ARRL

Business and Financial Aspects of BPL

Introduction

Although the ARRL doesn't have any interest in the business of BPL, locally, amateur operators are also electric-utility ratepayers, and they may have a local interest in whether their utility becomes involved in a financial failure or success.

To help all with an interest in the financial aspects of BPL, this page provides links to financial studies and analyses of the business model of BPL. These include studies that are both pro and con. Any questions about these studies should be directed to the individuals or organizations that have created them.

Anyone planning a BPL system must recognize the interference problem and must provide in their business plan for the significant costs of mitigating interference as it arises, including termination of operation if that proves to be the only solution. Business plans must also include the not-inconsequential costs of identifying, troubleshooting and correcting power-line noise sources before BPL can be deployed reliably.  If these costs have not been adequately recognized in a business plan, the plan is fundamentally flawed and incomplete.

Quick Links:

Public domain BPL business-case and financial reports
BPL financial reports and analyses that can be purchased

Public-Domain BPL Business Case Studies

BPL Not Ready for Prime Time Smart Grid
October 1, 2009, PowerGrid International - Although this article, written by the CEO of a major BPL/Smart Grid company, is not exactly a financial study, it accurately describes some of the financial and interference aspects of BPL technology. Electric utility companies are looking for sound information relating to the nascent Smart Grid technology.  This issue of PowerGrid focuses on a number of aspects of the developing Smart Grid.  Scroll down to page 43 for the article on BPL.

Europe Smart Grid Opportunity: Analysis and Market Forecasts
London, UK, 8/15/2009 - Although written with European markets in mind, this report by companiesandmarkets.com outlines the current state of Smart Grid deployments and technology (Table of Contents).  Its summary page about BPL outlines the reasons BPL has not been successful in Europe: "Broadband Over Power Line to Lose out to competing Technologies: The European market for Broadband over Power Line (BPL) will decline rapidly during the period 2009-2015. BPL was under test for a while in Europe to deliver online content over utility distribution lines. Practically, all of these test projects yielded undesired results such as interference with the radio waves forcing the utilities to abandon most of these projects. The disastrous results of the BPL pilot projects undertaken have cast a dark shadow over the viability of BPL as competing internet technologies such as DSL, WiFi, and WiMAX . With all these disadvantages, the report predicts a steady demise for BPL technology that provides internet connectivity over power lines."

Progress Report: Broadband in the Sticks
11/8/2006 - Information Week --Broadband over power lines (BPL), offered through electric utilities, offers the ability to piggyback digital data signals over existing power distribution networks (using much of the infrastructure that already exists to supply electrical power to most U.S. households) to send high-speed data. While an intriguing concept, once past the hype, a range of thorny technical and regulatory issues make this an option that will not be widely available for at least several years, if ever.

New Board of Directors, management and financing at Main.Net
2/6/2006, Business Wire excerpt: "MainNet Communications Ltd., the pioneer and international leader in broadband power line communication technology ("BPL or "PLC"), today announced that the Company has experienced a renaissance on all fronts - with a significant equity investment made by the McGehee Group LLC, a new and highly respected Board of Directors, an incoming experienced management team with successful track records in the private and public technology sectors, a clean balance sheet and no debt."

High-Speed Services for Internet Access: Status as of December 31, 2005
July 1, 2006, FCC -- This is the latest report from the FCC about high-speed digital lines in the United States. It shows that as December 31, 2005, there were approximately 5900 BPL lines in the United States out of a total of 50,200,000 broadband lines. After several years of trying, BPL enjoys 0.012% market penetration..

Powering the Broadband Market in 2005 and Beyond
2/1/2005, New Millennium Research Council -- Views on the emergence of Broadband Over Power Line technology. Ambient (Briarcliff Manor, NY) and ComTEK (Manassas, VA) are discussed.

BPL: Under 0.5 Percent of Broadband Market -- And likely to stay there...
07-25-2005, DSL Reports -- Despite the FCC's hope that broadband over powerlines will become a considerable player in the broadband market, new data indicates it sits at under 0.5 percent of the market - and will remain there. CommsDesign offers up this stat sheet - which among other things - notes that 30 of the 80 global BPL trials are taking place in the United States. According to IMI research, "the volume of BPL deployments will have to increase substantially during the next 12-18 months if this technology is going to gain any ground.”

Government Entry Into the Telecommunications Business: Are the Benefits Commensurate With the Costs?
February 3, 2004, The Progress Freedom Foundation, by Thomas M Lenard -- This paper outlines the pitfalls of government entities such as municipal-owned electric utilities entering the telecommunications market. It focuses more on fiber than BPL.

Caslon Analytics Note: Powerline Communication
This report was written by Caslon Analytics, an Australian internet research, analysis and strategies consultancy. It may be one of the more definitive business and scientific treatments of BPL. It starts with a brief BPL tutorial, and then covers the technical and reliability aspects of BPL. It outlines the reasons for ongoing interference issues and describes the key impediments to BPL deployment, including interference, competition from other technologies, consumer anxieties and indifferent electric-utility industry support. Although written from an Australian perspective, its findings and conclusions have widespread application to BPL/PLC worldwide.

Federal Communications Commission Releases Data on High-Speed Internet Access Services 
July 2005 -- The FCC is reporting that there are 32,000,000 high-speed lines in the US. The BPL industry has been promoting BPL for several years now. If it is generously assumed that there are 3,000 paying BPL customers, after several years of trying, BPL has captured less than 0.01% of the high-speed subscriber market. BPL is not specifically mentioned in the report.

