A few months back, there was a bit of discussion on this list regarding the
possibility of using the AC electric power distribution network as a LAN (or
even a WAN). If you remember, we came to the conclusion that it is quite
possible.

In that regard, the following article appeared today on the business
newswire:

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LONDON -- Engineers claim to have developed a breakthrough technology that
would let homeowners make phone calls and access the Internet at high speeds
via the electric outlets in their walls.

If the technology developed by United Utilities PLC and Northern Telecom Ltd.
proves commercially viable, it could transform power lines around the world
into major conduits on the information superhighway. Because electricity
flows into virtually every home and office the new technology could give
power companies easy entree into the phone and Internet access businesses,
thus posing a serious threat to current providers of those services.

Both United Utilities, a power company, and Northern Telecom, a Canadian
maker of telecom gear, confirmed that their system was "ready for the mass
market," but declined to reveal details until a news conference scheduled for
Wednesday. A Northern Telecom spokesman also declined to elaborate.

While the technology must still be proven on a large scale, the two companies
have tested telephone service over power lines in about 20 U.K. households
over the last 12 months -- with positive results, according to Alistair
Henderson, chief of technology at Energis PLC, the telecom unit of National
Grid Group PLC, which owns and operates the electricity-transmission system
in England and Wales. Energis, one of several power companies that has
secretly worked with United Utilities on the "power line telephony" project,
hopes to use the system to offer data services to its own business customers.


"It's very good news for utilities, indeed," says Mr. Henderson. "Everybody
has an electricity line to their homes, and every business has electric
supply. "At long last, the local monopoly of the incumbent telecom operators
is about to be demolished."

But some questions remain. Although United Utilities' initial tests have been
successful, technical and safety wrinkles have to be ironed out. There's also
likely to be intensifying competition from a host of other wanna-be phone and
Internet service providers, including cable companies and outfits that use
wireless technology to provide high-speed access. And for the new system to
be commercially feasible, a power utility would have to sign up 40% or more
of homes and offices in a particular neighborhood, Mr. Henderson says.

This could prove a difficult task as existing telecommunications players have
proven to be adept at making life hard for new entrants. The Baby Bells in
the U.S., for example, have largely thwarted efforts by AT&T Corp. and MCI
Communications Corp. to enter the local telephone business.

In recent years electric utilities in the U.S. and Europe have been trying to
enter the telecom fray by the more conventional method of stringing
fiber-optic cables along power lines. But so far they've had limited success.
As a result, utilities have waited for exactly this kind of breakthrough to
make a big splash in the telecom wars.

While electric lines have been used before to zap tiny amounts of data
between computers, their capacity has always been limited, making commercial
applications unfeasible. Now United Utilities' telecom arm, Norweb
Communications, has found a way to transmit data at a speed of more than 384
kilobits per second over regular electricity lines -- more than 10 times the
speed of Internet modems used by most households with regular telephone
lines.

The advantage of the latest system -- which uses cellular phone technology to
transmit signals along electric wires -- is that utilities needn't spend vast
amounts of to build new telecom infrastructure, since existing power lines
can simultaneously transmit both electricity, and a phone call, say.
Electricity doesn't interfere with the phone transmission for the same reason
that a radio broadcast doesn't interfere with a simultaneous TV broadcast:
the frequencies are very different. "Utilities won't have to touch the wires
underground," notes Mr. Henderson.

Of course, there will be some cost to utilities that want to commercialize
the new technology and enter the telecom business. Utilities will have to
install a device in each residence or office to separate the electricity and
phone transmissions. From the device, one line will deliver the telephone and
Internet link, while the other will deliver electricity. In the case of the
two companies' test, Northern Telecom is believed to have built the box that
separates the power and data transmissions.

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