RTP startup taps power lines to bridge digital divide

April 20th, 2004

By Daniel Pearson
Triangle TechJournal

RESEARCH TRIANGLE PARK, NC – Reggie Bruce thinks he’s discovered how to turn copper into gold.

Bruce is founder and chief executive officer of RTP-based Copper Road, a company with technology that provides high speed Internet access over electric utility lines for businesses and residents living in rural areas. Computer users simply plug a modem into a standard electric wall socket, or pick up the signal on their WiFi enabled computer from wireless access points hung on a utility pole, and they are connected to the Internet.

Broadband over power lines, known as BPL, is an idea that’s been kicking around for several years, but was temporarily shelved when the first feeble steps of utilities into the Internet ISP arena were zapped around the year 2000; it was about that that time when investors seemingly scoffed at all ventures having anything to do with telecom or the Internet.

Ted Paczek, vice president of sales and marketing for Copper Road, said utility companies are energized once again about the possibilities of BPL, and industry observers indicate this may be so. Not only does BPL empower utilities with tools that may allow it to become the first industry to successfully bridge the Digital Divide, it will also open a new stream of revenue for the electric industry, which analysts have predicted to stagnate through 2007.

“The Internet is no longer a luxury item,” Paczek said. “It is a must have service for economic development and education in rural areas. Small towns will continue to suffer without access to high speed Internet connectivity, and BPL is the (most convenient and efficient method) of delivering that service.”

BPL Market Snapshot
Raleigh-based Progress Energy electrified the market possibilities again in March by announcing its partnership with Earthlink and WindChannel, a competitor of Copper Road’s that is also based in Raleigh, to promote BPL services to about 500 homes in southern Wake County.

Similar BPL ventures flipped the connectivity switch in recent months. In Virginia, the city of Manassas partnered with Main.net and Prospect Street Broadband. Plans are to begin offering 15,000 northern Virginia residents BPL service by the end of August, according to published reports.

In Cincinnati, Current Communications is working with utility Cinergy Corp. to offer BPL services to 60,000 utility customers by year’s end, with plans to rollout service to more than 250,000 residents in southwestern Ohio, northern Kentucky and Indiana by 2007. Cinergy’s ultimate goal is to offer BPL to 24 million residents in homes that receive power from small municipal utilities or electric cooperatives, a company spokesman said.

In the Washington D.C. area Current Communications is also working with utility PEPCO on a BPL trial run in the Potomac/Rockville area of Maryland, and with Hawaiian Electric in Hawaii, a Current spokesman said.

There have been some regulatory hurdles in BPL’s way, but FCC chairman Michael Powell, who recently came to Raleigh to tour Progress Energy’s BPL facilities, is a professed fan of the technology. Industry observers hint that may be a bad omen for Ham radio operators, who have complained that BPL signals interfere with radio transmissions. In fact, the FCC recently mailed letters to 46 electric utilities regarding harmful interference reports, hinted that a failure to resolve these issues may result in fines. Industry observers expect this issue to play out by the end of the year.

Down the Road
As for Copper Road, the company plans to announce a partnership with a major Virginia-based utility this month, and to begin a campaign to highlight his company’s value, Bruce said.

“Where we differ from our competitors is that we contract with the utilities for access to their power grid and then we are the Internet service provider, whereas our competitors are not ISPs,” Bruce said. “We also provide a service to the utility company by monitoring their power grid in real time, via our wireless access points that are installed on the utility pole, and informing them of potential problems or power outages. So, we are also creating intelligent power grids, which allow Copper Road to do all kinds of things, like manage individual heat pumps.”

Meanwhile, Copper Road continues moving forward with several initiatives. The company is currently conducting trials in the eastern North Carolina town of Everetts, where it has deployed equipment linking city offices to the Internet. Copper Road is also on the hunt for cash. The company is not generating any revenue at this time, and is running off of seed money raised from angel investors. Bruce declined to indicate how much capital Copper Road needs to rise from its current headquarters at the First Flight Venture Center and out into the open market.

“We’re confident that our business model is going to catch on with power companies in the very near future,” Bruce said. “Just the fact that a tiny startup company like ourselves was able to attract a major Virginia utility as a partner speaks volumes about the future possibilities.”