The Internet electric – Will a new set of FCC rules for broadband over power lines bring the Internet to millions more homes?

On Friday, proponents of broadband Internet service over power lines hailed a recent decision by the U.S. Federal Communications Commission that they hope will lead to a boom in the still-emerging and unproven technology.

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“This is one of the defining moments for the widespread adoption of broadband by Americans,” said William Berkman, chairman of broadband over power line (BPL) service operator Current Communications Group. “[The decision] is as significant as the [FCC’s] decision a decade ago to foster competition in the mobile telephone and video programming businesses, through PCs and direct broadcast satellite licensing.”

Using a special modem, BPL users can plug their computers directly into electrical outlets and receive Internet service. The technology could bring high-speed broadband Internet to millions more customers, and some industry insiders see a market worth a potential $2.5 billion over the next five years.

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While the Thursday announcement of new FCC rules seems to have appeased some of BPL’s critics, not all skeptics and opponents are convinced.

According to an FCC press release, the newly approved rules were crafted to encourage the development of BPL systems while preventing the radio interference opponents had claimed could be a dangerous side effect.

The new FCC rules prohibit BPL operators from using frequency bands that could interfere with aircraft communications, coast guard stations, and radio astronomy.

Sam Spencer, editor of BPL Today, a trade magazine in Washington, D.C., said the new BPL technology could play an important part in realizing the long-sought “Triple Play,” or the combination of video, telecommunications, and Internet that both DSL and cable companies are racing to provide.

But Mr. Spencer also said that BPL providers’ success hinges on utility companies allowing them access to the power lines. That may not be so easy. Utilities are reluctant to enter the communications market after losing money in the fiber-optics industry four years ago.

The technology behind BPL has spawned critics. The American Radio Relay League in Newington, Connecticut, has been one of BPL’s biggest opponents during the last two years, citing concerns that piping data into power lines would interfere with amateur “ham” radio operators, as well as emergency services and federal government radio systems.

In a July 2003 story on its web site, the league referred to BPL as “a Pandora’s Box of unprecedented proportions.”

But the league sees the FCC ruling as “hopeful,” said Allen Pitts, its media and public relations manager. “This is a long way from approximately a year and a half ago when we basically heard, ‘Interference? What interference?’” he said. “Yesterday interference was the central issue, and the FCC admits there definitely needs to be steps to prevent interference.”

The league and BPL provider Current Communications disagree about whether the technology has ever caused interference problems in test locations and those locations already launched in Ohio.

Still, Mr. Pitts thinks that fiber-optic technology will prevail over BPL because it doesn’t “pollute the radio spectrum.”

According to the FCC, the chief reasons behind paving the way for BPL were to increase the availability of broadband and to step up competition among high-speed Internet providers.

BPL is seen as an upcoming competitor to cable modem and DSL service, and FCC Chairman Michael Powell called the technology a “third pipeline.”

Bill Berkman, chairman of Current Communications in Rochester, New York, agrees.

“This market is growing so much,” he said. “In reality there is actually plenty of room for a third provider. There are five cell phone providers, three television providers, and really only two broadband providers – cable and DSL. And more competition usually means the consumers do better.”

Current Communications’ strategy is not to take on DSL and cable, but to win market share from people who still depend on dial-up or live too far away from places with DSL or cable access, said Mr. Berkman.

Current Communications has partnered with Cinergy to provide BPL in parts of Indiana, Ohio, and Kentucky, and expects to have roughly 50,000 homes set up by the end of the year, said Mr. Berkman.

Founded in 2000, Current Communications bills itself as the leader in BPL. Current Communications competes with AmerenIP in St. Louis, and Main.net-Power Line Communications in Reston, Virginia.

The new FCC rules also have sparked action among established broadband providers.

SBC Communications, the San Antonio telecom giant, announced on Thursday that it will “dramatically accelerate” its plans to build a new fiber-optics network, providing 19 million households high-speed data, video, and voice services in two to three years instead of five.

“The communications market place is extremely competitive, and the entry of the power companies will only ratchet up the competition,” said SBC spokesman Selim Bingol. “We are acutely aware of the need to provide the best service and value possible. And we like our position very much. We offer the most compelling bundles of services in the market.”