What vendors tout as the world's first commercial services for high speed Internet access via the power line, a potential competitor to DSL (Digital Subscriber Line) and cable, were launched by local electric utility companies in Germany last month. Another commercial launch is planned in Sweden later this year, as is a trial for similar services in the Netherlands.
Earlier attempts to offer Internet service through the electrical outlet were frustrated by technical problems. Now, however, the companies behind the commercial rollouts have solved problems such as electromagnetic incompatibility, created by transmitters and high-frequency transmission on the power line. Other problems that have been solved include line noise, caused by various devices connected to the power grid, which can disrupt data communication.
Industry giants Siemens AG and Nortel Networks gave up on the concept in March this year and September 1999, respectively, saying power line Internet access didn't have market potential. Switzerland's Ascom Powerline Communications AG and Israel's Main.net PLC picked up where the two left off.
With the current offerings access to the Net through power lines looks especially promising for home users, small businesses and schools.
"The technology Siemens and Nortel developed couldn't deal with the level of noise on power lines. The technical challenge is to deal with the line noise while staying under the regulatory emission level," said Amit Yudan, director of European operations at Main.net.
If the technology proves itself, power line networking could become big, said Lisa Pierce a research fellow with Giga Information Group Inc. in Cambridige, Massachusetts. Power companies could be tomorrow's telecommunications operators, she said.
"If technologically and economically feasible, it is unlikely that providers will only offer high-speed Internet access. Most telecom revenues are derived from voice and data-centric providers who ignored voice have had a hard time of making ends meet," said Pierce.
Communication on the unshielded power lines makes them emit radio-frequency signals that can interfere with radio transmissions and, some observers believe, could pose health risks. Germany is the only European country that has regulated the emission level, according to Yudan.
"The units are safe and pass all home device tests. The electromagnetic radiation level is lower than the level generated by, for example, mobile phones," Yudan said.
Alarming levels of interference were reported at trials in 1998 in England. Some radio amateurs, according to media reports, complained, saying streetlights functioned as enormous antennae. Nortel and its partner United Utilities in 1999 said that those reports were groundless and that power line communication doesn't conflict with any public users of the radio spectrum.
Governments in other European countries are studying power line networking and will come up with regulation soon, according to Yudan. Germany is a front-runner because it has clear rules in place for any type of communication, he said.
The systems made by Main.net use frequencies between 1MHz and 30MHz to send data from the home to the local power substation. From there the data is moved onto a communications cable that the power company will have to install.
A typical substation in Europe services between 150 and 200 homes, an attractive potential customer base for power companies. Besides Internet access, the network can also carry voice calls, turning the power company into a telecommunication operator.
"There are no more technical problems. The radiation is under the allowed level, although radio amateurs aren't happy with us offering the service," said Andreas Preuss, a spokesman for RWE Powerline GmbH, which currently offers 400 customers in Essen, Germany, power line Internet access using Ascom equipment. Despite the radio operators fears, there have been no reports of radio interference, he said.
The transmission of data over a network that anybody has access to could also pose a data security problem, however. Tapping the signal could allow somebody to eavesdrop on communications. Ascom and Main.net say data encryption eliminates that problem.
"Nobody can pick up and read the signal," Yudan assured.
Power line networking is also vulnerable to interference from devices connected to the power infrastructure, such as microwaves and computers.
Main.net and Ascom, the largest suppliers of power line technologies, both claim to have solved that problem as well.
"There is a lot of noise on the power line. Our technology can detect noise and overcome it by using other frequencies. We can also place repeaters on the network that will be activated when needed, for example when the microwave is switched on," said Yudan.
"We did one trial in a skyscraper in Hong Kong and there was all kinds of noise on the power line. We have an algorithm which solves the problem by changing the frequency all the time," said Stephan Howeg, a vice president with Ascom.
In Mannheim, Germany, local power company MVV Energie AG expects to connect 3,000 customers to its Internet service by the end of this year. RWE Powerline expects to connect 2,000 more before the end of the year in its area.
MVV and RWE offer customers Internet connections at speeds up to 2.5M bps (bits per second). All a user has to do is connect a modem to a PC using a LAN or USB (Universal Serial Bus) cable and plug the modem into any electrical outlet in the home. Pricing for the service ranges from DM29.14 (US$13.11) to DM249 per month, depending on bandwidth and in some cases how much data is transmitted. The connection speed isn't guaranteed; all users on a substation share the bandwidth, comparable to cable Internet access.
RWE is targeting home and small-business users as well as nonprofit organizations. The RWE PowerSchool service is tailor-made for schools. Every classroom can have high-speed access, without the need for wiring the school, as power lines already go to every classroom.
Dutch power company Nuon NV will soon start a trial with Main.net. About 250 users will be connected.
"We don't have regulations for power line networking yet in the Netherlands. The level of electromagnetic radiation will be measured by the government during the trials," said Marcel van Hest, project manager for Nuon.
Main.net and Ascom are running trials in seven European countries, as well as in some Asian countries. Power line networking wasn't seen as economically viable in the U.S. for a long time, because the electricity grid is different.
"In the U.S. on average six to 10 homes are connected to one substation, compared to between 150 and 200 in Europe," Yudan said.
The systems offered by Main.net and Ascom have required that the power companies to outfit the substations with hardware and a backbone connection. With only a few potential customers per substation, this isn't economical. Main.net, however, has solved that problem with a special product for the North American power grid, according to Yudan.
"We now have technology that can sit at the mid-voltage splitter on U.S. power networks, serving various substations and thus creating an interesting potential customer base," he said.
Trials of the technology in the U.S. are just beginning, he said. Main.net has formed, with PowerTrust of Reston, Virginia, a joint venture called Powerline Technologies Inc. The location of the trials remains a secret, for now.
"Power line's greatest appeal in the U.S. is to residential subscribers, who often lack access to any sort of broadband," said Giga's Pierce.
Main.net is confident that power line networking will be a strong competitor to other broadband connectivity offerings such as DSL (Digital Subscriber Line) and cable.
"The broadband market will be shared by a range of technologies, power line will be the second largest in number of users," said Yudan.
Analysts with Forrester Research Inc. in Germany aren't as optimistic about the future of power line networking. Power line is "only for a niche market," three Forrester analysts said in a research note published late June. The analysts criticize the pricing structure, which up to now includes a specified number of megabytes of traffic, after which a customer has to pay per additional megabyte. They also criticized theavailability of power line networking, pointing to the upgrading of substations that is required.
Ascom's Howeg agrees somewhat with the Forrester analysts.
"In highly developed countries power line will likely be a niche, provided that the telecommunications industry keeps investing in DSL. If the rollout of DSL stalls, the window of opportunity for power line widens. However, power line will be big in countries where the telecommunications infrastructure is limited. Latin America and China, for example," he said.