[IP] Pittsburgh Duquesne Light plugs in with Wi-Fi service
Duquesne Light plugs in with Wi-Fi service
Subscription service to be rolled out in Monroeville area
Friday, July 22, 2005
By Len Boselovic, Pittsburgh Post-Gazette
Duquesne Light said yesterday it would offer wireless Internet
service to about 2,800 customers in the Monroeville area, joining a
lengthening parade of electric utilities competing with telephone-
and cable-based Internet providers.
Online Graphic
See a map showing the coverage area for Duquesne Light's Wi-Fi service.
The basic $19.95 monthly service will be offered through Duquesne
Broadband, a joint venture between the Downtown utility and BPL
Global, a Pittsburgh company that specializes in broadband service
over power lines. Duquesne Light is majority owner of the venture.
Initially, Duquesne Broadband will be offered in two areas with
residential customers and a limited number of small commercial
customers, Duquesne spokesman Joe Balaban said. The neighborhoods
were chosen because their demographics reflect the Pittsburgh market,
he said.
The Monroeville customers will receive a brochure shortly outlining
the service, which will be available beginning Aug. 8. The decision
whether to expand to other neighborhoods served by Duquesne Light
will be made in six to nine months, Balaban said.
Electric utilities have been able to offer the service for years, but
it has not caught on for technical and financial reasons. However,
more utilities are test marketing improved technology, and investors
are increasingly willing to finance the ventures.
This month, Goldman, Sachs & Co., Google, The Hearst Corp. and others
invested a reported $100 million in Current Communications Group. The
Germantown, Md., company provides the same types of services to
utilities such as BPL Global, which recently received $1 million from
a private venture fund, PA Early Stage Partners, the state-supported
Innovation Works tech support agency and other investors.
"I'm a bit of a skeptic, but I think when you see Google and Goldman
putting some money behind this, it does add to the credibility," said
Jim Penhune, a broadband analyst with Boston consultant Strategy
Analytics.
Duquesne said broadband service over its power lines will be faster
than dial-up and cost less than cable. Customers will be able to
connect to the Internet through any electrical outlet in their home
rather than being tied to a telephone or cable line.
The basic service will operate at speeds of 500 kilobits per second
while the $29.95 per month premium service will operate at speeds of
3 megabits per second, Balaban said. Penhune said the speed and
pricing are competitive.
"It will be interesting to see if power lines can compete in a market
that is already pretty well served by the incumbent operators," he said.
BPL Global's technology also will help Duquesne spot problems on
transmission lines, which will improve service to electric customers,
Balaban said.
BPL Global's board includes former Pittsburgh Steeler Andy Russell
and Samuel Zacharias, chairman of Gateway Financial, a Downtown
insurance advisory services firm. BPL expects the venture to generate
revenue of $50 million over the next five years by offering the
service to 400,000 households.
Duquesne Light President and Chief Executive Officer Morgan K.
O'Brien told analysts in December the company expects to increase the
earnings of its communications business to $5 million by 2008 with
minimal capital investment.
Last year, the unit accounted for $1.7 million of the company's $87
million profit.
Allentown, Pa.-based PPL Corp. has been offering the service to
Pennsylvania Power & Light customers in the Lehigh Valley since 2002.
Spokesman Jim Santanasto said the venture has several hundred customers.
Cincinnati-based Cinergy, which is partnering with Current,
introduced it in March 2004 to customers in the greater Cincinnati
area. Spokeswoman Kathy Meinke said it is available to 50,000
households but declined to provide a customer count.
(Len Boselovic can be reached at lboselovic@xxxxxxxxxxxxxxxx or
412-263-1941.)
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