Broadband over Powerlines: Regulatory and Policy Issues
Released: 2008-05-13T00:00:00

Background

Congress has expressed significant, ongoing interest in increasing the availability of broadband services throughout the nation, both in expanding the geographic availability of such services (e.g., into rural as well as more urban areas), as well as expanding the service choices available to consumers (e.g, promoting additional service options at reasonable prices).

The telephone, cable, and satellite industries, and more recently the electric utilities, all provide broadband services to consumers. Electric utilities have long had the ability to send communications over their powerlines through what is called powerline communications (PLC) technology, but that capability was used primarily to maintain the operability of the power grid—remote monitoring of the grid and other management functions. It was not offered as a commercial product because of technical limitations and regulatory limitations under the 1935 Public Utility Holding Company Act (PUHCA). Specifically, regarding regulatory limitations, PUHCA prohibited electric utilities from entering the retail telecommunications market without all of their operations, including the telecommunications component, being regulated by the Securities and Exchange Commission under PUHCA. However, in 1996, driven by the elimination under the Telecommunications Act of the PUHCA limitations and the increasing demand for broadband services, electric utilities began exploring ways to turn PLC into a commercially viable, consumer service—Broadband over Powerlines (BPL).

Many electric companies are now in the process of upgrading their transmission and distribution systems to provide BPL. This technology has the potential to play a significant role in increasing the competitive landscape of the electric utility and telecommunications industry, as well as making broadband available to more Americans than ever before. BPL, however, like any technology, has its advantages and disadvantages. For example, BPL, in general, is less expensive to deploy than the cable and telephone companies' broadband offerings because it does not require upgrades to the actual electric grid and is not limited by certain technical constraints of its competitors. Specifically, the telephone companies' broadband service, digital subscriber line (DSL), is limited to consumers within 18,000 feet of a central office unless expensive remote equipment is placed close to the customer. Cable companies, while not limited by the same distance restrictions as the telephone companies, still must upgrade their cable plant as well as the equipment at their "head end" to provide cable modem service. Finally, Internet service delivered via satellite is still primarily a downstream-only service, with a dial-up connection required to send data to the Internet. However, critics of BPL have expressed concern that it will interfere with licensed radio spectrum such as amateur radio, government, and emergency response frequencies.

Companies both in the United States and abroad have pilot tested BPL and many are now deploying it commercially. For example, in 2004, Manassas, VA, began testing BPL service and became the first U.S. community with a commercial BPL offering. The service is now being used by roughly 1,000 of the 12,500 households in the Manassas area. However, in Manassas as well as in other areas where BPL is being deployed, there have been some concerns and difficulties. For example, amateur radio operators have stated their concern that BPL will interfere with their radio signals. Efforts are being made by industry and government to address these concerns while still continuing BPL deployment.

In addition to providing new choices for consumers and increased competition in the broadband market, BPL can provide other benefits, both to the electric utilities and to others. As tests and commercial deployments continue, the electric utilities can capitalize on their existing relationships with consumers and the ubiquity of their networks. Also, BPL can be sold either as a retail service under the electric utility's brand or as a wholesale service to third-party ISPs, offering smaller broadband providers another wire to the customer—and electric utilities have expressed interest in providing such open access on a wholesale basis.

Concerns among electric utilities and investors about BPL deployment do remain, however. Although the pilot tests and limited commercial deployments have thus far proven successful, the viability of large-scale commercial implementation remains unproven. Also, while name recognition will help the electric utilities as they roll out their service, there is also concern that they may have an unfair competitive advantage over smaller, less established providers. In this case, however, this may not be a significant concern because of the size of the established broadband providers, the telephone and cable companies. Finally, although BPL is likely to be deployed further out into rural areas than either cable or DSL, it remains to be seen if BPL is as economical to deploy in those areas as policymakers and rural consumers hope.

The FCC opened a rulemaking proceeding on the technical issues related to BPL deployment in February 2004 and adopted a Report and Order on the proceeding in October 2004 (see "Regulatory Activity—Federal Communications Commission," page 6). Congress may wish to monitor how the FCC implements the rules that will guide BPL development and deployment, as well as monitor more general issues surrounding BPL, such as industry and societal issues, regulatory and industry governance issues, and technical issues. These three categories of issues are discussed in detail at the end of this report (see " Issues for Congress ").

