BPL to Follow Muni-Wi-FiTuesday, November 18, 2008
Broadband over power lines has been a contentious technology ever since the FCC pushed it a number of years ago. There are many issues including the fact that this technology causes interference to low frequency radio communications including amateur radio channels, the California Highway Patrol and other agencies that still use the 30–50-MHz band.
There has been a battle between the FCC and the American Radio Relay League for years, and it appears as though the FCC is enamored with this technology and is willing to push it no matter the consequences to two-way radio systems (sounds like its push for TV white space unlicensed spectrum doesn’t it?).
The city of Manassas in Virginia has been the poster child for BPL, and the system has played havoc with the amateur radio systems in the area that provide emergency communications services during times of disaster. It is interesting that the FCC has remained pro-BPL while Japan has banned it and other countries have tried it and shut it down. But now it appears that it does not matter whether the FCC is pro-BPL or not, the market forces are about to end the Manassas saga of BPL, just as interference and lack of economic models have just about killed muni-Wi-Fi.
Manassas is a city of 35,000+ people with an estimated average income per family of about $70K per year. It is supposedly the first city in the world to deploy BPL, launching a field trial in July 2002 and about a year and a half later entering into a ten-year contract with Prospect Street Broadband, a company that planned to expand the field trial and offer high-speed Internet service to the entire Manassas population. Fast forward to 2008: After several changes in ownership and companies, the Manassas city council has decided to take control of this system that has all of 675 customers (0.02% of the population).
The city intends to spend an additional $110,000 (it already spent $640,000) to take over the system. The return on investment is horrible. In 2004, it had already spent more than $140,000 on BPL and had only 200 customers, so it cancelled the contract that was in place and rebid it, this time awarding it to COMTek, and agreed to spend an additional $500,000 to take the system citywide and provide services to more residents.
Then in 2006, GridPlex said it would take over the system from COMTek and add all kinds of new services including electricity demand response, energy and water conservation, security monitoring, and “many more services.” After messing around with the system for another two years, in July of this year, the city council finally held a hearing on the system and was told by the city utility department manager that the system would be a success and that the $28.95 per month that its customers are paying could be lowered to attract more customers. Of course, all of these services would require an additional investment by the city of $4-5 million.
The good news for the city is that the GridPlex deal fell through so spending the extra money did not become an issue. What did become an issue was what to do about the system that is serving 675 residents. In September, the city council voted to take over the system and fund it in order to protect the existing customers. (It would be cheaper to pay the customers to switch to cable or DSL than to keep this system in operation!)
The most telling quote was from a city council member who voted against the takeover by the city. His comment after the meeting was, “If we really feel compelled to compete, we should do so with modern, fast and reliable technology.” He went on to say, “The current operator of the BPL system cannot make a go of it and wants out. There should be a lesson hiding somewhere in that fact.”
Welcome to the World of Wireless Broadband
BPL is going to collapse under its own weight as muni-Wi-Fi has. Neither of the technologies is right for what they are trying to accomplish, both have severe technology issues, and both are trying to compete with systems already in the ground.
It does not seem as though we learn many lessons from what has come before. Muni-Wi-Fi failed and the problems with BPL were identified and discussed for years, but cities such as Manassas knew better. Several cities and towns in New England are about to follow in the footsteps of Manassas because they have city and town-owned power companies that think they can make it work. Guess what? They won’t.
Those who believe that the incumbent companies (wired and wireless) are greedy and overcharge us for our broadband services will continue to try to find a different way to provide services. We have been through muni-Wi-Fi, now BPL, soon TV white space, and perhaps even the AWS-3 spectrum where the “winner” of the auction has to provide 25% of its bandwidth for free and cover 95% of the U.S. population.
It never ceases to amaze me how much people who want free or almost free broadband are willing to invest in technologies that promise to provide it. Google leads the pack and is going to jump all over the TV white space unlicensed spectrum. Within a few years when lots of people are complaining about the amount of interference they are experiencing, the government will realize what a big mistake it made in providing more unlicensed spectrum.
I wish the city of Manassas the best of luck. I have to wonder how 35,000 residents feel about using their tax dollars to pay for broadband (not very fast broadband) for 675 people. If I lived in that city, I would not be very happy about it. Once again, market forces make it obvious what works and what does not. But I guess the city of Manassas knows better, just as Anaheim, New Orleans, Philadelphia, and other cities knew muni-Wi-Fi would enable them to provide wireless broadband for everyone in their cities.
It will be interesting to see how the market forces whittle down the number of broadband providers. I keep asking how many broadband networks can be supported in these cities. Time will tell, but my guess is that the number is nowhere near the fifteen or eighteen we are about to see descend upon us.
Andrew M. Seybold