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New player in high-speed Internet game

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MARK AUSTIN THOMAS: Millions of Americans connect to the information superhighway with high-speed Internet connections from their phone or cable company. But now, electricity companies are starting to get into the mix with Broadband over Power Lines or BPL. Mark Nootbaar has the story.

MARK NOOTBAR: Power companies can send high-speed Internet communications over copper wires that run through every neighborhood in America making ubiquitous high-speed Internet a possibility. But at what price?

Sam Spencer is editor of the newsletter BPL Today. He says the industry could be at a tipping point.

SAM SPENCER:"I think this year we're going to see that the technology is finally reaching a point where it is affordable enough that a utility can actually really make the argument that it's worth rolling out."

By purchasing the right equipment power companies can quickly offer Internet service to millions of new customers. There are several pilot projects being launched in the US, including one in the Pittsburgh suburb of Monroeville. That service is being offered by Duquesne Broadband -- a spinout of the local power company.

Company president Mark Rupnik says a utility can be ready to offer BPL in a short period of time and at a third of the equipment costs of DSL service.

MARK RUPNIK:"The electrical infrastructure exists. Our equipment just connects to that infrastructure in a non-intrusive way. We use what are called couplers to couple to the power lines very easy and very quick to expand utilization of the network."

But to make BPL work the local power company has to create a "Smart Grid" by adding Internet style communications equipment to the power lines. That allows the utility to monitor power transmission equipment, remotely read meters and maybe someday talk to your appliances.

Sam Spencer says without a smart grid BPL does not work -- especially in rural areas.

SAM SPENCER:"For those deployments utilities are looking for the grid applications. And then if someone else can come in and make a business case for delivering broadband service to those customers then we'll have connectivity that way."

Texas has a law that prevents power companies from charging customers for infrastructure that will only benefit BPL customers. Other states have similar laws pending. Spencer says where pilot programs are working it has driven down the cost of other high-speed offerings, but that has not yet been the case in Pittsburgh. The local power company hopes to some day roll out BPL service to all of its 585,000 customers. Thorn King of Duquesne communications says he sees high-speed Internet access as part of everyday life.

THORN KING:"With the opportunity to have voice over IP so you can get your telephone service across the Internet as well as video services over the Internet. More and more people will be using Internet service as the primary communication service from their home."

The BPL project in Pittsburgh uses wireless technology which means eventually customers will be able to roam about the community without losing access. Public safety officials are eyeing such city-wide networks as a way to keep officers connected.

In Pittsburgh, I'm Mark Nootbaar for Marketplace.

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