Stakeholders

In addition to marketplace competitors and consumers, the key stakeholders in this issue are the BPL industry, amateur radio operators (represented primarily by the American Radio Relay League (ARRL)), and various government entities.

In favor of BPL deployment and the FCC's rules is the BPL industry: the electric power companies, Internet service providers (ISP), BPL equipment manufacturers, BPL system solutions companies (such as Main.net), and the trade associations representing those companies. Trade associations involved include the Edison Electric Institute, the Powerline Communications Association (PLCA), the PLC Forum, United Power Line Council (UPLC), and the United Telecom Council (UTC). These groups have a financial stake in bringing BPL successfully to market and are eager to enter the broadband business.

Amateur radio users have expressed opposition to BPL deployment because of concerns over its potential negative impact—specifically, interference—on amateur radio frequencies by BPL emissions. Although some of its concerns had been addressed in the BPL Report and Order, the ARRL remained concerned about the impact of widespread deployment of these systems.

In addition to the abovementioned groups, several government entities have an interest in how BPL is deployed. Specifically, local and regional emergency responders, the Department of Defense, the Federal Emergency Management Agency (now part of the Department of Homeland Security), and the National Telecommunications and Information Administration (NTIA) within the Department of Commerce have expressed both concern and support for BPL. Although these groups express concerns similar to those of ARRL—namely that BPL could potentially interfere with emergency communications and steps need to be taken to ensure noninterference—they also express support for BPL because they believe it will contribute to a more secure and better-managed electric transmission and distribution network. The NTIA expresses support for BPL because of its potential to further close the "digital divide," one of its major goals. Further, because of the services that can be offered over BPL (e.g., voice over Internet Protocol [VoIP]), the law enforcement community is also concerned about the regulatory treatment of BPL—specifically, whether BPL services should be subject to federal wiretap requirements set forth in the Communications Assistance for Law Enforcement Act (CALEA).

The FCC has the largest role in how BPL will be deployed. It not only is the regulatory agency that developed the rules governing BPL, it also has a statutory obligation under Section 706 of the Telecommunications Act of 1996 to "encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans." The FCC, therefore, will maintain a significant influence on how the market for BPL service develops.

Federal Communications Commission Activity

The FCC has been investigating BPL since 2003 and adopted rules regulating BPL systems in October 2004; it is also addressing BPL-related issues in its CALEA and IP-Enabled Services Proceedings.

Broadband over Powerline Systems Proceeding

In April 2003, the FCC issued a Notice of Inquiry (NOI), Inquiry Regarding Carrier Current Systems, including Broadband over Powerline Systems , to gather comments concerning whether it should amend its Part 15 Rules "to facilitate the deployment of Access BPL while ensuring that licensed services continue to be protected." The FCC received over five thousand initial and reply comments in response to its NOI during July and August 2003. These comments were discussed at length in the FCC's February 2004 Notice of Proposed Rulemaking (NPRM). The FCC adopted its Report and Order (R&O or "Order") in this proceeding in October 2004. Specifically, the Order—

set forth rules imposing new technical requirements on BPL devices, such as the capability to avoid using any specific frequency and to remotely adjust or shut down any unit; established "excluded frequency bands" within which BPL must avoid operating entirely to protect aeronautical and aircraft receivers communications; and establishes "exclusion zones" in locations close to sensitive operations, such as coast guard or radio astronomy stations, within which BPL must avoid operating on certain frequencies; established consultation requirements with public safety agencies, federal government sensitive stations, and aeronautical stations; established a publicly available BPL notification database to facilitate an organized approach to identification and resolution of harmful interference ; changed the equipment authorization for BPL systems from verification to certification; and improved measurement procedures for all equipment that use RF energy to communicate over power lines.