Earthlink analyzes the technical and financial components of several broadband technologies
This report analyzes numerous broadband technologies from a technical and financial perspective. It was presented by Earthlink to the FCC on November 16, 2004. Earthlink concluded that "wireless and BPL technologies are not likely to be competitive in cost and performance with cable and DSL over the last mile to the home. ADSL 2+, deployed through UNE-L copper, is the most promising technology for Earthlink." The analysis from page 18 shows that BPL is the most expensive of the broadband technologies evaluated. Other technical deficiencies in one or more of the BPL technologies evaluated are also mentioned.

Broadband Over Power-Line a Mid-Term Grade
Virchow, Krause & Company, LLP -- Interference is among the many issues covered by this financial and technical analysis of BPL. The analysts note: "Technical Performance: D - The interference issue has not been completely addressed. It seems that many of the pilots would rather ignore the question rather than address the question directly. For example, Alliant Energy prematurely ended its BPL trial in Cedar Falls, Iowa. When the trial began, it was one of the most cooperative between amateur radio and the electric industry. However, interference issues sparked the American Radio Relay League (ARRL) to file a formal complaint with the FCC. Shortly afterwards, the trial was ended. We believe that there are ways to address the interference issues, but the BPL industry has not been forthcoming, nor proposed cost-effective solutions."

 

BPL Financial Reports and Analyses That Can Be Purchased

 

Europe Smart Grid Opportunity: Analysis and Market Forecasts
London, UK, 8/15/2009 - Although written with European markets in mind, this report by companiesandmarkets.com outlines the current state of Smart Grid deployments and technology (Table of Contents).  Its summary page about BPL outlines the reasons BPL has not been successful in Europe: "Broadband Over Power Line to Lose out to competing Technologies: The European market for Broadband over Power Line (BPL) will decline rapidly during the period 2009-2015. BPL was under test for a while in Europe to deliver online content over utility distribution lines. Practically, all of these test projects yielded undesired results such as interference with the radio waves forcing the utilities to abandon most of these projects. The disastrous results of the BPL pilot projects undertaken have cast a dark shadow over the viability of BPL as competing internet technologies such as DSL, WiFi, and WiMAX . With all these disadvantages, the report predicts a steady demise for BPL technology that provides internet connectivity over power lines."

Newswire Today - 2007 Global BPL - Utilities Moving Towards Broadbanded Smart Grids
London, UK, 04/28/2008 - Report Buyer has added a new report showing that after trials, Broadband Over Power Lines (BPL) is performing well up to standard, when compared with most other technologies.  The next step is to make the transition from the current trial status to the commercial arena, and this will require the establishment of an appropriate regulatory framework to support the technological developments that are occurring.


Promising Future for Power-Line Broadband
9/11/2006,  InStat.com -- The demand for using traditional electrical lines as a medium for broadband technology in the residential sector is rising worldwide and will continue to grow, according to a study by market research firm In-Stat. Broadband service over power lines (BPL), which allows an Internet connection to be established through a standard electrical outlet, is seen as a potential rival to coaxial (coax) and twisted-pair wiring, the fixed-line technologies most commonly used for cable and telephone service, respectively. Incorporating BPL into a residence or business requires no additional wire installation. It may sound too good to be true, and indeed BPL has had a rocky history because of technical limitations, high development costs and its potential for interference with ham radio and emergency radio signals. But according to In-Stat's research, it's catching on. The number of broadband power-line equipment units sold passed the 2 million mark in 2005, and the research firm expects that the number will increase by 200 percent this year.

2006 Europe - Telecoms, Mobile and Broadband in France, Switzerland
This report covers France and Switzerland, both key telecom markets in the forefront of emerging technologies and deployments. Trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP, VoD and IPTV developments. Subjects include: Market and industry analyses, trends and developments; Facts, figures and statistics; Industry and regulatory issues; Research, Marketing, Benchmarking; Major Players, Revenues, Subscribers, Prepaid; VoIP, IPTV, VoD, digital TV and DTTV. Price: EUR€ 580.00

Broadband Powerline Communications: Ready for Take-Off
Research and Markets -- Power line communications (PLC) has evolved into Broadband Powerline Communications (BPL) that has two primary applications - broadband access (BPL-Access) and home networking (BPL-Indoor). The report, "Broadband Powerline Communications: Ready for Take-Off," provides an exhaustive look at the BPL marketplace. The report details global BPL deployments, examines emerging BPL devices, and discusses standards and regulation. The report profiles major vendors marketing BPL equipment. The report examines developments in BPL technologies and compares these technologies them with other competing solutions. The report provides market sizing and market forecasts for both BPL-Access and BPL-Indoor.

Telecom Trends Two Studies on BPL
These studies claim that access BPL is poised to take off in a big way. This is in stark contrast to recent industry marketing statements that suggest that the industry feels that utility use is more important than access.

Broadband over Power Lines: The Voice of the Residential Customer
Platts Research and Consulting Utilities have many unanswered questions regarding broadband over power lines (BPL), including: Which technology platform is best? How will regulators view BPL investments? What efficiencies can BPL bring to other utility business operations? But perhaps the most important questions revolve around customer acceptance of the technology. Through 1,000 telephone interviews conducted with residential customers in the United States and Canada, this E SOURCE Market Research Multi-Client Study, published in November 2004 will assess the credibility of a utility as a broadband Internet provider in the eyes of residential customers.