enacted in July 2001. Utilities and BPL providers must either use low power
spread spectrum systems or apply for national approval if they intend to use high power systems. The two
principal BPL providers in Germany are EnBW and the utility MVV Energie. EnBW provides BPL
solutions to some 350 schools and a number of universities for internal networking. MVV Energie has
operated in Mannheim since 2001, and has 4 500 BPL subscribers.38 According to regulators the total BPL number of subscribers in 2007 was 9 500, that is the largest customer base among the 15 OECD countries which provided data on BPL.
In Iceland, Reykjavik Energy has developed BPL technology as a part of a fibre cable network by
using the energy utility’s distribution station and power grid to connect to metropolitan fibre networks. In 2001, Lina.net, an Internet Service Provider (ISP) of Reykjavik Energy, started to provide BPL services, but in 2004 the company dropped BPL in favour of fibre.39 In 2004, regulators reported 1 020 BPL subscribers.
In Ireland, the government has been actively involved in BPL trials and its development. In 2003, the
government invested in a BPL trial in partnership with the electricity provider ESB. In 2004, powerline
technology was provided to 16 Dubin schools by Ascom under contract to the government.
In Italy, a system for Automatic Meter Reading (AMR) had been developed by Ericsson and Acea,
the second largest electricity distributor, from late 2005 to early 2006, to better manage water and
electricity usage of Rome’s households, rather than as a third wire providing broadband connectivity.41
In Japan, in October 2006, regulations were changed so that only indoor services with a BPL system
using a High Frequency (HF) band of 2 MHz – 30 MHz could be used. The services with a BPL system are
confined to indoor use. However, it is possible to construct a network without LAN cables inside homes as
well as in hotels or companies where it is difficult to introduce new LAN systems.
In Korea, Xeline and the Korea Electric Power Corporation (KEPCO) commercialised a 24Mbps BPL
chip and developed a 200Mbps trial chip in 2006. The KEPCO deployed systems to 6 500 houses using
BPL chips including metropolitan, rural and seashore areas, by means of pilot project in 2007. KEPCO is
planning to diffuse telemetering based on BPL technology nationwide by 2015. Major research institutes
and companies including the Korea Electrotechnology Research Institute, KEPCO, and the Research
Institute of Automation at Seoul National University were involved in developing this technology.
COMMERCIAL FEASIBILITY & VIABILITY
================================
Pennsylvania
One of the first large-scale deployments of BPL was by PPL Telecom, a subsidiary of PPL Corporation, which provides power to some 1.3 million customers in Pennsylvania. The company launched its fourth trial in 2004, and experimented with both direct to outlet and WiFi solutions. In October 2005 its last BPL trial was ended by dint of the short of significant scale.
North Carolina
Progress Energy Corporation (PEC) finished the technological phase of its trial in mid-2003
and completed the second phase of its field trial in the Raleigh area in August 2004. However, by end-2004 PEC had shut down its BPL field trial after pronouncing the test a success.
Boise, Idaho
In 2004, as a part of Idacomm’s ongoing BPL pilot project, the Amperion Connect solution was deployed in Boise by Amperion Inc and Idacomm. By establishing overhead network segments in several Boise locations, IdaComm planned to provide residences and businesses with highspeed wireless Internet access. However, in January 2006 IdaComm announced that it discontinued BPL services due to limited interest in the technology from other utilities.
Westchester County, NY
Ambient Corporation and Consolidated Edison Company commenced a BPL pilot with funding from the New York State Energy Research and Development Authority.
New York BPL trial using Data Ventures Inc technology started at Penn Yan village in late 2003. However, the trial was dropped in mid-2004 after Data Ventures decided BPL was not commercially deployable.
Washington DC and Maryland
Pepco, a utility serving 700 000 Washington DC and Maryland customers, started its six-month BPL trial in Maryland in mid-2002, resulting in discontinuing its investment on BPL. However it still operates a BPL pilot in around 500 homes in Potomac, Maryland.
Cedar Rapids, Iowa Alliant Energy launched its six-month trial at Cedar Rapids, Iowa in March 2004, resulting in shutting down only three months later due to unresolved radio spectrum interference.
Alabama, Indiana, Virginia
IBEC commenced BPL trials in partnership with: first, Central Virginia Electric Cooperative in Nelson County, Virginia; second, South Central Indiana Rural Electric Membership
Cooperative in Martinsville, Indiana; third, Cullman Electric Cooperative in Cullman, Alabama. By late 2005 the market trials in Virginia and Indiana were complete and IBEC had started serving customers in those areas. Recently, IBM was hired by IBEC to manage the installation of BPL systems at electric co-operatives throughout the eastern United States.