After the Order was released, the amateur radio community and the BPL industry filed a total of 17 petitions for reconsideration. The FCC released a Public Notice on February 28, 2005, announcing the petitions. Oppositions to petitions were due on March 23, 2005, and replies to the oppositions were due April 4, 2005. On August 3, 2006, the FCC adopted a Memorandum Opinion and Order (MO&O) in this matter. Specifically, the MO&O—

affirmed its rules regarding emission limits for BPL, including its determination that the reduction of emissions to 20 dB below the normal Part 15 emissions limits will constitute adequate interference protection for mobile operations; denied the request by the amateur radio community to prohibit BPL operations pending further study and to exclude BPL from frequencies used for amateur radio operations; denied the request by the television industry to exclude BPL from frequencies above 50 MHz; affirmed the July 7, 2006 deadline for requiring certification for any equipment manufactured, imported or installed on BPL systems, with the proviso that uncertified equipment already in inventory can be used for replacing defective units or to supplement equipment on existing systems for one year within areas already in operation; affirmed the requirement that information regarding BPL deployment must be provided in a public database at least 30 days prior to the deployment of that equipment; adopted changes regarding protection of radio astronomy stations by requiring a new exclusion zone and amending consultation requirements for these stations; adopted changes to provide for continuing protection for aeronautical stations that are relocated denied the request by the aeronautical industry to exclude BPL operating on low-voltage lines from frequencies reserved for certain aeronautical operations; and denied the request by the gas and petroleum industry to be considered as public safety entities.

On October 10, 2006, the ARRL notified the U.S. Court of Appeals for the D.C. Circuit that it would appeal certain aspects of both the FCC's October 2004 R&O and August 2006 MO&O. The court issued its decision in the matter on April 25, 2008, finding that during its rulemaking process, the FCC relied on five scientific studies that measured BPL devices' radio emissions, in an attempt to determine interference risks with other users of the spectrum. Although the agency released those studies during a public comment process required by federal law, it redacted portions of them, arguing they were just "internal" communications that didn't influence its deliberations. But after reviewing the unredacted studies in private, the majority of the judges agreed with the ARRL that it was against federal administrative procedure law to keep those portions under wraps, particularly since they could call the FCC's rules into question.

The court also said the FCC had not offered a "reasoned explanation" for why it rejected ARRL-submitted data that could have influenced its interference estimates and potentially reshaped its rules. The judges opted to send the rules back to the FCC with instructions to clarify those points and publicize its studies more fully, although they did not overturn the rules themselves.

The court did not side entirely with the ARRL on other key points related to the substance of the rules. For instance, the ARRL had argued that the FCC was departing from longstanding agency precedent by refusing to require that BPL operations found to cause "harmful interference" be shut down immediately—the so-called "cease-operations" rule. The court wasn't persuaded by that argument, saying the FCC had explained adequately that there isn't ample evidence that "harmful interference" is a real risk.

Communications Assistance for Law Enforcement Act Proceeding

On August 5, 2005, the FCC ruled that providers of certain broadband and interconnected VoIP services must accommodate law enforcement wiretaps. Such a definition includes the type of service that would be provided via BPL. The FCC found that these services can be considered replacements for conventional telecommunications services currently subject to wiretap rules, including circuit-switched voice service and dial-up Internet access. As such, the new services are covered by CALEA, which requires the FCC to preserve the ability of law enforcement to conduct wiretaps as technology evolves. The rules are limited to facilities-based broadband Internet access service providers and VoIP providers that offer services permitting users to receive calls from, and place calls to, the public switched telephone network.

IP-Enabled Services Proceeding

On March 10, 2004, the FCC released an NPRM, In the Matter of IP-Enabled Services . This rulemaking, still under consideration at the FCC, will likely affect BPL in that it will determine how the services that will be offered via BPL will be regulated. Comments and replies to the NPRM were due May 28 and June 28, 2004, respectively. On June 3, 2005, the FCC released an order on Enhanced 911 services over IP-enabled services. In this order, the Commission adopted rules requiring providers of interconnected voice over Internet Protocol (VoIP) service to supply enhanced 911 (E911) capabilities to their customers. The characteristics of interconnected VoIP services have posed challenges for 911/E911, and threaten to compromise public safety. Thus, the FCC required providers of interconnected VoIP service to provide E911 services to all of their customers as a standard feature of the service, rather than as an optional enhancement. The Commission further required them to provide E911 from wherever the customer is using the service, whether at home or away from home. The FCC had no findings regarding whether a VoIP service that is interconnected with the public switched telephone network should be classified as a telecommunications service or an information service.

