TELECOM Digest OnLine - Sorted: TXU and Current Team up on Internet Over Power Lines

TXU and Current Team up on Internet Over Power Lines

Reuters News Wire (
Mon, 19 Dec 2005 21:25:28 -0600

TXU Corp., Texas's largest utility, said on Monday it was teaming up
with Current Communications Group to offer high-speed Internet access
over power lines to about 2 million homes and businesses in the state.

The companies also said they plan to use Current's broadband over
power line (BPL) technology to allow TXU to more actively monitor and
manage its electrical grid.

TXU agreed to pay Current about $150 million over 10 years to use the
"smart grid" capabilities of Current's BPL network. the companies said
in a statement. TXU said the payments will not affect its previously
disclosed financial forecasts.

Privately-held BPL provider Current, whose investors include Google
Inc. and U.S. utility Cinergy Corp., will provide broadband and
wireless Internet services to TXU's customers under the agreement.

TXU will also become an equity holder in Current as part of the

The companies plan to start deploying the broadband network in 2006.

Broadband service over power lines has been highly touted by equipment
makers and federal regulators as a possible competitor to cable and
telephone services that handle almost all of the roughly 40 million
U.S. residential broadband connections.

But until recently U.S. utilities interested in the service have faced
various financial and technical problems. The signals used to carry
data over electrical lines can cause interference with radio
equipment, and can travel only a short distance before weakening,
requiring repeaters in many areas.

Some analysts have also said that most utilities don't have the skills
to challenge companies that already have years of experience in the
fiercely competitive Internet service business.

Nevertheless several top U.S. power companies, including Cinergy and
CenterPoint Energy Inc., have recently made investments in BPL. Aside
from the draw of additional revenue from providing Internet services,
the companies have been attracted by the possibility of cost savings
from enhancement of their electrical grids.

TXU said that it hopes to increase network reliability and power
quality and efficiently implement automated meter reading through its
partnership with Current. It said the technology should also help it
prevent, detect and restore customer outages more effectively.

TXU's electric transmission unit, TXU Electric Delivery, provides
power to over 2.9 million electric delivery points.

Copyright 2005 Reuters Limited.

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