The Germans have got in first with their towels again. For the pool-side read broadband access to homes and small businesses and for towels look no further than the existing mains electricity supply. Yes, the German utility companies are using the power grid to deliver high-bandwidth Internet access without the need to dial up. The system is expected to be rolled out across the 16 German states this autumn.
There are at least 17 countries, including Germany, Sweden, Spain, Israel, Korea and the US, involved in the development and manufacture of power-line technology, which, after a shaky start in the 1990s, is regaining momentum as an alternative method of delivering broadband services over the local loop of copper wires.
However, but for some developments a few years ago, it could have been the other way round, with the rest of the world looking to the UK for answers.
Three years ago, UK utility Norweb was developing digital power-line technology in collaboration with global telecoms provider Nortel. Their joint venture Nor.Web launched a trial in Manchester, but after a few rounds of testing, the trials were dropped. At the time, the director of power systems at Nor.Web DPL was Paul Brown, now chief executive of research and consultancy firm White Box Solutions. Brown says a major factor in the failure of Nor.Web was that it was a 50/50 joint venture between a telecoms manufacturer and a utility.
"They're opposite cultures," he says. Utilities want a steady return on their revenue stream. They are not interested in being leading edge. Brown says that when Nor.Web decided to wind up its operations, there was a surge of interest among the UK utilities but, by then, it was too late.
The Nor.Web trials suffered from a lack of investment and because of the speed at which the company was trying to push the new technology. "The rate at which power-line technology was taken from research and development to a field trial was pretty quick," says Brown.
Nor.Web was only trading from April 1998 to September 1999 and in that 18-month period it undertook 18 trials in 10 countries. There were also technical problems such as radiating interference from street lamps and buildings.
"In fairness, we are talking about this in hindsight," says Brown. "Nor.Web was doing it first."
This also helps to explain the attitude of the government agency that oversees the radio spectrum, the Radiocommunications Agency (RA). Brown feels that the RA was nervous in its approach but concedes, "It was there to protect the radio spectrum. It didn't have a book on this." He says many utilities are interested in power-line technology and there is much work going on in the UK with standards bodies and regulators. But he believes the utilities are playing a waiting game. "They want to see the case proven to them."
Jim Norton, former chief executive of the RA, says the demise of UK power-line technology in the 1990s was due to the problem of radiating interference. Norton, now executive chairman at Deutsche Telekom UK, says that if Nor.Web had used the more expensive spread-spectrum technology in its trials, radiating interference could have been avoided. Instead, the company chose to use lower cost technology.
The only way Nor.Web could alleviate the interference was to fit every streetlamp with a filter. The labour costs alone would have been enormous. It was this, not the government agency, that killed power-line technology in the UK, says Norton.
"The RA took a correct line," he says. "We did trials and measured the interference and it was awful. It just wasn't viable." Criticisms of a lack of co-ordination between the RA and the telecoms watchdog Oftel were "overdone", Norton adds.
He believes power-line technology has missed the boat and alternatives, such as radio fixed access, are more viable. "There was a window for doing it which has since passed," he says. "But you shouldn't bet against it." If a cheaper solution using spread spectrum technology came along, he believes it could still take off in the UK.
One UK utility that is taking a close look at using technology that runs on the mains electricity network is Scottish and Southern Energy (SSE). It is also the only UK power utility member in the Powerline Communications Forum, which represents the interests of the industry worldwide.
"We've been following the progress and now it seems that most technical and commercial considerations have been sorted out," says Keith Maclean, general manager of the telecoms arm of SSE. But there is still a problem with regulation. "At the moment, there are no suitable guidelines that would allow the use of power lines in the UK," he says. "That is the main hurdle."
Maclean says SSE is willing to co-operate in any testing but is unwilling to commit any significant funding to power-line technology until the regulatory aspect becomes clearer. "The feeling is that the regulation in the UK is too stringent," he says.
SSE is primarily looking at power-line technology to provide business services. It is investigating the use of access technology - using low- and medium-voltage networks, both overhead and underground - and "in-house" distribution, using a building's electricity network to form a local area network within offices and homes. It hopes the latter will be useful for small- and medium-sized businesses.
"Anything that is lowering the cost of implementing broadband services immediately has a benefit for rural areas," says Maclean. "And the experience of LLU [local loop unbundling] would suggest that an alternative that wasn't reliant on BT's wires would be welcomed."
But regulation is the key. "I'm confident that we could, and would, move forward if this situation was clarified," he says.
In Germany, power-line services are regulated by the Regulierungsbehoerde fur Telekommunikation und Post (RegTP), a body similar to Ofcom, the single communications regulator which will replace the RA and Oftel, possibly as early as 2003. John Ryan, a protection engineer at the Electricity Association, says that having separate regulators for both telecoms and the radio spectrum was another factor in frustrating the roll-out of power-line technology in the UK. He believes the important step in Germany came when RegTP's MP30 was made the legal standard for testing networks this year. "That's what pushed things ahead in Germany," he says.
In the UK, the RA has a similar test, the MPT1570, but it has only addressed the radio frequency band used by power lines. "In the UK the regulatory problems hadn't been sorted out," says Ryan. "They couldn't roll it out quickly enough." And this could have grave implications for the future of the technology.