Wireless Broadband Task Force Report

On March 8, 2005, the FCC's Wireless Broadband Access Task Force released its report to the Commission containing its findings and recommendations. The report highlights how some BPL providers are using Wi-Fi (i.e., wireless networking) to complement their service offerings, either employing Wi-Fi access points within the BPL network to transmit information from one power line to another or to use wireless networking technologies to reach from utility poles to individual homes. Comments to the report were due April 22, 2005, and replies were due May 23, 2005. No further action has been taken at this time.

Other Activity

In December 2005, the UPLC filed a petition for declaratory ruling requesting that the FCC find that BPL-enabled Internet access service is an information service, rather than a telecommunications service. In response, in October 2006, the FCC issued an MO&O affirming the UPLC's petition, which placed BPL-enabled Internet access service on an equal regulatory footing with other broadband services, such as cable modem service and DSL Internet access service.

National Telecommunications and Information Administration Activity

In April 2004, the NTIA released Phase 1 of a study on the potential for BPL to interfere with radio frequencies used by Government users for homeland security, defense, and emergency response. In that report, initiated by NTIA in response to the FCC's NOI, the NTIA described federal government usage of the 1.7-80 MHz spectrum, identified associated interference concerns, and outlined the studies it planned to conduct to address those concerns. The report (1) contains findings on interference risks to radio reception in the immediate vicinity of overhead power lines used by BPL systems (Access BPL only); (2) suggests means for reducing these risks, and (3) identifies techniques for mitigating interference should it occur.

One of the most important findings of the report was that existing Part 15 compliance measurement procedures for BPL tended to significantly underestimate BPL peak field strength. Such underestimation increases the risk of interference. According the report, as currently applied to BPL systems, Part 15 measurement guidelines do not address the unique characteristics of BPL emissions. Overall, the report concludes that BPL could interfere with licensed radio spectrum, even though under the current Part 15 testing parameters, emission levels would be within the limits. Therefore, it was recommended that the compliance measurement procedures be refined.

The NTIA stated, however, that refining the compliance measurement procedures should not impede deployment of BPL because the technology can reportedly be deployed within a more narrow range of frequencies that will not cause interference. For these reasons, the NTIA did not recommend that the FCC relax Part 15 field strength limits for BPL systems. Instead, NTIA recommended new measurement provisions derived from existing guidelines, including using measurement antenna heights near the height of power lines; measuring at a uniform distance of 10 meters from the BPL device and power lines; and measuring using a calibrated rod antenna or a loop antenna in connection with appropriate factors relating magnetic and electric field strength levels at frequencies below 30 MHz.

Overall, NTIA supported the continued development and deployment of BPL and suggested several means by which BPL interference could be prevented or eliminated. For example, mandatory registration of certain aspects of BPL systems would give radio operators the information needed to advise BPL operators of any anticipated interference problems or suspected actual interference. NTIA also recommended that BPL developers consider, for example, routinely using the minimum output power needed from each BPL device; avoiding locally used radio frequencies; using filters and terminations to extinguish BPL signals on power lines where they are not needed; and carefully selecting BPL signal frequencies to decrease radiation.

Issues for Congress

Issues potentially of interest to Congress may be divided into three categories.

Industry and societal issues, such as the impact of BPL on competition in broadband services, and the potential for BPL to reach previously unserved and underserved populations. Larger regulatory and industry governance issues, such as how the regulatory classification of BPL might affect other FCC regulations and proceedings (e.g., the appropriate regulatory classification of IP-based services) and electric utility regulations (e.g., reliability mandates, Federal Energy Regulatory Commission (FERC) regulations, and Public Utility Holding Company Act (PUHCA) exemptions). Technical issues, such as how BPL should be implemented to minimize interference with other services (e.g., amateur radio frequencies) and what effect BPL technology may have on reliability and security of the transmission and distribution systems and homeland security goals (i.e., BPL may result in benefits as well as risks).

