A shock to the system

Telcos push voice, video and high-speed data over copper phone lines. Power lines also use copper. What's more, they run right into the house and up to the wall socket - the ultimate last-mile solution. As reported on page 28, utilities are more eager than ever to have that telecom shine rub off onto their stock prices. So what's wrong with using electrical power lines to deploy the same services?

Well, quite a bit, actually - both technically and economically. Some well-publicized projects that seemed promising a year ago have lost their luster and the backing of some big networking players.

"The feeling [among utilities] is that the technical problems can eventually be solved," said Thomas Goode, assistant general counsel for the United Telecom Council, a lobbying group for utilities involved in telecom. "They all want to get in on the telecommunications revolution. They see themselves as potentially the next AT&T."

Leaping those technical hurdles will take more than just willpower. Three main engineering problems confront anyone who wants to use the electrical distribution system to provide communications services: noise, interference and transformers on the line. Noise is the uncontrolled leakage of outside signals - TV, radio, microwave or wireless - into whatever signal is being carried on the power line, which reduces the amount of bandwidth available for significant data. Interference is essentially the opposite of noise: Signals leak out from the power lines into the world, where they can disrupt other important communications or simply make a mess of TV reception.

One notable field test of power line telecommunications was run in Manchester, England, by Nor.Web, a joint venture formed in March 1998 by Nortel Networks and British power provider United Utilities.

The digital power line, as it was called, transmitted data at about 1 Mb/s by translating it into radio waves of 2 to 10 MHz and sending it over copper from the home to the local electric substation, which was linked by a fiber optic network to an Internet switching point. Home PC users connected their electric meters to a modem-type box that served as an interface to separate the data from the electricity, then connected their computers to the box via Ethernet.

But problems arose soon after the joint venture was announced. Technicians found that the system turned the city's street lights - just the right shape to be perfect conductors - into aerials broadcasting the high-frequency radio waves carrying the data. Besides raising the possibility that users' Internet activities could be monitored without their knowledge, it presented a danger to the communications of other users of those frequencies - including emergency services, Britain's Civil Aviation Authority and the BBC.

Shortly after that discovery, United Utilities pulled out of the Nor.Web joint venture, claiming "the projected volumes and profitability within the competitive broadband access market are considered to be insufficient to justify the investment required."

Nor.Web still is testing the system in Europe, where power cable usually is insulated in a way that shields against noise and interference. American power lines have a different structure, which leaves them more open to disruptions.

Transformers are a third barrier to using power lines to send voice, video or data signals. They boost the voltage on the line to transmit power farther, then step it down when the lines hit the local grid, then step it down again just before it is distributed to the home. But they are built to operate at much lower frequencies than telecom requires and may introduce distortion, echoes and other noise.

Some European utilities have solved this problem in field tests by putting a high-bandwidth communication node at the last transformer, the drop transformer. Here, too, Europeanand North American systems differ. In Europe, each drop transformer serves 200 to 500 households; in North America, it's usually between one and 15 households. Installing that many communication nodes would not make economic sense. The other option - getting communications signals on the power lines to bypass the transformers - would be tricky and raise safety concerns because one side of the bypass would run at very high voltage.

Media Fusion has made a big noise recently with what it says is a new design for sending telecom down power lines, using not the lines but the magnetic field created when electricity moves through a wire. Proprietary software writes voice, radio, video, Internet and satellite data within this magnetic wave, a company prospectus read. Special plug-in electrical outlet connectors with phone jacks will send this data to a device controller in the home and over the power distribution lines to a specially constructed Media Fusion control center at the utility's substation.

Although details of the technology remain closely held, Media Fusion received a 46-part patent for its process from the U.S. government last December. The company has found enough investor funding to plan tests, probably sending high-definition TV signals over the power system. "The bandwidth is tremendous, and no one else can transfer it at this time," said Media Fusion CEO Edwin Blair.

As necessary as field tests are, they may eat up what little time power companies have to get power line telecom businesses running - especially if they hope to be more than niche players supplying in-home alarms and automatic meter reading.

"Time may be running out, at least in North America," Goode said. "The rapid spread of cable Internet and the Bell companies stepping up their DSL efforts have created a need for speed. Utilities believe they have a narrow window if they want to hit it big in the telecom world."