Communications and Broadband

By Marcus Torchia, IDC Energy Insights

The Federal Communications Commission (FCC) recently released the National Broadband Plan (NBP). Chapter 12, “Energy and the Environment,” addresses the NBP’s relevance, considerations and recommendations for smart grid. The FCC takes aim at network communications in the energy and utility (E&U) industry and the patchwork of technology and policies that support it. It asserts that network communications’ current state in the E&U industry acts as a drag on green technology adoption, energy independence and consumer energy service deployment and innovation.

I have few disagreements with the report’s findings and assertions; it makes many good points. For example, the report says that more than 3,000 U.S. electric utilities use various networks. It also comments on the private networks utilities traditionally build to support applications requiring high reliability. These systems have operated separately from commercial networks, often using privately-owned, proprietary narrowband solutions.

Data amounts moving across smart grid networks is modest today but is expected to grow significantly. Various parties have attempted to estimate bandwidth requirements and none expect existing narrowband communications to be sufficient the report says. For example, Sempra Energy has found it will require “pervasive mobile coverage of at least 100 kbps to all utility assets and customer locations.” Similarly, DTE Energy believes it will require connectivity of 200-500 kbps to support pole-mounted distribution devices. And, Southern California Edison says “the history of new technology deployments shows that performance and bandwidth needs were underestimated at early stages.”

The broadband community and other interests led the FCC to recommend at a high level that the country pursue three parallel paths: to support smart grid mission-critical applications with hardened existing commercial mobile networks, to share public safety mobile broadband network for mission-critical communications with utilities, and to empower utilities to construct and operate their own mission-critical broadband networks.

The plan is an FCC policy guideline for the next five to 10 years. In the end, however, the FCC’s impact on utilities will be limited, especially in the short term. It needs the Department of Energy’s (DOE) cooperation, and it does seem to have its ear.

The plan recommends that state public utility commissions require utilities to share consumer energy data by the end of 2011 (recommendation 12.7). Otherwise, it recommends that Congress legislate it so. It is unclear how this will impact E&U and the smart grid space. For vendors selling private networks, this should be notice that the competition from the service provider sector is ratcheting up and these mammoth organizations are serious about competing for utilities’ business. Utilities prefer private network solutions over public network service providers four-to-one for smart grid communication, so it will take some time for this FCC policy document and resulting repercussions to reverberate through the industry. The plan, however, is a warning for the network gear incumbents. They need to pay attention to what is going on with the FCC and DOE.

The network communications input in the smart grid equation is big. IDC Energy Insights recently found that 40 percent of utilities deploying a smart grid project do not have a network communications strategy. It’s a remarkably large number considering the critical role communications plays in smart grid. So this is an opportunity for new entrants and small share players to land more business. It is also a sign that the incumbent players have been unable to help utilities establish direction with regards to network communications.

Marcus Torchia is research manager, intelligent grid strategies at IDC Energy Insights.


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