OPINION IMPLEMENTING POLICY ON CALIFORNIA BROADBAND OVER POWER LINES

Decision DRAFT DECISION OF COMMISSIONER CHONG
(Mailed 2/10/2006)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking concerning Broadband Over Power Line deployment by electric utilities in California.
Rulemaking 05-09-006

(Filed September 8, 2005)



OPINION IMPLEMENTING POLICY ON

BROADBAND OVER POWER LINES


I. Summary
With this decision we adopt a regulatory framework that fosters competition in the broadband market by giving regulatory certainty to California companies seeking to provide broadband over power lines (BPL). The framework adopted today provides the needed regulatory certainty so that BPL can provide Californians with a new "wired" broadband pipe to the home, which can provide additional competition in the broadband market. Also, BPL has the potential to meet the goals of Section 706 of the Telecommunications Act of 19961 by promoting universal access to broadband services. Through new "smart grid" technologies, BPL also may improve reliability of electrical systems and decrease California consumers' energy expenses.

The regulatory framework adopted today protects electric ratepayers from the business risks associated with BPL, aligns shareholder risks and rewards, and provides benefits to ratepayers. Specifically this decision: (1) allows third-parties or electric utility affiliates (subject to our existing affiliate reporting requirements) to provide BPL services; (2) protects ratepayers and aligns financial risks and rewards; (3) adopts a mechanism for sharing any additional revenues received from BPL providers; (4) provides non-discriminatory access to utility poles and rights of way for BPL and other broadband providers via our existing pole attachment and right-of-way rules; (5) maintains the safety and reliability of the electric distribution system; and (6) adopts a policy of exempting BPL-related transactions, with conditions, from the requirements of Pub. Util. Code § 851 pursuant to our authority under Pub. Util. Code § 853(b).

A. BPL Provides High Speed Digital Communications Over Existing Power Lines
In this decision, we principally discuss what the Federal Communications Commission (FCC) calls "Access BPL" systems, which carry high speed data signals to neighborhoods from a point where there is a connection to a telecommunications network.2 BPL data is transmitted at a much higher frequency than electricity, so the BPL signal can occupy the electric wires without interfering with electric transmission. The power delivery system does, however, potentially interfere with the BPL signal. A variety of BPL technologies have been developed to address these technical challenges.3

B. Benefits of BPL
1. BPL Provides an Opportunity to Increase Broadband Competition

This Commission is taking the proactive step to set up a "BPL-friendly" regulatory framework because of our belief that BPL has the clear potential to bring valuable, additional competition to the California broadband market. At present, the California broadband market is principally dominated by digital subscriber line (DSL) service on conventional phone lines and cable modem services over upgraded cable television lines.4 This Commission believes that more broadband competition will bring lower prices, innovative services, and the potential for new rate plans to consumers.

2. BPL Could Expand Broadband Access to More Californians

BPL has the potential to provide a new broadband pipe to California's communities because existing electrical wires run to each home and business (the so-called critical "last mile"). Thus, electric utilities own valuable rights-of-way to consumers. The nation's power grid may be an untapped resource to provide another path for the delivery of broadband service to citizens.

Based on our review of current technology, technical and economic constraints may initially limit the potential of BPL to serve dispersed populations in rural areas.5 We believe, however, that technology advances where there is a need. New strides in BPL technology soon may bring additional advanced broadband services to underserved areas in California. In general, we believe that increasing the number of broadband delivery platforms and facilitating broadband competition is one of the best ways to extend broadband access to rural areas. While some broadband providers may focus on urban markets, it is conceivable that others may adopt a business plan to serve niche markets which may include rural or other underserved communities. The support given for rapid BPL deployment by rural electric and telephone utilities in the FCC's BPL rulemaking reaffirms this potential.6 By encouraging new facilities-based broadband platforms in our state, the Commission will enable our state to continue as a technology leader.

3. BPL Provides Reliability and Cost Savings to Electricity Consumers

BPL technology also can provide benefits to electrical customers by enabling valuable "smart grid" applications that could improve electrical system reliability and support the implementation of money-saving energy management systems. Potential utility applications include automatic meter reading, voltage control, equipment monitoring, remote connect and disconnect, power outage notification and the ability to collect data on time-of-day power demand.7 We strongly encourage electric utilities to study BPL as a way to provide "smart grid" applications to California consumers.

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new BROADBAND over POWERLINES 200 Mbps BPL Technology