Each issue is discussed below.

Industry Competition and Societal Issues

Since the passage of the 1996 Telecommunications Act, Congress has sought to increase both competition between broadband service providers, as well as the availability and adoption of broadband services. Although the current competitive environment for broadband service could be considered fairly robust, with significant competition between cable and DSL providers, both policymakers and consumers alike would likely welcome a third wide-spread, facilities-based option for receiving that service (satellite broadband service is not widely available as it usually requires a dial-up "uplink" to the Internet). BPL could provide that opportunity for the "third wire" to the home.

While further increasing consumer choice is a goal of both Congress and the FCC, there are still consumers who have no options or perhaps only one option for receiving broadband service. Some of those consumers are likely part of those populations that are traditionally underserved, (e.g., rural residents, low-income consumers) and for them, BPL may also provide at least a partial solution. BPL, not being limited, technically, by distance and not requiring upgrades to the electric lines themselves, is significantly easier to deploy to what might be considered by cable and DSL providers to be "undesirable" areas. Of course, cost and potential profitability are still issues in those areas and there will always be areas where deployment is simply not realistic either technologically or economically, or both.

Congress may wish to continue monitoring how the FCC balances ensuring that BPL, as a new technology, is given every opportunity to reach the market, while also ensuring that it is not given an unfair regulatory advantage over other similar services. In the coming months, the electric utilities will roll out their commercial BPL offerings. As electric utilities deploy their commercial systems, the FCC's role in ensuring that the utilities are given incentives for wide BPL deployment, while also considering additional policy questions that arise, will be watched to assess the success of both the FCC and of BPL.

Regulatory and Industry-Governance Issues

Broadband over powerlines is just the latest in a growing list of technologies and services that challenge the current structure of the FCC and the statutory and regulatory "stove pipes" required by current law. While BPL is a technology for the delivery of Internet service, it challenges traditional and embedded thinking and paradigms about telecommunications and information services because it does not fit neatly into an existing category of service. If Congress decides to amend the country's current communications laws, it may consider the impact that such new technologies are having on the way lawmakers and regulators have traditionally looked at underlying transmission technologies.

With respect to IP-enabled services that would be provided over BPL, the one with the most legal and regulatory impact may be IP-based voice service (voice over Internet Protocol or VoIP). VoIP is different from traditional telephone service in that it does not employ a single, dedicated path between the calling parties (called circuit switching). Instead, VoIP "translates" analog voice into digital "packets" and transmits those packets along multiple paths (called packet switching) and reassembles the packets at the receiving end. This is the same format, or protocol, used to transmit email, instant messages, video, and other data via the Internet. Thus, voice is no longer a separate service—voice data looks just like every other kind of data.

Until recently, VoIP has been provided by companies that are in one way or another "communications providers," whether that be voice, data, or video communication. However, electricity companies have not generally been in the business of providing resale communications. This blurring of lines between voice and other types of data has already raised issues such as law enforcement's ability to conduct wiretaps and state versus federal jurisdiction over such calls (discussed earlier in this report); intercarrier compensation for call termination on the public switched network; and universal service. These issues will likely become even more complex with the entry of electric utilities into the communications business since they will be offering IP-enabled services, both directly to the consumer as well as to third-party vendors (i.e., Internet service providers). As the market develops a tension may develop over whether these new entrants should be required to adhere to existing requirements, or perhaps how existing requirements should be changed to better reflect the current technological and competitive environment.

Technical Issues

The FCC focused on technical issues in its BPL proceedings. These issues have included how BPL should be implemented to minimize interference with other services (e.g., amateur radio frequencies) and what effect BPL technology could have on reliability and security of the transmission and distribution systems (i.e., BPL may provide benefits as well as potentially create risks). Although the FCC's regulations mandate the technical standards under which BPL will be deployed, those standards will very likely have an impact on the previous two categories of issues and, therefore, Congress may have an interest in monitoring the development of these technical issues as well.

