Utilities, telcos look for common ground

Sean Buckley, FierceTelecomAt a time when consumers are being more conscious of their spending, including necessities like electricity, the notion of an easy smart energy plan that would help users track their usage via an online portal is an enticing proposition.
To make this idea reality, there will need to be obvious cooperation between electric and gas utilities and the telcos--two industries that couldn't be more different in terms of their service and network needs.

Creating this marriage comes with the obvious challenge of bringing together the minds of two very distinct industries. Utilities, much like the old telecom monopoly, don't typically invite outsiders, including traditional telcos to their party. While sharing the same poles to deliver services to the home, utilities have built out their own proprietary communications networks that often consist of fiber and microwave to communicate between sites and collect information about the performance and related statistics of the electrical grid.

Now comes the dawn of the smart energy concept, one that includes the modernization of the electrical grid and providing a home area network that can communicate with the utility power network via powerline network or RF-based network standards such as Zigbee, INSTEON, or WiFi. The HAN will enable the consumer to look at their energy usage patterns from a web portal or a smart energy device (thermostat).

That's not to say the marriage of telecom and utilities can't work. One angle that's emerged over the past decade or so is the utility-based telco, or what might call the utelco. A number of municipally-owned utelcos were able overcome political obstacles (many launched by telcos themselves) to deliver either wholesale bandwidth or, in the case of BVU and Pulaski Electric System, FTTH-based triple play services.

Take Bristol, Va.-based BVU, for instance. After having to fight with local incumbent provider Verizon and surrounding cable operators that protested their movement into the service provider space, BVU prevailed and now provides triple play services (voice, video and data) over a FTTH network. More recently, BVU and fellow utelco Tennessee-based Pulaski Electric System decided to leverage their respective FTTH networks for monitoring their electric grids and paving a foundation to deliver smart energy services to homes.

But as I have noted before in the article we previously wrote on smart grids, no two utilities are approaching the smart energy concept the same. Citing obvious cost concerns over replacing meters on the side of consumer's homes, Washington PUD No. 3 is for now leveraging its own wholesale fiber network to mainly monitor its internal electric network.

Of course, the newest players in the smart energy game are the traditional telcos. Notable and obvious mentions here include the big three U.S. incumbent carriers: AT&T (NYSE: T), Qwest (NYSE: Q) and Verizon (NYSE: VZ). Even if these efforts are still embryonic, these carriers have been crafting wireless and wireline-based offerings for utilities.

Showing its seriousness about working with the utility industry to advance smart energy and perhaps better understanding of what utilities need from the telco, Verizon is working with the Utilities Telecom Council (UTC) to develop a conduct a study of what utilities require for their telecom and information technology needs. Of course, this is just a study and we won't know the results until later this year.

Perhaps what the telco's efforts are showing is that garden walls could be coming down between these two industries.
If the telco and utility companies can find common ground, consumers will be able to get a better handle on how to more cut down waste of the electrical resource they use every day.-Sean 

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