Upstarts Flip Alternative Broadband Switch

By Ron Miller

Cinergy Broadband today said it is teaming with Current Communications to offer broadband over power line (BPL) service in the Cincinnati as the first step in an aggressive rollout.

Initially, the companies will offer the service in southwest Ohio and northern Kentucky. They hope to sign 55,000 customers by year’s end.

The announcement comes a month after the Federal Communications Commission voiced support for BPL technology. Recently, telecom carrier AT&T and ISP giant EarthLink said they are exploring BPL as well.

But industry-watchers aren’t sure BPL will take hold after coming to market this late in the game.

“The digital divide not as big as it was. (Cinergy and Current) are late to market. (They) don’t have a standardized equipment marketplace and (they’re) five or six years behind cable,” Yankee Group’s Matt Davis told internetnews.com. “It will be difficult to get any economy of scale.”

Still, Davis thinks the additional competition could benefit the market.

“It’s good to see this initiative take place in the broadband market, because it manifests a desire by regulators — there’s a lot of support from the FCC on this — from a market standpoint to have more choice,” he said.

The Cinergy-Current service is sold in three tiers: $29.95, $34.95 and $39.95. Cinergy spokesman Steve Brash said the mid-tier offering provides speeds on par with cable and DSL broadband offerings.

“One of the things that is different is that upload and download is symmetrical, so it occurs at the same speed, which is not the case with DSL and cable,” Brash said.

Customers get one Home Plug BPL modem when they sign up for the service, but can deliver broadband to other computers in the house by buying another modem.

The Yankee Group’s Davis questions whether this is a big enough differentiator though, because, at least for now, modems are in the $200 range. Nor does Davis believe that ease-of-use in networking is much of an issue any longer. “Cable and DSL providers have done good job of making installation easier,” Davis says.

Cinergy and Current also plan to target municipal-owned power companies and rural electric cooperatives across the United States in an effort to provide broadband to 24 million homes not currently in areas covered by broadband. Again, Davis says the argument that broadband is not widely available is no longer true.

In fact, according to the Yankee Group, broadband is now available in 80 percent of the country, although only 25 percent are actually using it. BPL providers will run into the same equipment scale problems at the rural level that have discouraged deployment by cable and DSL providers, he predicted.

“The architecture is to bring it to a transformer off of a pole and service a bunch of houses. If can you do that, why wouldn’t DSL or cable be there?” Davis asks.

Cinergy decided to go forward with the wider rollout after completing a year-long test of 100 homes in the Cincinnati Hyde Park neighborhood.

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 Cinergy’s Brash thinks their technology has addressed that.

“The technology from our study over two years is far superior technology and is able to deliver high speeds without picking up interference off the power lines,” Brash said.