Regulators promise ‘light touch’ on BPL

Members of three state public utilities promised a light regulatory touch on broadband over power line service as electric companies begin to experiment with the alternative to traditional high-speed Internet service.

Members of state public utilities commissions need to be educated about BPL issues, Tom Dunleavy, a member of the New York State Public Service Commission, told attendees of the United Power Line Council’s annual conference in Arlington, Va., Tuesday.

“Believe it or not, it is not our objective to impose any unnecessary regulations on anyone,” Dunleavy told the audience, made up mostly of power company employees. “This is a nascent technology. We’re talking about a brand new paradigm on the telecommunications side.”

Instead of heavy-handed regulation, state regulators want to encourage the rollout of BPL as an alternative to other broadband services, said Dunleavy and representatives of the Michigan and New Jersey public service commissions. In June, President George Bush pushed BPL as a way to help achieve his goal of universal broadband availability across the U.S. by 2007, and Robert Nelson, a member of the Michigan Public Service Commission noted that his state’s policy is to encourage broadband rollout as well.

Asked if state regulators should be encouraging BPL rollouts, Mike McGrath, executive director of retail energy services for Edison Electric Institute, said such action isn’t needed. “Probably the only real encouragement is an attractive business opportunity,” he said. “You can pretty expect folks to be interested in profitability, interested in new business.”

At least four U.S. power companies are offering commercial-level BPL service to customers, and others are offering BPL trials to customers. As BPL grows, regulators said they will keep an eye on several issues, including complaints from amateur radio operators that BPL causes radio signal interference.

Despite continuing concerns over interference expressed by the American Radio Relay League (ARRL), the U.S. National Telecommunications and Information Administration (NTIA) is confident those issues can be worked out, said Tom Sullivan, chief of the Spectrum Engineering Branch at the agency. Power lines themselves produce radio interference, Sullivan noted.

“(BPL) is just another source of noise to a radio operator,” Sullivan said. “If a problem comes up, we’ll fix it.”

ARRL’s concerns about BPL are posted online. “Based on what we have observed of the very limited tests of BPL that have taken place to date, the probability of interference from a full-scale implementation of BPL is very high,” ARRL CEO David Sumner said earlier this year about BPL rollouts.

The state regulators also noted other BPL-related issues they will need to work out:

* Whether competing ISPs should have access to the power line systems.

* Whether BPL is regulated in the same way as cable modem or DSL service.

* Whether power companies are using profits from their regulated utility businesses to pay for BPL rollouts.

Strong lines will need to be drawn between the traditional electric businesses and BPL business units, said Michigan’s Nelson. Captive customers of electric utilities shouldn’t have to subsidize a new business plan, he said. “We could have a failing BPL business, and we don’t want to have (electric) rate payers forced to bail out that business,” he said.

Members of power utility groups warned, however, that regulations could hinder utility companies from offering BPL. In rural areas, where some supporters of BPL have championed it as a way to bring broadband to areas not covered by DSL or cable modems, installation costs can be high because of the low numbers of customers, said Tracy Steiner, corporate counsel for the National Rural Electric Cooperative Association (NRECA).

Members of the NRECA average less than seven customers per mile of power line, compared to 44 customers per mile for publicly traded electricity companies, Steiner said. Rural electric cooperatives see BPL as one broadband option, but many cooperatives are also considering other technologies, including satellite broadband and Wi-Fi, she said.

“Sometimes the cost of these regulations can outweigh the benefits,” Steiner added. “In the area of BPL … it’s generally a tough business case to make. Regulation can sometimes tip the scale on whether it’s a go or a no-go.”

New York’s Dunleavy called for consistent regulations for BPL in addition to a light touch. “In any industry … the policy, whatever it may be, needs to be stable,” he said. “The market, the financial community, and investors abhor uncertainty. We’ve got to figure out a way to provide certainty. It’s a very easy thing to say, it’s a very difficult thing to do.”