NARUC Report on BPL Urges Light Regulatory Hand For Now

The 6 members of NARUC’s BPL Task Force released their first report on the preliminary findings of more than a year of meetings and discussions on state commissions’ role in advancing BPL technology. The 42- page report, available for downloading from NARUC’s website, outlined the technical, security and regulatory issues posed by this new technology.

N.Y. PSC Comr. Tom Dunleavy said the report concluded that, “less regulation is better at this point in time.” He said there are potential regulatory problems such as cross subsidies, along with proven remedies for dealing with such problems. “But we don’t know what, if anything, to apply to BPL because it is still a nascent technology.” N.D. Comr. Tony Clark said regulatory approaches to BPL may depend on whether it evolves primarily as an electric system management tool or a public communications service. They agreed that BPL providers shouldn’t now be obligated to support the universal service system.

Tex. PUC Comr. Julie Parsley said early BPL trials revealed technical shortcomings that have altered perceptions about what it could do, especially for rural areas. “At first we thought it would allow long-haul broadband transmission so we could bring ‘broadband to every cow.'” But as a practical matter, she said, BPL needs regeneration at least every 3,000 ft. so early trials in rural areas have been to serve the densely populated clusters within sparsely populated counties, such as towns and new subdivisions.

N.J. Comr. Connie Hughes said BPL has national security implications through making electric service more reliable in the face of natural and man-made disasters. She said that BPL still poses radio interference problems, such as in the amateur “ham” radio bands, that remain to be solved. Okla. Comr. Denise Bode said there are about 5,000 BPL subscribers to the trials now underway in 15 states. She said the NARUC BPL task force this year will keep monitoring developments with an eye toward eventually suggesting best practices for dealing with regulatory issues as they emerge.

All the regulators urged utilities with any interest in BPL to involve their state commissions early on in their implementation processes. “Talk to us,” said Dunleavy. “Help us to understand what BPL is for you.” Bode cautioned state regulators to check their statutes to determine whether state law gives them any jurisdiction over utilities’ forays into BPL. She said some state statutes exempting telephone-based broadband from state regulation could be read as also exempting power line based broadband.

The BPL industry said the report was positive overall and would help deployments. One of the areas of concern for utilities was what the state regulators’ “posture” was going to be, said Brett Kilbourne, regulatory dir. of the United Power Line Council, and “their posture is fairly open minded.” He said utilities would be asked to keep their state regulatory commissioners informed about deployments, especially in rural areas.

Meanwhile, speakers at a telecom technology panel Mon. said regulators need to pay attention to the market aspects of new telecom technologies if they're to make effective policy regarding them, said NARUC panel speakers Mon. Former FCC staffer Bill Maher said “regulators need good, objective information on technologies in order to determine when the markets might be ready for them. Technologies are much easier to analyze than markets.” He said effective national laws will give regulators enough discretion to deal with twists and turns as technology advances.

Dealing with the policy effects of new technologies, Maher said, is better done through a series of specific cases rather than “trying to do it through a massive ‘Super Bowl’ proceeding. It can really help to take these issues in bite-sized pieces.” He said regulators won’t ever catch up with new technologies: “You are in a game where you can’t win, draw or quit. All you can do is keep on playing.” Stagg Newman, a former FCC technology dir. now with McKinsey & Co., said “engineers have a long history of overestimating adoption of new technologies in the short term and underestimating it over the long term.” He said new telecom technologies take about 10 years to become widespread, with most of the growth in the later years.

Bob Atkinson of the Columbia U. Tele-Institute, another former FCC staffer, said BPL is “a perfect example of an overhyped technology. It works but its biggest adoption costs are in the nontechnology aspects of service such as branding, marketing, interconnection arrangements, order processing and billing, which nobody’s talking about.” He said the full costs of BPL deployment preclude smaller pioneers from paving the way. “BPL is a game only for big players, but I doubt the big investor-owned utilities will want to get in this” as a competitive communications service because of uncertainty over whether the market really wants a 3rd broadband telecom wire. He said he expects BPL will be a “marginal technology” run in smaller towns and rural areas by municipal utilities.

Jeff Pulver, pres. of Pulver.com., said regulators need to allow VoIP to expand without unnecessary regulation. He said state regulators and IP providers may share interests, such as expanding broadband into high- cost and rural areas. But he cautioned that “the technology won’t stand still while regulators try to get it right.” He also predicted that major carriers all will be adopting VoIP strategies. “Those who don’t embrace VoIP in 2005 might not be around in 2007.”