CITI Powerline III
by James Sneeringer
Wave Issue 310 4/11/03
March 20, 2003
Powerline communications (PLC), the transmission of high-speed data across the electric power network, has achieved several important milestones since we covered the United PowerLine Council (UPLC) annual meeting last year (see WAVE issue 0237). Some of these milestones are positive, such as the first approval of PLC affiliate transaction rules by a state PUC (public utility commission), and some are potentially negative, such as the announcement of an FCC Office of Engineering and Technology (OET) proceeding to investigate PLC interference. On the whole the industry seems to be progressing quickly, with at least two vendors expecting to begin commercial roll-out within six months. But questions still swirl around the business case for wide-scale industry success.
This conference was notable as the first PLC event we have attended that did not kick off with a general tutorial. The organizers assumed that attendees understood the basic technology, and jumped right into updates from the vendors. Also notable was the inclusion of two operational support systems (OSS) vendors in the presentations. These companies provide suites of back-end services such as marketing, provisioning, customer service, and network management. Here was a clear indication that the industry is beginning to seriously consider the implications of rolling out an entirely new network and set of offerings. Because PLC uses existing wires, capital expenses are expected to be low, with operational costs driving expenditures. Controlling those operation costs with good OSS will be the key to a successful roll-out.
During the closing discussion session, Michael Noll, Director of Technology Research at CITI, asked for benchmarks--when should we check back with PLC, to see how it is doing? The panel members agreed on the following benchmarks for the industry:
18 months -- Widespread commercial deployment has begun, to significant numbers of people.
36 months -- PLC acquires its 1 millionth home.
Some of the most important recent PLC developments have been in the regulatory sphere. For the most part PLC has had a low public profile, and with little to no commercial activity yet most regulatory agencies are content to let it develop freely. But now, the FCC is beginning to look closely, as are some states.
At the federal level, the FCC has stated that PLC is a top priority for the OET in 2003, and they continue to be excited about the potential to provide facilities-based competition for the consumer broadband market. The biggest news from the FCC is the OET announcement that they will begin a proceeding this year to investigate any potential for interference by a PLC deployment. This caused enough of a stir that the two major PLC industry groups, the UPLC and PowerLine Communications Association (PLCA), jointly filed a report with the FCC before the proceeding was formally announced. They ask the OET to proceed with as much speed as possible, since such an open regulatory issue will likely create uncertainty that could hamper industry growth. Utilities, risk-averse by nature, are unlikely to commit to a large deployment until regulations are stable.
At issue is unintentional radiation created by the PLC signal as it travels over powerlines. PLC vendors have been vigilant about FCC Part 15 certification of all their equipment. As an industry, PLC has held that existing Part 15 standards are sufficient to regulate any interference that may be caused. But Alan Scrime, Chief of the Policy and Rules Division at OET, posed this question:
Brett Kilbourne, Director of Regulatory Services for UPLC, had the answer:
In the PLC band of spectrum, there are established broadcast uses, including amateur radio and military applications such as radar, with which unregulated wireline services such as PLC may not interfere. And while Part 15 explicitly sets limits for point sources of radiation such as pieces of equipment, it does not address interference caused by a network of overhead or underground wires.
Speaking with Alan Scrime after the presentation, he made it clear that the FCC does not know of any PLC interference problems, has no wish to obstruct the growth of the industry. Yet, there is no denying that the heterogeneity of the power network makes it possible that some lines will unintentionally radiate the PLC signal, the cumulative effect of which is unknown. The FCC has no established procedure for measuring this radiation, and no limits to protect incumbent spectrum users. For months, said Alan, PLC vendors and organizations have promised to set up testing sites and report measurements. It has not happened, and with the industry progressing toward commercial deployment the FCC felt compelled to act. The proceeding is expected to begin this month, but has not yet been announced.
At the state level, a regulatory issue that continues to create uncertainty reached a milestone when the Pennsylvania Public Utility Commission (PUC) approved the affiliate transaction rules proposed by Pennsylvania Power and Light (PPL) and their subsidiary PPL Telecom. This was the first PLC proposal to be approved by a PUC. Since most electric utilities are regulated monopolies, there are state regulations governing their relationships with affiliate or subsidiary companies. State PUCs must rule on proposed agreements to ensure that the affiliate compensates the utility for the use of its assets--and that the utility passes any savings to consumers through its rates. While the regulations and disposition of the PUC will vary widely from state to state, this initial positive result will likely have a stabilizing effect as a kind of precedent.
Technology and Trials Updates
These sessions began with a revealing survey of the audience as to what type of company each person represented. The majority were from companies already involved in the PLC industry in some way, as a vendor or consultant. Small handfuls were from the press, government agencies, cable and telecom companies, and the smallest number, two, were there representing utilities interested in PLC. Perhaps the academic setting of the conference had something to do with it, but there did not seem to be a strong indicator of utility interest.
The Business Case for PLC
As at the last CITI conference, several industry consultants presented analyses of the business case for PLC. Dr. Rahul Tongia of Carnegie Mellon University, and David Shpigler, President of the Shpigler Group, both presented analyses of the expected prices and penetration rates of PLC, in the larger context of the consumer broadband market. How much churn could PLC providers expect? What amount of market share or local penetration will be considered successful? While the numbers were fluid, and caused some heated exchanges, several important points came out of the discussions:
The importance of strong management of operating expenses was emphasized by George Grabowich, VP of Business Development at Passport Corporation, and Antonia Townsend, VP of Marketing and Corporate Development at Fine Point Technologies. These are two companies that provide OSS systems to networks, and are looking to get involved with the PLC industry. Both offer a suite of services to utilities or their affiliate PLC service providers, to help manage the ongoing costs involved with rolling out and then managing a telecom network.
So what is the business case for PLC? As articulated during the roundtable discussion that closed the conference, both vendors and at least one utility subsidiary (PPL Telecom) believe that there are significant opportunities for PLC:
Most felt that it was very possible for PLC to co-exist with cable and DSL, and still succeed. As Charles Boddy stated:
Oleg Logvinov, President and COO of Enikia, titled his presentation "Lack of Standards Will Kill This Market." He believes that for PLC to succeed on a large scale, a standard for the interoperability of access equipment must be achieved. This will:
Currently the only PLC standard is HomePlug, which was designed for in-home use only. Most the vendors are moving toward compatibility with HomePlug on their LV solution, and Current Technologies actually uses HomePlug for the whole LV side of their technology. In a talk after the conference, Oleg emphasized to us that sometimes specialization is good, and that in his opinion the demarcation point should still be the door of the house. HomePlug can provide for in-home interoperability for home networking, and the industry should develop a separate interoperability standard for access equipment. His model was the DOCSIS or Wi Fi programs, including full interoperability testing and certification.
HomePlug is not sitting still either, and the HomePlug Alliance is currently working on the next standard, to be called HomePlug AV. This is another in-home standard, intended to allow consumers to use the power lines in their house to pass audio/visual content around. Their goal is bandwidth greater than 20Mb/sec, with QoS sufficient to pass video or voice without latency or jitter.