By Joan Van Tassel
Every company that's got cable in the ground is elbowing for a piece of the information services business. Last year, Arkansas Power & Light got permission from Entergy Corp., its parent company, to open up enough bandwidth from its fiber-optic network (used for internal communications) to offer broadband services to 50 test homes in a residential area of Little Rock. The one-year research project, which began in March, makes the company, according to AP&L, the first electric utility to bring information services and video entertainment to customers.
There are several reasons why AP&L (and other electric utilities around the country) stand a good chance of becoming successful players in the information-delivery game. Power companies have developed an extensive network of fiber-optic cable over the last decade. Entergy, which uses the same architecture as cable companies – a fiber-to-feeder system with coax drops to the home – has asked regulators for permission to use its existing network to wire another 10,000 homes after the test and 440,000 more in the future.
And when the time comes for laying more cable, power companies, like railroads, have an enormous advantage over telcos and cable companies through their legal right of way. For example, before Sprint was a long-distance provider, it was Southern Pacific Railroad's internal communications system. The company used its right of way to lay fiber-optic cable and turn excess bandwidth into profits exceeding those of the parent company.
If bandwidth and right of way aren't enough, the power companies can always depend on their pals in government. Representative Rick Boucher (D-Virginia) has introduced legislation to allow all electric utilities to compete in the cable TV and telephone industries. According to Boucher, "Competition is good for consumers, and competition clearly works. In the approximately 50 communities throughout the US that now have more than one provider of cable service, the rates tend to be 30 percent lower than the national average.... My measure will foster more competition and allow even more consumers to benefit from lower prices."
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