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Tuesday, March 2, 2004

Cinergy plugs in as Web provider
Power lines set to carry Internet to outlet near you

By Mike Boyer
The Cincinnati Enquirer

A unit of Cinergy Corp. today will become the nation's first electric utility to offer high-
speed Internet service to customers via its power lines, turning every electrical outlet in
homes or offices into a Web connection.

The technology, which will be offered first in Hyde Park and Mount Lookout, holds the promise
of adding competition and cutting prices for broadband services while making such service
available (particularly in remote and rural areas) without costly investments in cables.

The Federal Communications Commission has been pushing the technology to bolster competition -
and thus spur more Americans, who are less likely than Japanese or South Korean consumers, to
have broadband access. FCC Chairman Michael Powell has said the technology like the kind
Cinergy will use "could simply blow the doors off the provision of broadband."

Cinergy Broadband teamed with Current Communications Group, a Germantown, Md., technology
company to test the service - known as broadband over power lines or BPL - in about 100 homes
in Hyde Park in the last year.

"Our pilot has been very successful, with more than 75 percent saying they would be willing to
subscribe to the service" said William Grealis, Cinergy executive vice president and president
of Cinergy Broadband.

Cinergy and Current have formed a 50-50 joint venture to roll out the service here under the
Current Communications name.

Current joins Cincinnati Bell's Zoomtown digital subscriber service and Time Warner Cable's
Road Runner service in marketing high-speed Internet in Cincinnati.

Cinergy thinks that BPL has a couple of advantages over competitors. It doesn't require a
cable or phone line, and can be operated from anyplace where there's an electric wall outlet.
Upload and download speeds are the same, unlike DSL and cable modem service - whose upload
speeds are slower than download speeds.

"We believe we have better speeds at competitive prices," Grealis said.

Cinergy and Current plan to offer several levels of service starting at 1 megabit a second at
$29.95 a month. Road Runner locally costs $44.95 a month for download speeds of up to 3
megabits; Cincinnati Bell's Zoomtown costs $41.95 a month for the same speed. They both offer
signup discounts.

Cinergy's service will be marketed initially to about 16,000 homes in the Hyde Park-Mount
Lookout area.

In what he described as a "measured rollout," Grealis said the partners plan to make the
service available to about 55,000 homes in a dozen communities in Hamilton County this year,
including Wyoming, Delhi Township, Terrace Park and Norwood. Early next year, it will expand
into Northern Kentucky.

The joint venture also plans to begin offering voice over the Internet telephone service to
customers next fall. Prices for that service haven't been set.

Cinergy and privately held Current are forming another joint venture to market the technology
to municipally owned power companies nationally. Grealis said that's a potential market of 24
million homes.

Cinergy is also investing $10 million in Current Communications, as part of a new round of
venture funding of more than $70 million, along with Current's other investors Liberty
Associated Partners and EnerTech Capital LP. Cinergy Broadband is part of the utility's
nonregulated business and isn't funded by electric or gas rates.

"I think there will be a stampede toward (broadband over power lines) in 2005," said Alan
Shark, president of the Power Line Communications Association, an industry trade group in
Arlington, Va.

Growing popularity of high-speed Internet service for game playing and downloading music,
coupled with refinements in the technology itself, are building momentum for commercial
deployment, he said.

One of the problems with broadband over power lines in the past has been a lack of industry
standards and competing technologies, he said.

About a dozen utilities and technology companies have been experimenting with broadband for
several years.

Shark said the only commercial deployment of BPL now is in Manassas, Va., where the
municipality has teamed with a New York investment firm to market the capability to about
15,000 homes.

Although broadband over power lines has been discussed for years, technical limitations have
slowed its development, but that might be about to change.

The FCC recently announced it plans to begin developing rules for the technology and has
signaled that its views BPL as a third "pipeline" to deliver high-speed Internet service,
along with cable modems and digital telephone lines.

After evaluating various BPL technologies for several years, Grealis said Current's system "is
one that works, and we think it's the only one that works,"

Tim Barhorst, an information technology consultant in Hyde Park who has been using the
technology for a year, said he's been impressed.

"I find it's very convenient," he said, noting that he can set up his computer anywhere
there's an electric outlet.

He said the speeds are better than his Zoomtown service and comparable to Road Runner.

Alex Pardo of Cinergy said the Internet traffic travels on a separate band wave from the
electric current, so there's no interference.

He said the utility has found no problem with radio wave interference, a concern raised by
many amateur radio operators.

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