Pittsburgh Duquesne Light plugs in with Wi-Fi service

[David Farber <dave () farber net>]

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 () post-gazette com or  
412-263-1941.)

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