Power Play

Once Lynn Huffman lifted his new modem out of the box, it took less than a minute to get online at the computer he keeps in the den. And it took just a few minutes more for Huffman, a retired great-grandpa who recently discovered e-mail, to decide that his new high-speed Internet service was fast, simple to set up and, best of all, cheap. At $26.95 a month, it beats the $42.95 a month he would have had to pay to get broadband from his cable company.

But here's the real shocker: Huffman taps into his new fast pipe through a wall socket any old socket in the house will do. "Now if I could just figure out a way to get rid of all these pop-up ads," he says, settling down to clean the spam out of his In box.

The folks who freed Huffman from his old dial-up connection the one that hogged his phone line while he was online to check sports scores or read the news work for the publicly owned utility of the city of Manassas, Va. They are the people who make sure that the 15,000 homes and businesses in this quiet suburb 30 miles southwest of Washington have electricity, water and sewer service. They were never interested in getting into the broadband business in fact, officials are keen to franchise the operation to an outside investor but that's exactly what they did when they deployed broadband over power lines, or BPL, on the Manassas grid earlier this year and made accessing big bandwidth as easy as plugging in a toaster.

The concept of transmitting data across a power grid isn't new, but until recently the technology could handle only tiny streams enough to monitor a few substations but not enough to support high-speed surfing by multiple users. Now new modems and other advances are prompting dozens of utilities around the country to start testing BPL in earnest. Manassas was first out of the gate with Zplug, its commercial service, but others aren't far behind. Cinergy, a utility based in Cincinnati, Ohio, started enrolling BPL customers in late April; the service should be available to 50,000 Ohio homes by year end. Progress Energy has a commercial trial under way in North Carolina with Internet service provider EarthLink as its partner. Idacomm, a subsidiary of Idacorp (which also owns Idaho Power), hopes to be live in Boise and a few other markets by next spring. "The BPL market," Idacomm president and CEO Chris Britton says, "is going to be hot."

These days most broadband subscribers use either a modem from their cable company or a digital subscriber line (DSL) from their phone company. The first wave of BPL roll-outs doesn't pose much of a threat to the Comcasts and Verizons of the industry, which boast millions of customers and have been selling high-speed access since the late '90s. Some 22 million U.S. households already subscribe to a broadband service, according to Forrester Research analyst Jed Kolko, making it one of the biggest hits of the digital age.

But a huge chunk of the market is still up for grabs: namely, the 40 million-plus homes using dial-up to connect. For some of these users, a 56K modem is plenty. But budding BPL providers are betting that a significant number of consumers really do want broadband service but are simply holding out for a better offer.

BPL could very well win them over. For one thing, it truly is plug-and-play. Plug the modem into an electrical outlet, and you're online. The connection speeds are likely to be slower than the typical cable-modem setup (which clocks in at 1 mbps or faster), but they are comparable to most DSL services, which tend to run at about 500 kbps (10 times as fast as dial-up). And BPL is a symmetrical service, meaning it's just as fast sending out digital photos and other fat files as it is bringing them in; cable and DSL services are typically much slower on the upstream.

BPL is a relative bargain because utilities can make the technology work using their existing infrastructure lines that already reach virtually every home in America. There's no need to make major capital improvements in order to launch, so they can charge less and still turn a profit. Providers say they will price BPL service to be competitive with DSL: about $30 to $40 a month. Cable-modem service is often more expensive (and practically exorbitant if you don't have cable TV).

How does BPL work? The data signals that travel between the computer and outer cyberspace basically hitch a ride across the city's network of power lines. There's no interference because electrical current and digital 1s and 0s run at different frequencies. Manassas uses a fiber-optic network to carry data from its central Internet servers to the medium-voltage lines that run underground or overhead along residential streets. Special hardware clamped to every transformer helps the Internet signal jump to the low-voltage lines that disappear inside individual homes.

For many utilities getting into this business, broadband is just the beginning. Power lines equipped to receive data can also carry voice traffic, and with time and the right compression technology they will be able to carry video too. Electric companies could be the next contender in an extended battle to control not just high-speed surfing but all forms of digital communication and entertainment for the home. Comcast, Cablevision and others already offer multiple services. Idacomm says it plans to offer Internet phone service and video-on-demand to BPL users right off the bat. "That's the triple play," says Vamsi Sistla, broadband analyst for ABI Research. "That's what every network that's sending data is striving for. And [consumers] who can get the apple, the orange and the banana from the same vendor will get a better deal."