Broadband over powerlines: It may take awhile
Broadband over powerline technology may be coming to your home, but first electric companies need to read your meter in real time.
That's the takeaway from a roundtable that focused Current Communications, a startup that is selling electric utilities on the need for better grid monitoring and management and software and broadband over powerline technology. Current sells the technology and gear (below) utilities can use to offer broadband. Internet access over the power grid allows you to plug in anywhere there is an electric outlet. Download and upload speeds are also symmetrical. Here's a gallery explaining how it works.
While the talk was focused on lessons for young startups, there were a lot of lessons about broadband over powerline technology.
Lesson 1: It's nearly impossible to sell new technologies to an industry that is risk averse and doesn't value new technologies. Current started with one big plan--enable voice and data communications over power lines. The rub: Electric companies weren't interested.
Lesson 2: Given lesson 1 you better be ready to cook up a new game plan. Current's game plan was to focus on software and services to monitor an electric grid in real-time with a system the company dubs SmartGrid. The business plan audible put Goldstein and Ungerer at odds, but it makes sense.
"Power companies are not looking to focus on broadband. That's why we launched the SmartGrid just to convince electric companies that we can help them," says Herron.
"If we didn't shift the business from broadband to SmartGrid. We would not have landed business. Who doesn't want to manage their assets better?" says Goldstein.
The catch: Convincing electric companies to take risks takes time. "You're changing their thought process over many years," says Goldstein.
Lesson 3: But don't forget the initial goal. Goldstein says that once SmartGrid is installed, utilities can offer broadband services. One large Texas power provider, TXU is starting to offer broadband services. TXU decided to invest in Current. In effect, SmartGrid is the Trojan Horse Current will use to roll out broadband services. If Current switched course too early SmartGrid and broadband services may not have hatched.
"Once we solved for the voice problem. Everything else became a subset of that technically. If say I just want to read the meter, we would have missed it," says Goldstein. "The problem is how do you get customers excited about voice over powerlines."
Lesson 4: Broadband over powerline technology needs evangelists. Current has two large customers, Duke Energy and TXU, and it will need those partners to convince other utilities to follow suit.
Lesson 5: Success is a slog. Translation: Don't expect broadband over powerlines any time soon. Current had to face regulatory hurdles and is targeting broadband services market by market, says Herron. There is no number of customers that will create a snowball effect right now although Current will need more than TXU and Duke on board.
Results so far: Current's rollout with TXU means broadband service capabilities will pass several 100,000 homes, says Herron. In Cincinnati, Current passes 54,000 homes. Goldstein argues that as long as customers don't fall in love with both cable and phone companies Current has a market. The experiment bears watching: Current raised $130 million in 2006 and counts Google, Liberty Media, Hearst and a handful of utilities as investors.