Ryan feels utilities have been frightened off to a certain extent by the experiences of the past few years. "The feeling abroad is that the UK regulator has taken a hard line," he says. "The Germans have taken a softer line. It appears they allow local variations on MP30, which gives you a base-level standard but not a compliance standard."
However, the regulations were strong enough to ensure that Siemens, for instance, was forced to abandon its trials in Germany because its equipment would not have complied.
As yet, there is still no common standard for power-line technology in Europe. However, the European Commission has issued a draft mandate with a view to establishing pan-European standards for power-line technology. Developing a standard will help companies to attract more customers and expand into other countries. It will also help to speed up the roll-out across the continent.
"The problem is there are so many parties involved and they're in competition with each other," says Ryan. But getting a standard is essential because without one, home networking and access power-line technologies will interfere with each other, he says.
If the situation in Germany is repeated elsewhere, with utilities choosing to work with different power-line suppliers, the chances of achieving compatibility and interoperability could be in doubt. And it remains to be seen whether widespread power-line-based systems will interfere with other electrical appliances or the radio frequencies used by emergency services or the military.
If companies do decide to use the electricity grid in the UK to provide broadband access, instead of BT's copper wires, the telecoms giant stands to lose a pretty penny. And, considering the way the company dragged its feet over the local loop unbundling process, BT may well do everything it can to stall the acceptance of power-line technology in the UK.
But this need not be the case. Brown admits that BT would receive more competition if this technology was adopted but he believes there are many collaborative issues which could be addressed. For example, BT could provide communications to the buildings while another supplier ran the internal distribution.
"I doubt that BT would lobby too furiously against it," adds Mark Main, a senior analyst at Ovum. "BT would argue that it already has better technology available."
He also points to the limitations of power-line technology, based on the fact that electricity cables were not designed to carry data traffic. "It fills a gap in the market but you have to distinguish it from ADSL [asymmetric digital subscriber line] and ISDN [integrated service digital network]," he says.
"It doesn't directly compete with cable modem and DSL because it hasn't got the bandwidth." With power-line technology, more users means poorer quality throughput and "lengthy sessions of audio and video streaming soon start gobbling up the bandwidth".
Because of this limitation, power-line technology will not be able to deliver interactive TV. Nor will it support voice recognition services because the reliability isn't there, says Main.
"Power line doesn't have a future story to it," he says. "I doubt it will be able to keep up with developments in DSL."
Main has no doubt that power-line technology can work but he questions whether there is a demand for it. "All of these things are 'do-able'," he says, "It's a case of do people really want it and is there a market for it?" He thinks home networking is interesting, "but it's got to be simple and cheap".
Home networking makes use of domestic electricity circuits. At the forefront of this technology is the HomePlug Powerline Alliance, which is working to develop a home networking protocol.
The alliance recently concluded its first large-scale field trial, testing its technology in 500 US and Canadian homes. HomePlug claims to have achieved a peak data rate of 8.4mbps in the trial, with throughputs exceeding 5mbps for 80% of the time.
However, although HomePlug is a big player in the powerline networking sector, it could come unstuck in Europe. It plans to use the same spectrum for its networking services as the utility companies want to use to offer broadband access based on power lines. It is unlikely that the European utilities are going to give way on this one. HomePlug's technology could also fall foul of European regulations which are more stringent than in the US.
But home networking is being given a boost by the development of new components. US home connectivity firm Intellon, a member of the HomePlug alliance, has developed a 14mbps powerline chipset, the INT5130, which it claims will remove the final hurdle in the development of high-speed power-line networking devices.
Looking at the wider perspective, according to figures from the Powerline Communications Forum, four billion people - almost two-thirds of the world's population - have access to electricity supply lines. Meanwhile there are just 788 million telephone connections worldwide.
If using these power lines to provide broadband access does prove viable, the global implications could be massive. As telephone services can also be provided on power lines, developing countries could use their existing electricity networks to deliver telephone services as well.
But Brown foresees one major problem - there are no major user groups pushing for the adoption of power-line technology.
"I don't see huge groups out there saying, 'I need it, where is it?'" he says.
Without a groundswell of enthusiasm for the new technology, the second coming of power-line technology could prove to be as much of a damp squib as the first.
German utilities get on the case
Utility companies in Germany are far more proactive than their counterparts in the UK, which explains why Germany is leading the way in the development of power-line technology.
German utility RWE has formed a joint venture, RWE Powerline, with Swiss technology firm Ascom. A spokesman for RWE Powerline says Ascom has solved the problem of radiating interference by sending an "overhead" - an additional signal - with the normal signal to correct faults. But RWE Powerline has no plans to expand into the UK at present.
Power-line trials in Germany have proved more successful than their predecessors in the UK but have tended to be on a smaller scale. Power Plus Communications (PPC) - a joint venture between German utility MVV and Main.net - has already completed a trial involving 200 households. And the company claimed a first with its launch of a commercial power-line service connecting 3,000 users in Mannheim this summer. Main.net is also working on providing telephone access via the power line.
Mannheim is hardly an ordinary city - it has an extensive fibre-optic network so MVV only had to install inexpensive modems at outdoor grid substations and equip customers with small, indoor modems.
But Main.net is also looking to work with utilities in other European countries and in Brazil, and to enter the US market via its local joint venture, Powerline Technologies.
Another Germany utility - E.ON - is also looking into the potential of power-line technology. E.ON has partnered with Finnish telecoms operator Sonera.
A history of digital power lines