for communications, said Joseph Marsilii, president and CEO of Main.net.

A device called a concentration unit injects a radio frequency (RF) signal into the power grid and converts Ethernet data from the city's fiber-optic network into a format that can ride the RF signal. The system also works with other backbone technologies, such as T1 lines or wireless broadband.

As the RF signal travels down the electrical lines, it loses energy. To counter this loss, repeaters were installed at each transformer. To ensure signals reach their destinations, they are re-energized upon reaching the repeaters, which transmit an alarm to the utility if the transformer loses power, Marsilii said.

To send and receive data, the customer connects a power line modem -- about the size of a small paperback book -- to a computer, and plugs it into an electrical socket. The current powers the modem and delivers the RF signal, which the modem converts back into Ethernet.

If the modem is connected to a portable computer, the subscriber can go anywhere in the city, plug the computer into a wall socket and get on the Internet, Marsilii said.

Once the pilot proved the concept, Manassas installed equipment for a full deployment. In October 2003, Manassas awarded the service franchise to New York-based Prospect Street Broadband. Manassas Utilities installs and maintains equipment on the network, and Prospect Street installs modems for customers and handles billing, customer service, technical support, the backhaul to the Internet and Internet content.

"They're the provider," Todd said. "We're just providing access to our customers through the utility grid."

Residential customers pay $26.95 per month. Business customer rates range from $59.95 per month for service at 256 kb/s to $359.70 per month for 1,500 kb/s. At the residential level, the system is slightly slower than cable or DSL, but the average user doesn't notice the difference, Todd said.

Revenue Stream

Besides monitoring its distribution network at no net cost, the system gives Manassas Utilities an income stream. At the outset, the city gets 10 percent of Prospect Street's revenues. Its share will increase with penetration.

"The more successful they are, the more money we make," Todd said.

Because city-owned buildings already operate on the fiber network, Manassas isn't connecting power line modems to its own computers. As the city adds new traffic signals, however, it might use the power grid to connect them to its traffic control system, rather than running fiber to each intersection, Todd said.

Manassas Utilities is the first public power company to launch a BPL service, but will likely have company soon. Rochester Public Utilities in Minnesota has announced it will begin exploring the technology with Hiawatha Broadband Communications of Winona, Minn.

Main.net is working with several investor-owned utilities, including Georgia Power, Alabama Power and PPL Electric Utilities in Pennsylvania. It's also talking with about a dozen municipal utilities about conducting market trials, Marsilii said.

Competitors in the private sector have not complained about the city utility's new role in delivering Internet service, Todd said, noting that the city has good relationships with local telephone and cable companies, and the city is part of a growing region.

"Right now, there are enough customers and enough business for everybody," he said.

Merrill Douglas  |  Contributing Writer