FCC Approves Electric Utilities? Internet Service

Federal regulators have approved an idea that technology made possible a while ago?giving electric utilities the ability to use their distribution systems to connect consumers to the Internet. Among California utilities, only Pacific Gas & Electric appears interested at present in pursuing such a business opportunity. The Federal Communications Commission (FCC) decided October 14 to allow utilities to break into the Internet-provider business. Federal Energy Regulatory Commission chair Pat Wood and FCC chair Michael Powell agreed in a statement that the ruling ?provides an opportunity to increase the competitive broadband choices that are available to customers.? But consumer groups?and one FCC member?see it as a mixed blessing. ?Critically, how to handle the potential for cross-subsidization between regulated power businesses and unregulated communications businesses remains up in the air,? stated commissioner Michael Copps in dissenting in part with the decision. Troubling issues for him include universal service, access for people with disabilities, power pole attachments, and competition protections. Federal regulators urged utilities to ?appropriately allocate? revenues and costs between their regulated and unregulated businesses. The technology, known as ?broadband over power lines,? allows consumers to hook up through a special modem on a power plug. ?Because power lines are ubiquitous?reaching virtually every community and every home?broadband over power line systems has the potential to become a last-mile solution throughout the United States,? FCC member Kevin Martin said. The ?last mile? is the connection between major trunk lines and individual residences or businesses. California investor-owned utilities have been interested in last-mile service for a decade. During the 1990s, the California Public Utilities Commission approved utility proposals to place fiber optic cables within trenches dug for distribution lines. The promise of using fiber optics has never been realized, and much of the systems remains ?dark?; that is, only a small amount of the potential, if any, is being tapped. While fiber optic lines themselves can handle massive amounts of communications?data are sent by light rather than electronic impulses, and fiber optic lines are less vulnerable to signal interference?the Internet ?bubble? in the last decade overwhelmed consumers with services. The glut led to the demise of some companies, notably WorldCom. In the municipal power community, Palo Alto has been running a trial ?fiber to the home? project. The city suspended it in July 2004 while it investigated continued financing. Meanwhile, investor-owned utilities are interested in the technology, are evaluating it, or say it?s too soon to tell?depending on the utility. If PG&E were to pursue broadband, it would partner with an existing communications company, according to Paul Moreno, PG&E spokesperson. ?We would not be changing our name to PG&E&T,? he said. However, Moreno would not disclose whether the utility is currently in talks with such a company. PG&E started a pilot broadband project with AT&T in Menlo Park, but the telecommunications giant pulled out in early summer when it redirected its business plan away from residential services. ?Southern California Edison has no plans at this time to invest in broadband power line technology,? according to the utility, adding that it ?needs to be proven beyond the small pilot trials that have been implemented to date by some utilities? and that the technology ?needs to overcome a wide range of regulatory hurdles and uncertainties at various levels not faced by competitors.? Edison also questioned the compatibility with current Internet services. San Diego Gas & Electric is still evaluating the FCC decision, according to utility spokesperson Ed Van Herik. The FCC and federal energy regulators also noted that broadband could help improve a utility?s own internal communications, as well as providing feedback on customer electrical use as a means to advance conservation.

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FCC Approves Electric Utilities? Internet Service

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