Broadcast over power lines (BPL) - cable's death knell?

So believes John Dizard, writing in The Financial Times of July 26.

He notes that BPL, which uses the electric companies' wires to send data, including voice and video, over existing lines to homes and workplaces, is finally happening.

The largest pilot project currently is in Cincinnati, where Cinergy, the local electric company, has connected 15,000 homes to the internet over its wires.

David Shpigler, whose Shpigler Group is a BPL partner with several utilities, says, "The cost of BPL per home connected in suburban areas is about $100-$150. Then the customer premises equipment is another $100-$200. You don't need a truck to visit the home. Most of the time it's plug-and-play."

According to Shpigler, whose estimates agree with others in the industry, a utility can install two devices an hour on overhead lines, and four an hour for underground lines (which have above-ground equipment pads).

There are usually five or six homes connected to a single transformer, so that's 10-24 homes per hour.

Once an electric utlility decides to roll out the service at a modest pace, it would take perhaps 2-3 years to cover half the service territory, and 5-7 to complete the build-out.

The problem for the cable companies is that their systems are capitalized in the market at more than $3,000 per customer, and the electric companies can provide a competitive service for one-tenth of that market cap.

The giant electric industry is here, and most of the equipment necessary is already installed.

New chipsets and equipment due within the next 12-18 months will provide enough bandwidth to the home to fully substitute for cable.

Up to now, that's been the limiting factor, but the technology is finally here.

What are the prospects for the cable companies' defense against this assault?

"Pretty small," says Jason Bazinet, an analyst with J.P. Morgan Chase.

Article Author: bookofjoe

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