Do smart grids need special spectrum?

In my coverage of the smart grid space, I had laid out three potential market-entry options for utilities looking to develop a communications backbone specifically for the smart grid: build their own network with the help of a systems integrator, use a backhaul aggregator or work with an existing network operator to provide the infrastructure. I admit that it hadn’t really occurred to me that some utilities might not be satisfied with any of these options.

Last week, the FCC began looking into a fourth option for utilities: giving them dedicated licensed spectrum, which some said they sorely needed. American Electric Power, a large U.S. utility, petitioned the FCC to allocate wireless spectrum specifically to utilities to use for smart grids. Right now most utilities are focusing on rolling out advanced meter infrastructure (AMI), but the idea is that when they get into more advanced services, they will need more bandwidth.

Since I cover the market from a telecom service provider’s point of view, the question I’ve heard over and over is “Why would a utility fret with the network, when that has been a telco’s expertise for the past 100 years?” Utilities worry that if they rely on telcos’ wireless spectrum, unlicensed and open to all, interference will result. And while occasional dead zones may be tolerable in the wireless world, they aren’t on the grid. This is why Canada designated 30 MHz of spectrum for its smart grid movement, but the U.S. has remained hands-off — at least on this aspect of the movement.

Clearly the telcos and a lot of the equipment and technology providers disagree with this opinion. Alex Brisbourne, president and chief operating officer for machine-to-machine (M2M) provider Kore, has pointed out that smart meters require very little bandwidth and transmit only tiny amounts of data. In fact, most M2M apps still only need a narrowband connection — not even 3G. Even so, carriers, including Verizon, already are looking toward their 3G and 4G networks to support future smart grid implementations. Mark Bartolomeo, vice president of enterprise data marketing for Verizon, said that as a data-only network, Verizon’s 3G EV-DO network is up to the task of managing this mission-critical operation. Verizon is beginning to deploy its 4G long-term evolution network this year as well and plans to utilize it for smart grid technologies.

“Where we see that impacting things like smart grid, and M2M overall, is ubiquitous coverage and throughput,” Bartolomeo said. “Do you need these types of speeds to manage a meter? We look at it as potentially what you would have short-term is a bunch of devices with very low throughout demands but a very high concentration of them. You could have a couple million out there, and they are everywhere within a house, so you have to have that throughput to manage that environment.”

When it comes down to it, existing cellular networks better be up to the task, considering that the carriers are counting on connecting thousands of new, emerging devices, outside of just smart grid technologies, to them as well. Again, admitting my viewpoint is skewed, it seems like utilities are better off sticking to their core expertise — energy — and relying on a telco, in some form or fashion, for their expertise: the network. From the utility perspective, it is unrealistic to think that building a widespread network solely for the smart grid and M2M data will be any more reliable than a cellular network, as well as worth the enormous investment it will require. Revenue from M2M is just gravy for carriers that built their networks for voice. Utilities building a network for M2M can’t count on making any significant money from it because the operating costs are simply too high. And from the telecom perspective, if the FCC takes action on the spectrum issue, it could cut off one of the wireless operators’ biggest opportunities right at the source.

E-mail me at sarah.reedy@penton.com.