Google, Goldman backing BPL

Current Communications, which is conducting the largest broadband-over-powerline deployment in the U.S., today announced a new round of financing of about $100 million from investment firm Goldman, Sachs & Co., search engine leader Google Inc., media giant The Hearst Corp. and its existing investors, Liberty Associated Partners and EnerTech Capital.

The announcement is the latest indication of growing U.S. interest in BPL, as a third broadband network into the home after cable and DSL.

According to a Federal Communications Commission report released today, there are 21.4 million cable modem lines and 13.8 million DSL lines in the U.S. today. Alternative technologies, combined, represent 2.7 million high-speed access lines, of which 500,000 are satellite or terrestrial wireless connections. BPL and fiber optics represent 700,000 lines, an increase of 16%.

There are still significant challenges to BPL, cautions Varko Sumic, vice president of Gartner Group’s Energy and Utilities Strategies Service.

“Utilities are a Johnny-come-lately in the BB area that cable and DSL have dominated,” he said. “The technology is, to a certain extent, still costly, and there are technical issues related to the attenuation of the signals because of the inductive nature of power lines as well as some issues with interference.”

Gartner’s advice to utility companies is to consider using the technology not only to offer high-speed access but also to accomplish the dual goal of remote monitoring.

“The problem is that there is cost involved and it is not easy--if you look at what is the available market and what is the cost and what are the chances that utilities will be capturing a larger market share than incumbent providers, you have an ‘iffy’ business case,” Sumic said. “But when you add all the opportunities you can get by remote metering, such as providing advanced pricing signals to the customers so they can adjust their consumption according to pricing signals, there is promise, and that is why we see investment getting into that space.”