Interference with Other Licensed Services

Some stakeholders have continued to express varying degrees of concern over the potential of BPL to disrupt licensed radio services, including amateur, public safety, and emergency response frequencies. The FCC continues to address those concerns in its BPL proceedings.

Service Reliability and Security Issues

Other stakeholders stated during the proceeding that BPL upgrades by the electric utilities have the potential to enhance the security and reliability of the transmission and distribution networks. For example, BPL technology can provide electricity outage detection, home energy management, distribution transformer overload analysis, demand side management, supervisory control and data acquisition (SCADA) data transmission, safety checks for isolated circuits, power quality monitoring, phase loss detection, line testing, and outage localization, among other things. However, while the first four functions simply provide additional operational monitoring and control abilities, the fact that enhanced data may be supplied to the SCADA system via BPL could be of concern to electric utility companies and homeland/infrastructure security officials. The FCC did not address this issue in its rulemaking proceeding. However, some parties that did not participate in the rulemaking have expressed concern that BPL would make the transmission and distribution system vulnerable to individuals or groups trying to steal or corrupt consumers' Internet data or the utilities' monitoring data, or even to terrorists trying to cause a large-scale disruption of the nation's electricity supply. If sensitive operational information, as well as consumers' personal data, is being sent over the lines the physical security of those lines and the integrity of the data on them become a serious concern. Although BPL may offer significant social and competitive benefits, the possible negative impact that BPL may have on reliability and security may be a more important factor in BPL deployment.

Congressional Action: 110th Congress

In January 2007, Representative Mike Ross introduced H.R. 462 , the Emergency Amateur Radio Interference Protection Act. This bill would require that within 90 days after the date of enactment, the FCC would be required to conduct "a study of the interference potential of systems for the transmission of broadband Internet services over power lines." The study would examine—

the variation of field strength of BPL service signals with distance from overhead power lines, and a technical justification for the use of any particular distance extrapolation factor; the depth of adaptive, or 'notch', filtering for attenuating normally permitted BPL service radiated emission levels that would be necessary and sufficient to protect the reliability of mobile radio communications; a technical justification for the permitted, radiated emission levels of BPL signals relative to ambient levels of man-made noise from other sources; and options for new or improved rules related to the transmission of BPL service that, if implemented, may prevent harmful interference to public safety and other radio communications systems.

Upon completion, the FCC would be required to submit the study report to the House Committee on Energy and Commerce and the Senate Committee on Commerce, Science, and Transportation. This bill was referred to the House Committee on Energy and Commerce. No further action has been taken.

In June 2007, Senator Mark Pryor introduced S. 1629 , which contains the same study requirements as H.R. 462 . That bill was referred to the Senate Committee on Commerce, Science, and Transportation.

On August 4, 2007, the House of Representatives passed H.R. 3221 , the New Direction for Energy Independence, National Security, and Consumer Protection Act. If signed into law, Section 9113(a)(8) would require an assessment by a newly established Grid Modernization Commission to determine, biannually, the progress being made toward modernizing the electric system, including an "assessment of ancillary benefits to other economic sectors or activities beyond the electricity sector, such as potential broadband service over power lines."

For Additional Reading

CRS Products

CRS Report RL33542, Broadband Internet Regulation and Access: Background and Issues , by [author name scrubbed] and [author name scrubbed].

CRS Report RL32728, Electric Utility Regulatory Reform: Issues for the 109 th Congress , by [author name scrubbed].

Websites

American Public Power Association, http://www.appanet.org

American Radio Relay League, http://www.arrl.org

Edison Electric Institute, http://www.eei.org

Federal Communications Commission, http://www.fcc.gov/

FCC NOI: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-100A1.pdf FCC NPRM: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-29A1.pdf

National Telecommunications and Information Administration, http://www.ntia.doc.gov/

United Power Line Council, http://www.uplc.org

United Telecom Council, http://www.utc.org

Other Reports and Documents

"How Broadband over Powerlines Works," Robert Valdes, http://computer.howstuffworks.com/bpl.htm/printable (undated).