Raleigh, North Carolina: Sen. Daniel Clodfelter plans to allow broadband Internet access over power lines as an unregulated business.

Plugging in to a new way to surf
Triangle Business Journal - May 26, 2006by Leo John
RALEIGH - Another player might be coming to the Internet field of battle - electricity companies.

State Sen. Daniel Clodfelter, a Mecklenburg County Democrat, plans to introduce legislation that would allow electric utilities to offer broadband Internet access over power lines as an unregulated business.

Both Raleigh-based Progress Energy and Charlotte-based Duke Energy, which is based in Clodfelter's county, have tested the technology, but they want legislation freeing them of regulatory control.

Clodfelter says he'll introduce a bill in 2007 because rules do not allow him to offer such a proposal during the current "short session" of the General Assembly.

Progress Energy, which serves nearly three million customers in the Carolinas and Florida, in 2004 conducted a broadband test with Earthlink, an Internet service provider, that involved the streaming of Internet content into Wake County homes.

That test showed that the technology works, says company spokeswoman Heidi Deja. Progress conducted a market analysis, tried out equipment and delved into marketing the service.

As to whether the Raleigh utility would offer broadband in the future, Deja would only say, "We are still investigating the value of (the) technology."

Duke Energy, which has a service territory that includes about 110,000 customers in Durham County, this summer plans to expand a test program in southeast Charlotte.

The company is being spurred on by its April merger with Cinergy, which operates the most extensive broadband service among U.S. electricity companies with 50,000 customers in and around Cincinnati.

Greg Wolf, who oversees Duke's broadband strategy, told the Charlotte Business Journal that the utility did not have a set timeline for launching the service in the Carolinas.

"But we are on the path," Wolf said. "Ultimately if we implement it across the entire Duke Energy territories ... it will cost hundreds of millions of dollars, but I am confident we can make a business case for it."

Some industry analysts question whether the utilities are too late in coming to the party. Stealing customers away from cable and telephone companies is going to be difficult, they believe.

Duke spokesman Tom Shiel says the Charlotte test run is designed in part to check "if there is a demand" for such a service.

Ben Turner, director of the Electric Division of the Public Staff of the North Carolina Utilities Commission, says such a service could be especially attractive to customers in rural parts of the state. "In some of the rural areas, dial-up is the only thing that is available," says Turner.

Clodfelter says his legislation would be aimed at assuring that a power company's electricity business, which is regulated in terms of costs and other factors, doesn't end up subsidizing a broadband offering.

That may not go far enough for Turner, who contends that the Internet service would be passing through infrastructure paid for by electricity customers. "We would still have some issues with the use of the distribution facility without some kind of contribution," he says.

From: Triangle Business Journal - May 29, 2006