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By
Rauer L. Meyer
Thelen Reid Brown Raysman & Steiner LLP
The
Federal Communications Commission has announced a Notice
of Inquiry (NOI) on what it calls "Broadband over Power
Line": The use of existing electrical power lines as
a transmission medium to provide high-speed communications
capabilities, including Internet and broadband services,
to both urban and rural areas by coupling radio-frequency
energy onto the power line.
BPL
is a new type of "carrier current" system that
operates using spectrum on an unlicensed basis under Part
15 of the FCC's rules. While electrical power lines have
been used by utilities on a limited basis for their internal
communications needs, recent pilot programs have highlighted
a potential for more widespread commercial applications.
The
FCC is a big supporter of BPL because it brings new competition
to the "last mile" delivery of broadband. The
FCC's experience with implementation of the Telecommunications
Act of 1996 led it to understand that true competition in
the telecommunications marketplace must be facilities-based.
Past and current efforts to infuse the local telecommunications
marketplace with competition by encouraging the development
of carriers whose networks are materially dependent on the
dominant incumbent networks with whom they compete are having
little success in lowering prices, stimulating innovation
and diversifying services available to the public.
BPL
is viewed by the FCC as the elusive additional wire into
homes, and the competitive potential BPL represents spurred
the FCC into issuing the NOI on April 23, 2003.
BPL,
also known as Power Line Communications, is an opportunity
for electric utilities to leverage their existing infrastructure
to offer new services. The technology has been explored
in fits and starts in the past, but has improved to the
point that it now offers distinct use, convenience and cost
advantages over competing DSL, cable and wireless broadband
approaches.
By
simply plugging a BPL device into an existing electrical
outlet, BPL can provide consumers with access to broadband
and, potentially, voice services from any room in the house
without adding or paying for additional connections. BPL
also offers utilities new cost-saving methods for remotely
monitoring power uses and outages. Because of differences
in network design, the roll-out of BPL is more advanced
in Europe, but current trials in the United States have
been successful so far.
Business
models will vary, ranging from a passive lease by utilities
of the infrastructure to the development of a local telecommunications
operation or an Internet Service Provider (ISP) business
by utilities. There will be numerous possibilities for joint
venturing by utilities with technology and telecommunications
providers.
For
the technology and telecommunications sectors, BPL presents
a new opportunity for partnering with electric utilities
to provide critical technology, business expertise and assets
that the utilities traditionally have lacked.
Whatever
the business model for BPL, it will involve new financing;
federal and state energy regulation, including rate-making
and the right to use regulated assets; and technology, including
development, licensing, manufacturing, service implementation,
outsourcing, and perfection and protection of intellectual
property rights.
The
FCC's NOI proceeding is a fact-finding exploration of the
current state of BPL technology to determine whether changes
to Part 15 of the FCC's rules (concerning unlicensed operations
utilizing certain electromagnetic spectrum) are necessary
to facilitate deployment of the technology. Current Part
15 rules, while permitting BPL, do not provide measurement
procedures to determine the amount of conducted radio-frequency
energy that may be injected into a building's wiring by
a radio-frequency device that receives power from a commercial
power source.
In
its NOI, the FCC identifies two principal BPL systems: 1.)
those that operate inside a house or office ("In-House
BPL") and allow use of existing electrical outlets
to transfer information between computers and other electronic
devices; and 2.) those BPL systems that operate over
utility poles and medium-voltage electrical power lines
("Access BPL") to provide high speed Internet
and other broadband services.
The
NOI posed numerous technical questions and sought information
and commentary from any interested party but most particularly
from electric utilities.
The
traditional regulatory route would be for the FCC to rely
on the record established in the NOI to propose rules governing
BPL in a Notice of Proposed Rulemaking. Following this route,
the FCC would issue a Report and Order, based on the record
developed in the NPRM, in which it would adopt rules to
govern the provision of BPL.
The
NOI is the beginning of a historic process that could lead
to a sea change in the telecommunications choices available
to the public and the business community and the manner
in which telecommunications and Internet-based services
are delivered.
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For more information about the issues covered in this report, please contact Rauer L. Meyer in our Los Angeles office at 213-576-8005 or at rlmeyer@thelen.com or contact your Thelen attorney. For more information about Thelen's Construction Department, click here.
©2003 Thelen Reid Brown Raysman & Steiner LLP
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