Adam Smith's Invisible Hand
May 20, 2003
I knew that eventually competition would begin to take hold in broadband. I first wrote about this in a reflection May 12, 1998 -- and must admit I was a bit premature. But now, at last, it is happening. This morning at Vortex 2003 in Laguna Niguel, Larry Bibbio, vice chairman of Verizon, said that they have reduced their monthly DSL fee by $15 and that the reduction was "not promotional". Surely, the cable companies will not stand by and lose market share. Direct TV is aggressively advertising broadband internet access via satellite. Prices will come down and speeds will go up. What we need is even more competition and the electric utilities are about to offer it. In Pennsylvania, PPL Telecom has begun to charge their subscribers for "Broadband over Power Line" service beginning May 1, 2003.
Expect to see announcements from a number of electric utilities around the country now that all five FCC commissioners have strongly endorsed Power Line Communications (or "Boradband over Power Line" as they renamed it, ). Electric utilities are getting their strategies lined up and planning technical trials. The National Rural Electric Cooperative Association could become a big player -- they have 900 member electric cooperatives across the U.S..
From a technology perspective, it looks like at least 100 megabits across the electrical wires will be possible -- maybe 200. Some of the power line vendors have built an interface to WiFi so that the Internet connectivity can jump from medium voltage wires on the poles right into a home or business. It will also present yet one more backhaul alternative to the telcommunications companies. The HomePlug Powerline Alliance already has members offering the hardware to plug a LAN into an electrical socket.
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