About 70 computer users in Princeton, Illinois, connect to the Internet at high speeds in a very simple way: They plug into an electrical outlet in their home. Their broadband service comes from power lines hanging outside their window. And it is far superior to their previous oh-so-slow dial-up connection.
Their gain comes from their city's loss. In 2003, Princeton's largest employer left town and the next largest employer was frustrated by technical difficulties: It couldn't operate as proficiently as branches in its other locations because data and communication systems in Princeton were low-speed and inefficient. City leaders feared a loss of 800 jobs--in a city of 8,000 people--if the second company departed. "It got the attention of the city council," says Jason Bird, superintendent of electric and telecommunications.
Princeton decided to roll out fiber optics so that large businesses could get fast T-1 lines. But the city also wanted to help small businesses and residents who couldn't afford a high-cost T-1 connection. Broadband over power lines, or BPL, looked like a promising way to go. The city owns the electric utility, so by converting its system to accept BPL, it would also gain additional capabilities that come with the undertaking. The utility would get a "smarter" electric grid that would allow the utility to add outage notification, automatic meter reading and better management of electric demand to its services.
Princeton is one of only a handful of small, non-urban towns that have taken the BPL leap. But the technology has piqued the interest of many other localities that have been bypassed by major local cable and DSL companies. BPL can be delivered to any home or business without new cable or fiber infrastructure. Since the technology uses the existing electric distribution grid and in-home wiring, it makes high- speed Internet access easily available to rural residents.
There is another important advantage: In areas where there is only one cable provider and one DSL provider, BPL could boost competition and lower the cost of Internet service for residents. "For any city or jurisdiction looking to develop this whole concept of the 'third pipe,' it fits in nicely," says Alan Shark, executive director of Public Technology Inc. "It offers a third competitive piece." Shark also serves as executive director for the Broadband Over Power Lines Industry Association.
But the technology is not without its technical, economic and regulatory problems. Emergency responders have expressed concern about interference with radio signals, and ham radio operators--150,000 of them--have been vocal opponents. Aware of the sensitivity of the issue, Princeton brought sheriffs, police officers and other emergency responders into the process early and promised to do everything it could to iron out problems. "We believe we can co-exist," Bird says.
There are also questions about long-term sustainability--several pilot programs elsewhere have been terminated--and cost effectiveness. Other telecommunications providers can deploy their technologies in municipalities faster. In addition, some investors are skeptical of electric companies moving away from their core competence, according to a report of a task force of the National Association of Regulatory Utility Commissioners.
But Princeton has reaped benefits from its choice so far. By bringing in BPL, Princeton went from no "pipes" or connections into the home to three. That's because with the implementation of BPL, competitors, who previously had refused to provide service, decided to enter the market. Real competition has arrived in Princeton.
Manassas, Virginia, was the first city to implement BPL citywide. A pilot program in early 2005 made BPL available to nearly 15,000 households and businesses. By last October, the technology was deployed throughout the city. The city has gained a "smart" electric grid in the process and now knows exactly when and where breaks in electric service occur.
Last fall, two Michigan towns--Grand Ledge and St. Johns--began getting BPL and all its side benefits. Funding came from a $520,000 loan the Michigan Broadband Development Authority made to a company to provide the service.
Obviously, some utilities have embraced BPL technology more readily than others, something the National Association of Regulatory Utility Commissioners asked the Electric Power Research Institute to study. A February report indicated that even aggressive utilities tend to be less tolerant of risk than other industries. So, one of the main drivers of broadband deployment is the ability to partner with a company that assumes most of the risk, even though it also gets most of the financial reward.
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