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From: ms.smartest.person11/1/2005 6:38:48 PM
   of 130
Broadband Over Power-Line a Mid-Term Grade
by: Carol Arneson, Senior Manager, and Robert Herbst, SeniorManager,

Broadband Power-Line (BPL) has been touted as being the long-awaited technology that will offer a choice beyond cable modem and Digital Subscriber Line (DSL) for high-speed access. Others see it as a technology that, if deployed, will interfere with the High Frequency (HF) amateur brands and emergency communications. As in many controversies or disputes, we believe the truth of BPL is somewhere in between. The question is where does BPL fit?

To help weed through the pros and cons, we gave BPL deployment a mid-term grade report. The categories, and the grades are:
• Politics A
• Self-Promotion B
• Technical Performance D
• Business Model Demonstration D
• Market Identification D
• Pilot to Implementation Transition F

Giving equal weight to each category, BPL is not failing, but it’s close. We give it a 1.67 Grade Point Average (GPA), a solid D. What’s our rationale for this grade?

Politics: A – The BPL industry has done a magnificent job in Washington DC. The FederalCommunication Commission (FCC) had endorsed the BPL’s technology despite the interference concerns. The FCC is so anxious to promote the availability of a high-speed alternative to cable modem and DSL technology, it appears that they have not been completely independent when dealing with BPL issues. We cannot recall another industry obtaining such glowing endorsements during its development stage.

Self-Promotion: B – In the past 8 weeks, some bad BPL press has occurred, and there has been limited response by the BPL vendors and their proponents. The most upsetting news was the cancellation of the Alliant Energy trial in Cedar Falls, Iowa. Despite the recent setbacks, we continue to read positive press releases regarding electric utility deployment plans. Recent announcements include:

• Chelan County Public Utility District (PUD), Washington
• Cinergy
• Con Edison
• Solvay New York
• Briarcliff Manor, New York

In addition, BPL is being promoted by industry groups such as the American Public Power Agency(APPA), and consultants are aggressively promoting trials. According to the United TelecomCouncil (UTC), there are 50 to 75 BPL trials on-going with an estimated paying customer base of 2,000 taking part in these trials.

Technical Performance: D – The interference issue has not been completely addressed. It seems that many of the pilots would rather ignore the question rather than address the question directly. For example, Alliant Energy prematurely ended its BPL trial in Cedar Falls, Iowa. When the trial began, it was one of the most cooperative between amateur radio and the electric industry. However, interference issues sparked the American Radio Relay League (ARRL) to file a formal complaint with the FCC. Shortly afterwards, the trial was ended. We believe that there are ways to address the interference issues, but the BPL industry has not been forthcoming, nor proposed cost-effective solutions.

Another issue is in regard to what data rates might be realized. We read quotes in publications that data rates of 100 Mbps or above will be possible. Depending on BPL technology, it appears that data rates of 500 Kbps to 10 Mbps are more likely. For further information on data rates and interference with BPL technologies, we recommend an article in the April 2004 edition of IEEE Communications Magazine.

Business Model Demonstration: D – Some BPL consultants claim that a utility can make a profit with a $26 per month Internet offering. However, these numbers appear to be based upon broad assumptions of what the hardware costs will be, not where they are today. It appears that maintenance and operations costs are understated. In order for an electric utility to move forward with an implementation, justification must be made on today’s cost which includes the full recovery of all incremental operational and maintenance expenses. Addressing the interference issues may also add costs. Due to profitability concerns, Progress Energy, Pepco, and other utilities may not move forward with BPL.

Market Identification: D – As a new technology, a niche user base or market to initial the product-life-cycle process must be established. We have seen no evidence that the BPL industry has been able to identify an early adopter segment for implementation. Rather, the industry has pursued a shotgun approach with pilots. Identification of early adopters is essential for BPL to move forward.

Some discussions are centered around BPL being the solution for the rural areas. Do the math. The required hardware at each distribution transformer and need for frequent repeaters make rural BPL economics difficult at best.

Pilot to Implementation Transition: F – After 24 months of trials, there is still no full-scale deployment. The furthest along is Manasus, VA, which has 200 customers deployed after approving a full-scale BPL deployment in October 2003. The average BPL deployment to date is less than 100 users. The largest trial planned is for approximately 500 homes in Cincinnati by Cinergy. Finally, a trial with reasonable numbers to address many of the concerns and questions regarding BPL performance.

So, given the above, is BPL dead? No. There is interest and potential niche applications. The promise of ubiquitous access, and ease of deployment is of interest. Be cautious of jumping into a pilot deployment or an implementation. BPL is not proven, and has not been deployed in a large-scale implementation. BPL technologies are not investment grade today. Early adoptees need to be risk-takers and be willing to accept that an investment now might need to be scrapped in 18 months. If your community is in need of a high-speed alternative today, there are proven, lower risk solutions available. If you are looking for a potential next generation solution, keep abreast of BPL and other technologies.

1Power Line Channel Characteristics and Their Effect on Communication System Design: M. Götz, M. Rapp, K. Dostert.

Virchow, Krause & Company, LLP
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