Baton Rouge, LA
In January 2007 Entergy Corporation, one of the largest electric utilities in the United States
with over 2.7 million customers, announced a one-year BPL trial with PowerGrid
Communications Inc. The second phase of this trial involving new applications for the
broadband network was planned to start in Little Rock, Arkansas.
Ohio In 2007 IOU FirstEnergy planned to conduct a BPL trial using Ambient equipments in Ohio, and to negotiate the commencement of commercial deployment if the trial proved successful.
Commercial deployments of BPL in the United States
Texas
In 2006, Current Communications Group LLC and TXU Electric Delivery announced a plan to
offer high-speed Internet over electric power lines to more than 2 million customers in Texas. In
May 2008, Oncor Electric Delivery Co., the Dallas-based distribution arm of former TXU Corp.,
announced that it will buy the BPL network of Current Communications Group to use the data
capabilities of the network to monitor the electric grid.
Virginia
In February 2004 Manassas in Virginia was the first in the country to commence a BPL Internet
service citywide. Communication Technologies (ComTek) owns and operates the BPL service
for the Department of Public Works of the city of Manassas. it was announced that 900
residential and business customers had signed up by March 2006, but it was also noted that
Manassas was a particular hotbed of interference debate in the United States.53 It is reported
that Manassas BPL system is going to cease provision of services to consumers and will
remain in operation only for management of the electric system.
Ohio, Kentucky and Indiana
In March 2004, a major deployment of BPL was launched in Ohio, Kentucky, and Indiana by a
joint venture between Current Communications Group, a BPL vendor, and Cinergy Broadband,
a subsidiary of multi-utility Cinergy. In early 2006 Current Communications began offering
commercial VoIP services at its deployment in Cincinnati with Cinergy Corp.
Syracuse, New York
In January 2007 National Grid and New Visions Powerline Communications, Inc announced an
agreement to deploy BPL in three suburbs near Syracuse with a possible expansion across
National Grid’s upstate service territory. New Visions has already deployed BPL in the City of
Solvay and began offering BPL services there in 2007.
Chicago, Illinois
In November 2006 Midwest Competitive Local Exchange Carrier (CLEC), First
Communications announced the deployment of its FirstSpeed In-building BPL product which
was marketed towards multi-tenant and multi-dwelling units such as schools, hospitals,
apartments, condos, offices and airports. First Communications currently operates an Inbuilding BPL deployment at Columbia College in Chicago, Illinois. In March 2007 following several control tests, First Communications was also in the early-stage deployment of its FirstSpeed Access BPL product which offered high-speed broadband to residential homes.
Southeastern States
Ambient Corporation announced in January 2006 that one of the largest investor-owned
utilities, Duke Energy, successfully deployed Ambient’s BPL solutions on its electrical
distribution system. In September 2006 Duke signalled its decision to move to a commercial
phase of BPL deployment when Ambient announced that it had entered into an Expanded
Deployment Agreement with Duke Energy. The agreement will include building connectivity
using Ambient’s latest access BPL gear to around 6,000 homes in Charlotte, North Carolina.
BUSINESS MODEL
++++++++++++++++++++++++++++++++++++++
There are basically three business models that can be used by the BPL industry based on the amount the utility wants to invest and the level of risk they are willing to accept:
• A landlord arrangement, leasing the wires to a third party, probably with a maintenance
arrangement.
• A partnership or contract with an Internet service provider (ISP); the utility builds and owns the
infrastructure, and the ISP handles all aspects of selling to and servicing the customer.
• The utility handles all aspects of the system, including serving as the Internet service provider.
With the landlord model a utility company leases infrastructure to a third party, usually to an existing
communications company which will operate and service the BPL network. This model allows for small
returns for small investment on the part of the utility company.
From the utility’s perspective this model avoids the need to:55
• Invest funds in deploying BPL infrastructure
• Run a BPL operation. A second model is the developer/or wholesale model in which a utility company builds and owns the
infrastructure and offers wholesale access to a communication company, acting as an ISP. Utilities having
core competencies in building and maintaining networks will be suited for this model. Based on this model
a utility company will be involved in network construction.56
This model could be used if:
• There are no regulations preventing opportunities to leverage the utility’s position in the market.
• The utility has the internal skills to construct a BPL network that is economically and able to
compete with other players.
• There are viable candidates to serve the BPL service providers in the market.
• The utility has no interest or capability in running the network and service operations.
The third model is one in which a utility company, as a service provider, provides BPL services to the
customer. In extreme cases, the utilities can offer retail BPL services based on this model. This model
involves the highest risk, but the highest returns.
To use this model a utility needs to ensure that:
• Regulations allow for joint marketing (electricity and broadband).
• Internal skills are available for constructing and maintaining a network.
• The utility has skills supporting marketing, operations, and network management.
