Electric Dreams
- Article 2 of 25
- Infoconomist, May 2001
Telcos and cable companies have a new competitor in the broadband Internet access market: the electricity companies.
Page 1 | Page 2 | All 2 Pages
Several electricity firms in Europe have already started testing systems. Iberdrola Redes has a pilot project in Madrid that it says will initially provide 2Mbps Internet access - eventually rising to 10Mbps - using technology from Israel's Nisko Advanced Metering Solutions. Currently in pilot testing, it hopes eventually to roll out the technology to the whole of Spain, as well as Latin America.
RWE of Germany, meanwhile, has been testing narrowband and broadband access since May of 2000 in 200 households in Essen, and has just signed Swiss firm Ascom to supply it with modems and network systems. Ascom and RWE together own RWE Powerline, a company they founded in July of last year to develop and market products that offer Internet access over powerlines, remote-controlled home automation and security systems. RWE Powerline unveiled the first commercial products that it and other electricity companies will be able to offer residential customers and small businesses at the CeBit exhibition in March 2001. The products should be available this summer, assuming the communications regulator grants use of the appropriate frequencies. Its base service, offering 2Mbps transmission speeds, will cost approximately DM49 (EU25) a month and have a maximum download capacity of 250MB, while the DM69 (EU39) service will have a ceiling of 1GB of data. There will be a one-off charge for the modem of between DM199 (EU102) and DM349 (EU178).
Analyst Jeff Moore of Current Analysis says this year will be critical for the technology: “I think a lot more companies would be interested in it if they could be sure it works.” Forrester Research, for example, which expects an ever-increasing demand for broadband, is not convinced of the technology's ability to catch up with either ADSL (asynchronous digital subscriber line) or cable technology.
In truth, however, the technology hurdles may actually be the easiest to overcome. Electricity companies that attempt to become powerline networking providers will face fierce competition from the telephone and cable companies already entrenched in the broadband Internet access market. They are also likely to have to deal with substantial government intervention.
There are certainly a number of issues for governments to discuss. Access to existing powerlines and pylons, for example, is an overriding concern because of the risk of 'wiretapping'. Technologists point out that it would be relatively simply for someone to attach another circuit to powerwires in order to read information directly. Regulations regarding electricity companies as telecommunications services providers also need to be addressed. But if these hurdles can be overcome, electricity companies could yet become the kings of the Internet.
Page 1 | Page 2 | All 2 Pages