BPL may be overhyped, study says

A new research report says utility companies will face a tough time trying to compete in the broadband services arena with broadband over power line technology.

Energy Insights, an IDC company, studied both technology and business factors around BPL in its recent report, Broadband over Power Line: Impact for Utility Companies (Doc #EI10050) and its analysts concluded that making the technology a commercial success will be more difficult than market hype would lead some to believe.

“We believe that a lack of utility expertise in running commercially successful consumer telecom businesses and a poor track record of success, combined with utility reluctance to rapidly adopt new technologies, and competition from DSL, cable modems, and other emerging technologies will limit the growth of BPL,” said Rick Nicholson, vice president of research for Energy Insights. “Even in markets currently underserved by DSL and cable modems, the lack of customer density makes achieving scale and favorable economics a challenge.”

Nicholson said that the utility companies will be challenge to generate revenues sufficient to cover deployment expenses.

"Successful BPL deployments by utilities will hinge on carefully choosing the right business model and markets, finding the right partners for these markets, and leveraging BPL capabilities for utility-related purposes," Nicholson said.

Energy Insights compared BPL to competing technologies and looked at regulatory issues and various business models for its deployment.