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IBM (NYSE: IBM) announced a partnership with International Broadband Electric Communications (IBEC) Tuesday that will see the two companies begin deploying Broadband over Power Line (BPL) networks at electric cooperatives throughout the eastern U.S.
The two companies are working to resolve an issue that has plagued U.S. residents in rural areas -- no access to broadband Internet services.
More than 900 electric cooperatives in the U.S. provide 45 percent of the total electric grid and cover 75 percent of the country's land mass. Since BPL technology uses existing power lines, deployment can be quick and inexpensive, according to the two companies.
For a niche access technology such as BPL, Big Blue's backing is particularly noteworthy, said Michael Paxton, an InStat analyst.
"You have a large well-known, well-financed brand name and backer of a technology that needs something like that to push it. That's very significant," he told TechNewsWorld.
This Time's the Charm
BPL was initially rolled out by utility companies in metropolitan areas; however, due to the high level of competition from less expensive competitors, original efforts to deploy BPL was generally not successful, Ray Blair, head of advanced networking at IBM, told TechNewsWorld.
"[Utilities] aren't really geared toward selling these types of consumer products -- they know how to provide electricity to the home but not broadband services. Many of them failed because of that," he explained.
What differentiates this new effort from previous attempts is that IBM and IBEC are not "going head-to-head with the telcos, we're going where they are not -- in rural America, where they have been overlooked basically," Blair pointed out.
"It's not the utilities who are trying to build these networks, it's an ISP, IBEC, owning the network and building it. And the government is providing funding at low interest rates; that helps spread the cost over a period of time. They aren't competing with anyone, so they can charge enough to cover their expenses, and the technology is very reliable now," he continued.
In addition, according to Blair, cooperatives do not have the regulated environment that large utilities have. Often, utility companies will not make a move unless their public utility commission gives its nod of approval. Cooperatives can make a lot of their own decisions because they are owned by their customers.
"What their customers want, they do," Blair said.
Improving Technology
BPL technology has improved drastically over the past several years. When it was first introduced, speeds were around 15 megabits per second. Then, the technology was very noisy and interfered with signals from ham radio operators and emergency medical services, and the accompanying hardware was often big and bulky, according to Blair.
"They were about the size of a refrigerator. Imagine hanging that on a powerline pole. In Europe, that wasn't a problem, but in the United States, we have about six homes per transformer. In Europe, it's 200. So they can park one of these puppies right next to one of those and its not a big deal," he noted.
Although he believes that teaming with IBM will have a significant impact on BPL, Paxton said he has reservations about whether the partnership is the first step toward more widespread deployment of the technology.
"It is such a niche technology and has such stiff competition, even in rural areas, from other access technologies. Widespread deployment -- I tend to have some doubts about that. It might be better described as welcome in certain geographic locations," he said.
"In terms of moving the technology forward, this could be significant," said Vince Vittore, a Yankee Group analyst. "We've always had a wait and see attitude on BPL only because there are some issues with the technology in terms of what it can do and who is actually going to use the technology," he told TechNewsWorld.
Some 15 percent of households in the U.S. do not have an option for wireline broadband service, a figure that continues to decrease as more states push the concept of ubiquitous broadband connectivity, according to Yankee Group estimates.
"It could be significant, but I wouldn't say it was a major breakthrough," he added.
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