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PUC Approves Power Lines for Net Access

April 28, 2006|James S. Granelli | Times Staff Writer

Despite protests from consumer advocates, state regulators on Thursday approved a plan allowing power utilities to offer high-speed Internet connections over electricity lines.

In a 4-1 vote, the Public Utilities Commission granted utilities the authority to establish subsidiary companies for delivering broadband over power line, or BPL, and the option of transferring free the use of the power grid to those affiliates.

"We do this because of our hope that BPL will bring valuable, additional competition to the California broadband market," said Commissioner Rachelle Chong, who sponsored the proposal.

"As the home of Silicon Valley, we want to be a broadband leader in the nation."

The technology, working in some small areas of the country but not yet in any mass market, has been "on the horizon of widespread U.S. adoption for some time," said Jorge Blasco, chief executive of Design of Systems on Silicon, a Spanish company that makes the gear that supports power-line broadband. The PUC's vote "could be a catalyst for delivering high-speed, cost-effective access to consumers."

But Commissioner Geoffrey F. Brown, whose alternative plan was shot down, argued that Chong's proposal would be "giving away an asset in perpetuity." Brown said that because the lines were built with ratepayer money, electricity customers should share in the benefits.

Chong's proposal gives utilities the option of turning over use of the lines free or charging access fees, profit from which would be split with ratepayers.

Only San Diego Gas & Electric Co., a unit of Sempra Energy, has said it would give free access to a subsidiary. Southern California Edison Co. and Pacific Gas & Electric Co. have said they would prefer a business model in which they charge a provider of broadband over power line for using the lines.

Consumer advocates chafed over Chong's views.

"This commission took the laudable objective of encouraging more high-speed Internet competitors and undermined it with a ham-handed, ideology-blinded giveaway to Sempra Energy," said Michael Shames, executive director of the Utility Consumers' Action Network.

Bill Nusbaum, senior attorney for the Utility Reform Network, said the agency had a "warped" perspective if it believed it created a situation that allowed utilities to enter a risky business while protecting utility customers from any downside.

Commissioners are "busy patting themselves on the back for being such 'enlightened' regulators when all they have done is to continue what this commission is so good at -- corporate giveaways," he said.

A San Diego Gas & Electric spokesman said the commission's actions "create a very favorable climate for the development of BPL systems." The company will continue testing new gear "to determine its safety and reliability on our system."

Edison, a unit of Edison International, said the new rules would give it the framework for discussions with power-line broadband providers. And Pacific Gas & Electric, a unit of PG&E Corp., said the decision would spur broadband services by "removing unnecessary regulatory obstacles and uncertainty."

Both had opposed an earlier version of Chong's proposal that would have prohibited utilities from charging for access to the power grid.

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