The "listless" BPL market gets some stimulus from DirecTV:
DirecTV, Current Electrify Broadband
on 15 August 2007, 10:51
by Cassimir Medford
Satellite television provider DirecTV on Wednesday gave the listless broadband-over-powerline (BPL) market a jolt by striking a wholesale distribution deal with BPL leader Current Group.
At least one analyst believes that Internet search giant Google, one of Current’s biggest investors and a company that continues to seek ways to bypass the phone companies, was behind the deal.
Current's Internet services, which compete with cable modems and DSL, are transmitted via the power grid to the home. Subscribers can access the Internet by plugging a modem into any electrical outlet at home.
The pact allows DirecTV to offer Current’s Internet access and VoIP services to DirecTV’s subscribers in Current’s coverage area. DirecTV will start rolling out the new package by the end of this year.
Current, whose investors include Google, EarthLink, Goldman Sachs, and Hearst, offers BPL-based high-speed Internet access in the Dallas/Fort Worth area and in Cincinnati, Ohio.
That gives Current, which has taken more than $130 million in private investment, access to just over 2 million U.S. homes, so the deal in the early stages will cover only a tiny percentage of the U.S. market.
“The impact of this deal initially will be in the validation of BPL by a market leader such as DirecTV, not so much in terms of coverage,” said Naqi Jaffery, president of Telecom Trends International, a research firm. “But long term BPL could provide Google with alternative access to consumers.”
In recent years Google has argued that major U.S. phone companies have excessive control over their customers access to the Internet.
Google has lobbied the U.S. government for a network neutrality law that would prohibit the phone companies from charging Internet tolls on web traffic generated by firms such as Google.
Google is also considering a bid for radio spectrum in an upcoming U.S. Federal Communications Commission auction so it can create an open network that bypasses the major mobile carriers.
And Google is also involved in the move to municipal Wi-Fi in cities such as San Francisco.
“Google currently does not compete directly against telephone or cable companies, but it might do so in the future as it rolls out video and voice services,” Mr. Jaffery said.
The BPL market has faced a number of hurdles, but perhaps the highest hurdle is its need for the cooperation of the power utilities, a highly regulated, risk-averse group known for extreme caution.
But Brendan Herron, Current’s vice president, corporate development and strategy said the company is currently negotiating with a number of public utilities in the U.S. to roll out services in other areas.
And, he said, the partnership with DirecTV will help speed negotiations in some cities.
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