Empowering the World's Broadband

IBEC signs 13 power co-ops to pass 200,000 with BPL

BPL Today exclusive: IBEC teams with meter giant to design BPL AMR

BPL's 2nd RUS submittal is for $50 millionFurthest farms to get 256k up/down

International Broadband Electric Communications (IBEC) CEO Scott Lee wasn't kidding when he said rural co-ops were lining up to take advantage of the US Department of Agriculture's (USDA) low-cost RUS loans for BPL. The co-op-oriented Huntsville, Ala, firm was the first to apply for a RUS loan for BPL -- $19 million for four co-ops awarded in August (BT, 8/29). At the time Lee predicted 20-plus co-ops would sign on for the next application planned for February or March of this year. What developed was 13 co-ops operating in eight states planning to deploy BPL to pass over 200,000 utility customers -- and the application is for over $50 million.

Lee wouldn't tell us the names of the co-ops but broke them down by states: seven in Indiana, two in Pennsylvania and one each in Michigan, Wisconsin, Texas and Virginia. At least two of those firms cross state lines and serve customers in Ohio and Maryland.

The application covers 27,000 line miles of deployed BPL. It brings IBEC's total customers to 16 co-ops serving over 300,000 members in nine states including Alabama (BT, 8/29). About 92% of the potential BPL customers at the 13 co-ops in this week's RUS application don't have access to broadband today, Lee told us Thursday. Turn-around on the last application was seven months because it was the first for BPL. IBEC worked closely with the USDA on that one, helping the government prepare for future BPL applications. Lee hopes this week's application will be approved in the standard RUS timeframe -- 90 to 120 days, but he's not rushing the RUS folks.

Rural BPL served now

The plan includes offering IBEC's standard fare, three tiers each for residential and commercial. The most popular is the basic residential tier: 256k service for $29.95/month. All tiers have symmetrical upload and download bandwidth.

But can IBEC really promise 256k to the last farm down at the end of the road? "We're offering it to the end with every co-op that we've partnered with," said Lee. The firm's serving BPL at four co-ops now and has yet to find a customer it can't get 256k to, said Lee. The furthest customer in June 2005 was 13 miles, we reported (BT, 6/20/05). That was with first generation BPL gear, noted Lee. He expects to tackle a few spots with IBEC's current partners where the last customer is 15+ miles down a single power line. But the firm's now using gear based on the DS2 200 mbps chipset. IBEC estimates what its distance limit might be but Lee won't share it and IBEC has yet to reach the limit, he reported. The faster tiers for residential are 1 mbps at $49.95/month and 3 mbps at $89.95. Commercial tiers have the same speeds but include extras such as more email accounts and added web hosting space. The tiers are $59.95, $89.95 and $129.95/month respectively.

DS2 chipsets praised

"We'll always be chip agnostic because we want to go after the best technology." That said, the firm believes DS2's BPL chips are the best available today. IBEC's business model centers on deploying BPL in what may be the most challenging part of the grid -- areas that include some of the lowest possible population densities. "To accomplish that we have to have chips that perform." "DS2's chips are the only ones that give us sufficient performance," he added, and DS2 has been "very responsive to our needs." IBEC is about to choose between two DS2-based vendors, Lee reported, though he wouldn't say their names. A quick scan of the BPL database shows the firm has been using Corinex and Kaicom hardware. It doesn't hurt that a variety of vendors are using the DS2 chipsets, Lee noted. IBEC is on the P1901 committee "and we're working very hard to make sure that there's interoperability between all the chip manufacturers and the products out there. "That's very important to us down the line" for customer convenience and it creates "the ability for us to be able to integrate with what's best at that point in time."

Seeking app vendors

IBEC's utility customers are quite interested in utility applications that can be used once the network is in place "and we're pursuing those applications with them," noted Lee. The firm teamed with a legendary meter firm to design and deploy BPL-enabled AMR, noted Lee. For consumer applications such as VOIP and video, "we're in the process now of looking for the right partners."

Consumers demand BPL

The USDA's Rural Development office manages the RUS loans and requires certain customer survey information as part of the application for RUS loans. That's to ensure the loans are for a service that's likely to succeed -- and includes certain consumer demographics. IBEC has its own questions for potential customers and created a survey that covers all the bases. Thus when a co-op approaches IBEC about BPL, the firm sends out a representative to talk to the utility's management and if all goes well, the survey goes out. Questions gauge interest level overall and for particular tiers and offer multiple choices ramping from "absolutely" and "most likely" down to 'absolutely not," reported Lee. Others measure current internet use and the use of related technology. We asked what trends IBEC saw in the completed surveys from members of the 17 power co-ops covered in the two RUS applications. "We've calculated the totals, said Lee. The question asking whether consumers would subscribe to the BPL service has four possible answers. The first is "absolutely" and garnered the lion's share at about 40% of the responses. "Most likely" is the next answer with 23%. Over 73% of those surveyed want the basic 256k service, Lee noted.

Meeting rural demands

IBEC expects 20 to 25 co-ops on its next RUS application. It's underway and to be submitted in November. Many more electric co-ops have contacted the BPL firm and with the availability of cheap RUS loans and the number of firms climbing on board, IBEC appears to be cornering the co-op market. The US has about 900 rural electric co-ops according to the National Rural Electric Cooperatives Assn, serving 39 million customers "while maintaining a unique consumer-focused approach to business" (www.nreca.org/AboutUs/Co-op101.htm). The demand for broadband -- not just affordable service but any service faster than dial-up -- is becoming more urgent every day. Some rural insurance agents now are required to make daily internet filings with their employers that require a broadband connection. Others see opportunities for home-based mail-order businesses -- such as selling through EBay, noted Lee -- and are signing up for commercial accounts at home. But even a 256k symmetrical connection is plenty for VOIP calling, we noted. "It'll handle streaming video," Lee replied. "We get lost in this bandwidth issue," he added. Lee started in the ISP business in 1995 when a 64k connection was considered "broadband."

Reproduced with permission from GHI LLC, publisher of BPL Today (www.bpltoday.com , 1-202-298-8201).

Posted in News on 2006-07-25.