FCC's Broadband Power-line Proposal Opening New Door to High-Speed Data and Communications Services
March 29, 2004
George Wheeler - Washington
Earlier this month the FCC proposed new rules which would allow electric utilities to use the power-grid for commercial broadband services. The FCC’s action follows major technological advances which make high-speed communications over electric lines economically and technically viable. These technological innovations mean businesses and consumers could soon be using the electric-grid as an alternative network for consuming voice, data and video services. Such a system would immediately compete with DSL and cable modem services by providing a third “pipe” into the home and would significantly expand broadband capabilities in rural and underserved areas.
The FCC wants to leverage broadband power line technology to: (1) improve the competitiveness of the broadband service market; (2) increase the availability of broadband services in underserved areas; and (3) encourage the uses of these advanced technologies to improve safety and efficiency of power distribution by adding intelligent networking capabilities to the electric grid. On this last point, at least one company has already filed statements with the FCC confirming that these technologies will permit them to better monitor and control electric system operations which will improve reliability and reduce customer costs.
Once the FCC adopts rules governing this service, electric utilities will be free to establish a broadband service provider subsidiary to construct and operate communications systems, or in the alternative to lease or otherwise provide capacity for third parties to operate broadband power line, communications systems. Utilities will also be allowed to construct and operate broadband power line systems to meet internal communications needs, including practices which will improve the electric grid’s safety and reliability.
The FCC is actively promoting the deployment of broadband power line technologies even while it has pending proceedings to adopt permanent rules. Several manufacturers have indicated in FCC filings that they are deploying demonstration systems in joint ventures with Ameren, Consolidated Edison, Progress Energy and Southern. As a way of protecting against stranded investments, the FCC has also indicated that it will provide a grace period for the transition of any broadband power line system deployed under its interim rules once its permanent rules are adopted.
The most serious opposition to deployment of broadband power line technologies comes from some existing licensees who are concerned that these technologies would interfere with their operations in spectrum below 50 MHz. Such licensees include amateur radio, some aeronautical, maritime and Public Safety radio systems as well as some Federal government systems. The FCC has tentatively found that the interference potential to such systems is quite limited and that there are effective means for power line operators to mitigate interference. The FCC’s proposed rules will also provide standardized measurement procedures to develop a consistent method of defining what constitutes interference.
We expect that the FCC rulemaking proceedings will conclude within six to twelve months. Therefore, clients who might be interested in this technology, but are reluctant to take the lead, have time to study this opportunity before the FCC adopts permanent rules.
Holland & Knight’s telecommunications attorneys would be pleased to help you understand the current and emerging regulatory requirements surrounding this technology, provide regulatory support if you decide to deploy such systems and assistance with filing comments in response to the FCC’s proposed rules.
For more information, e-mail George Wheeler at
george.wheeler@hklaw.com or call toll free, 1-888-688-8500.