Leading Broadband over Power Line Provider Closes its Doors

Broadband over power line (BPL) technology is designed to use existing power lines to provide broadband Internet access to businesses and consumers.  In the early 2000s BPL was promoted by providers as a viable alternative to DSL and cable broadband offerings, especially in rural areas where there was no other means of broadband access.  Although FCC put BPL on the fast track, the amateur radio community was strongly opposed to BPL on the basis that BPL equipment would interfere with the amateur radio wave bands.  The FCC rules have been the subject of petitions and court proceedings, and nine years after the FCC initiated the rulemaking process, the process still continues. 

During that time, much has changed in the world of broadband technology.  While the expense and speed of BPL has largely remained the same, wireless technologies and fiber optic networks have become faster, less expensive and more efficient.  Deployment of BPL was never as widespread as predicted, and many of the initial providers have turned to other products and markets.

Earlier this month, one of the leading BPL operators, International Broadband Electric Communications (IBEC), announced that it was closing its doors as of the end of January 2012. IBEC had a formal complaint filed against it with the FCC alleging harmful interference and FCC rules violations. The violations were alleged to have occurred at IBEC-installed BPL systems in Virginia, Pennsylvania and Indiana.

However, the reason for IBEC’s closure appears to have been a failing business model, rather than the FCC complaint. IBEC states on its website that it was unable to recover from financial losses suffered when service areas were damaged by storms in April 2011.  In a letter to its customers, IBEC also stated that it was unable to obtain sufficient funding to continue from investors or its lenders, and was unable to find a buyer for the company.  Interestingly, IBEC also noted that its requests for federal stimulus funds were “denied without explanation,” and that it had fought hard in the battle to bring broadband to rural America.

While IBEC was committed to staying the course with BPL, its statements indicate that investors and lenders viewed the future of BPL quite differently.  Unfortunately for IBEC, other solutions have overtaken BPL technology.  Substantial stimulus funds were awarded to bring broadband to rural areas,  but the projects selected used fiber optic solutions, not BPL. BPL simply is not viewed as a viable, competitive delivery option for consumer broadband.  IBEC’s closure, while unfortunate, is thus not surprising.

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