AT&T Tries Power Play

Just a few months ago, critics in the telco industry joked that VoIP (voice over IP) actually stood for “very over-inflated pipe dream.” But today it’s ready to scale, AT&T senior vice president Cathy Martine said during AT&T’s analyst meeting this week.

While AT&T executives marvel at how quickly VoIP has gone from idea on a drawing board to launching pad and beyond, another lesser known technology, which might seem as unlikely in the near term as VoIP once did, is also moving out of the realm of theory and into the possible: broadband over power lines (BPL).

As AT&T tries to cope with the decline in the traditional wireline long-distance market to cellular players, and extricate itself from a tangle of telecom regulation such as sharing its facilities with competitors, BPL has emerged as a bright new market possibility for the phone giant.

During presentations this week, several AT&T executives highlighted the company’s use of the developing technology. BPL uses radio frequency power to deliver digital information over a utility line with repeaters at power boxes in order to strengthen the signal from the carrier to the home. This means there are some issues that would need to be addressed if BPL were to be deployed on a wide basis, namely signal interference.

But because of the ubiquitous nature of BPL, the Federal Communications Commission has embraced the concept as an alternative to existing broadband technologies and as a way to bring broadband to underserved rural areas.

After all, high-speed Internet access over a digital subscriber line is limited to areas surrounding telephone companies; cable isn’t carried outside urban areas (for the most part) for cable modem connections, and satellite Internet connectivity suffers lag issues.

From the Bedminster, N.J., AT&T’s standpoint, BPL could extend the reach of its broadband applications such as high-speed Internet and VoIP.

Analysts, including Yankee Group’s Boyd Peterson, are intrigued by AT&T’s BPL plans, wondering if AT&T is really developing a go-to-market strategy or if its engaging in a competitive hedge.

“I believe the technology issues can be settled,” Peterson told “But I’d like to get more data on how real the proposal is. What sort of infrastructure has to be in place? What’s the business arrangement with a power company? How would the service be branded?”

Peterson and his colleagues could be waiting a while for those answers. “We’re in trials,” Bob Nersesian, an AT&T spokesman said, declining to elaborate on progress, partners or capital investment.

There have been telecom industry rumblings about the broadband over power lines, but AT&T’s trials are seen as an advancing BPL’s development.

Other service providers are paying attention though. EarthLink, one of the nation’s largest Internet service providers, recently invested in BPL specialist Ambient Corp. .

EarthLink also recently launched a BPL pilot program with Progress Energy in North Carolina. The test involves 500 homes and costs $19.95 for the first three months and $39.95 afterwards.

Even though EarthLink provides cable, DSL and satellite Internet connectivity, officials at the Atlanta ISP said it’s part of the company’s strategy to look at next-generation technologies.

It’s uncertain whether BPL will pay off in the long run, despite the attention of AT&T and EarthLink, and the positive posture of the FCC. But if it does, consumers and businesses could be among the beneficiaries.

“It’s good for the industry generally to have another kind of technology,” Peterson said. “If you are a proponent of choice you want more competitors funding this kind of investment.”

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