Power utility uses broadband over own lines to boost customer service

Broadband-over-powerlines hasn't taken off as a means of delivering fast internet to consumers, but a US electricity provider plans to harness it to improve its internal operations. Todd R Weiss reports
By Todd R Weiss, Auckland | Monday, 20 February, 2006

also Plug-in Internet connection to test on Long Island

By Ken Belson
The New York Times

Published: February 17, 2006, 6:16 AM PST

Customers love to grumble about their phone and cable companies, and residents on Long Island are no different. But for those unhappy with their service from Verizon or Cablevision, an alternative may be on the way.

The Long Island Power Authority announced on Wednesday that it would begin testing technology that provides high-speed Internet connections through people's electrical outlets, a service that could ultimately make a dent in a business now dominated by Cablevision and Verizon.

For several years, utilities across the country, including Con Edison, have been examining the technology, known as broadband over power line, or BPL. Companies like Cinergy in Cincinnati have started selling the service, which requires that customers plug in special adaptors that link to their computers via ethernet cables or wirelessly.

In addition to generating new revenue, the technology is attractive to utilities because the two-way Internet connections let them more effectively monitor their networks and their customers' electricity use. Some companies are also using the technology to provide Internet phone and video services to residential and business customers.

"We want to see if this is a business for LIPA in which we could utilize the revenue to hold down our electronic bills, which are under tremendous pressure," said Richard M. Kessel, the chairman of the power authority.

On Tuesday, the utility, which serves 1.1 million customers in Nassau, Suffolk and parts of Queens, will issue a request for bids from service providers that can install and operate the technology for 105 homes and businesses in Commack and Hauppauge.

Those customers are expected to receive BPL services in the second half of the year. The trial will last two years and the utility, if it decides to introduce the service on a broader scale, will ask for new bids.

LIPA would then compete directly with Cablevision and Verizon for broadband customers. Utilities typically charge $10 to $15 less than cable companies for Internet service because they do not need to install as much equipment in homes.

Despite BPL's potential, utilities have been slow to embrace it because the equipment has been relatively expensive and because of concerns that the equipment, some of which sits atop electric and telephone poles, interferes with ham radio service.

Utilities must also compete with cable and phone companies that have a greater array of products, significant marketing budgets and long experience selling to customers. Verizon and the other Bell companies have also been cutting their prices to as low as $12.95 for Internet connections, helping them attract hundreds of thousands of new customers each quarter.