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Electric Utilities and Metropolitan Broadband - a Relatively Untested Opportunity, in Critical Need of Attention

As further evidence that there is life after EarthLink (please), I point my readers to an important use of wireless broadband networks, beyond providing access to the Internet and the World Wide Web. A Metropolitan Area Network (MAN - a few blocks to a whole city) is midway in size between a Local Area Network (LAN - office, residence or coffee shop) and a Wide Area Network (WAN - cellular network). A MAN enables communication over that wide area, and one of the biggest challenges cities have is gaining access to data from across a wide area. Cities that are willing to change their business processes and move to a more automated platform can gain incredible efficiencies, but undergoing such change is no walk in the park, if you will pardon the pun.

In the Analog World, cities sent people out in the field to find out what was happening. In the Digital World, cities can use new tools to gather information remotely or make their field employees more effective and efficient. Digital advances allow cities to manage the distributed infrastructures under their purview more cheaply and far more effectively and to increase public safety - two of their primary objectives (crime and potholes).

Think about it. A city covers a wide area and city staff are responsible for maintaining a complex system of infrastructure, including some combination of the following:

Electric Power Lines and Meters
Water Pipes and Meters
Gas Pipes and Meters
Parking Meters
Traffic Lights
Video Surveillance Cameras (new)
Streets, Roads, and Bridges
Parks
Fire Department vehicles and stations
Police Department vehicles and stations

For more background on how a wireless network changes the game, see this excellent article Cities Get Smart with Wireless Sensor Networking. With a better understanding of the relationship between wireless networks, sensor networks, and distributed infrastructure comes a realization that there is far more value in a municipal wireless network than in getting out to a website or checking an email. The issue of infrastructure maintenance and disaster recovery is getting more attention now thanks to the dramatic and tragic collapse of levies in New Orleans and more recently, the I-35 bridge in Minneapolis.

Cities that own an electric utility are in a great position to take advantage of new broadband communications technologies, as are larger electric utilities. They produce significant revenue, they manage a critical distributed infrastructure, and they have a critical task to manage in the event of an outage. I offer up also a white paper I worked on with Craig Settles (Successful.com) this spring, showing how cities are putting together wireless broadband projects with automated metering infrastructure (AMI) projects. After some discussion this spring, we managed to get two sponsors lined up, Nortel (Wi Fi) and InfoIntellect (AMI vendor - web site currently under construction).

I had called Craig this Spring because my client now, my prospect then, had two RFPs out on the street, one for a wireless project, and another for an AMI project. The City of San Marcos, Texas, I'm happy to say, chose MetroNetIQ in their infinite wisdom to help them with their wireless project. They currently have two simultaneous projects underway. Besides the wireless network, over which they will run municipal applications (we expect responses to the RFP on September 27), they've hired a company called UtiliWorks to execute on a plan to bring in Automated Meter Infrastructure (AMI) for their city-owned water and electric utilities.

Note for later - the relationship between these two projects, and between MetroNetIQ and UtiliWorks, is a fascinating new area to explore as we look to fill the gap left by EarthLink - this is a new way to bring in Wireless and get it funded.

City leaders anticipate that the two projects, Wi Fi and AMI, have great potential to work together, and that, I believe, makes both of these projects unique and attractive. This spring, I was updating myself on the connection between AMI and Wi Fi when I called Craig, but really, I've been looking at this connection since early 2004. MetroNetIQ has a significant background in this area - just see these background documents I authored in 2005: Whitepaper on AMI, Whitepaper on Municipal Utilities, and Whitepaper on Outages.

When I called Craig, I was curious to find out if other cities were going down this path (besides Corpus Christi, which is perhaps the best-known AMI / Municipal Wi Fi Case Study). After all, AMR / AMI is often listed as an example by mesh equipment vendors and others as a wireless application that could benefit from a wireless network. Apparently these projects are still small in number, and while there is progress, it will be a while before we have more case studies to complement the very good information that Corpus Christi has provided.

Q. Why is this train of thought so potentially significant?
A. There are implications way beyond the Municipal Wireless Industry.

Few outside the electric industry really understand the precarious situation that our American domestic electric industry is in. While America's infrastructure crisis should get their attention, this article highlights in particular the perilous state of our nation's electricity grid: Is PG&E fiddling while the grid burns?.

BTW, I just watched a fascinating video - Enron, The Smartest Guys in the Room, which describes the California energy crisis, among other things. Fascinating, and revealing insight on what happens when power is cut off, intentionally in this case, with rolling black outs caused by Enron and others.

But back to our discussion on the Internet and Municipal Wireless. The Internet relies on the electricity grid to function. And there's the rub.

... massive power outages caused by snafus at PG&E, our local power company. This resulted in a transformer blowing up, and causing even more disruptions, especially at 365 Main, one of the large co-lo/data center facilities situated in the SOMA area of San Francisco. This resulted in massive outages at some of Web 2.0's brand name companies - Six Apart, Facebook, Technorati and Yelp - knocking their systems and web services out flat. Whatever the reasons behind the failure might be, yesterday was a rude reminder of how fragile our digital lives are.

The seemingly invincible web services (not to mention the notional wealth they signify) vanish within a blink of the eye. It was also a reminder, that all the hoopla around web services is just noise - for in the end the hardware, the plumbing, the pipes and more importantly, the power grid is the real show.

According to North American Electric Reliability Council (NERC) there has been a 50% decline in the capital expenditures by utilities over the last 15 years. The underground cables are crumbling. This report in Fresno Bee takes PG&E to task.

This is not just a problem with PG&E. Power grid across the country is aging. It is ironic because data centers/hosting business is one where US companies still dominate. The reliable data center/colo facilities have been a distinct advantage for US start-ups, especially the Web 2.0 start-ups. And yet we continue to bet our future on this creaky house of cards. That's like building a Taj Mahal on quick sand. The Internet's Weakest Link

And what's more, there are financing alternatives that arise when a critical application like AMI is tied to a Wireless Broadband network project. See also Funding Alternatives. We'll have to explore this further in another post.

Oh, and by the way, to drive this point home, this critical issue of infrastructure has ABSOLUTELY NOTHING TO DO WITH EARTHLINK, LARGE CITY DEPLOYMENTS, AND FREE WI FI.

Posted on August 31, 2007 at 09:52 PM

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