Google, Hearst Invest in Power-Line Broadband
Jay Wrolstad, newsfactor.com Fri Jul 8, 2:18 PM ET
Looking to help jumpstart a technology designed to deliver broadband access through standard electrical outlets, Internet search leader Google (Nasdaq: GOOG - news), communications conglomerate Hearst and financial services firm Goldman Sachs have invested in Broadband over Power Line (BPL) service provider Current Communications.
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"These sponsorships will enable us to expand the deployment of our broadband service and develop new applications for customers and utilities," said Scott Bruce, managing director of Current Communications. He declined to offer details about the financial terms of the investments.
Plug and Play
With about two-thirds of the U.S. still without broadband access, and utilities looking to upgrade their distribution networks, speeding the rollout of BPL is good for consumers and businesses, said Bruce.
BPL technology, in essence, turns existing home or office electrical wiring into a broadband network. At the same time, it also lets utility companies offer enhanced distribution services, such as automated meter reading, outage detection and direct load control. A VoIP offering is in the works as well, with testing currently under way at Current Communications, Bruce added.
"We built this business to offer an alternative to cable and DSL services, with the goal of increasing broadband penetration and reach areas not served by those providers," he said.
Slow Progress
One of the advantages of BPL is that it is symmetrical, meaning that the downstream and upstream transmission speeds are the same, unlike most cable or DSL connections.
In addition, power lines already run throughout every room in offices and homes. "All you need is a modem and you can plug into the Internet anywhere and connect multiple devices simultaneously," said Bruce.
BPL has been around for about 10 years, although it has yet to gain much momentum because there are few companies that provide the technology.
Investors Raise BPL Profile
"The technology has some potential, especially in areas where broadband isn't widely available," said Yankee Group analyst Nicole Klein. "The challenge is to pay for the equipment needed on the power poles, and these investors should help Current hook up more homes without having to add subscribers."
Klein said Current has fewer than 10,000 subscribers, with an estimated 50,000 homes wired for BPL. For customers, it costs about US$100 to install the necessary equipment, with monthly rates in the $30 range, she said.
"Adding these investors gives the company, and BPL, greater recognition, which should help spur adoption," said Klein.
For Google and Hearst, BPL represents yet one more distribution channel for their broad array of content and services. "Google is a strong supporter of home networking and wireless technologies, and of businesses that can deliver broadband access to a wider population," Klein said.
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