The second windin power line communications is largely attributable to the advances made by engineers at Intellon Corp., a small, fabless designer of advanced ICs based in Ocala, Fla. The main problem was noise. Power lines are a rough-and-tumble environment for data compared with coaxial cable and twisted-pair copper lines. They are subject to unpredictable sources of interference, such as the motors of appliances like vacuum cleaners and sewing machines.

Intellon largely solved the noise problems, and thus the reliability problems, of power line networking while making it cheaper to implement, more secure, and easier to use. So potent was the buzz about the company's groundbreaking INT5130 chip set—the first to offer a minimum throughput speed of 10 megabits per second (with the promise of scalability to even higher speeds), digital encryption, and compatibility with other home networking technologies—that leading home and business networking companies Netgear, Linksys, and SMC Networks all announced products based on Intellon technology to meet standards set by an industrial alliance called HomePlug.

(HomePlug originally was formed to standardize data networking over electrical wiring inside the premises but has since expanded its scope to include power line communications.)

Intellon's chip sets combine orthogonal frequency division modulation, dozens of carrier channels, and automatic channel switching. This design ensures that data packets using power lines as an on-ramp to the information highway can switch lanes when they encounter problems, such as varying impedances, narrowband interference, and impulse noise, that are inherent to that medium. The result: data suffers less loss.

Other important advances came from technology providers like Current Technologies and Andover, Mass.-based Amperion Inc. Current Technologies makes a device that serves as a direct link between an overhead medium-voltage line and the 220-volt line running to a house, so data packets can avoid the transformers that step down the voltage and would destroy the data [see photo, "Bridge"]. Amperion's Falcon 1000 repeater/extractor, when installed on medium-voltage transmission lines, limits attenuation by catching the data packets, repackaging them, and sending them out again. It can also route packets to low-voltage lines.

Optimism about the technology comes just as the United States and the European Union have declared that universal access to broadband Internet service is a high priority. Earlier this year, the European Commission launched an initiative aimed at driving standardization of power line communications (PLC). Called the Open PLC European Research Alliance (OPERA), it is set with funding of ¤20 million in its first two-year phase. "The goal is to standardize this technology in much the same way Europe collaborated to establish [a single] cellular phone standard," says Power Plus's Koch, who is also a member of OPERA's steering committee.

More than 35 European energy companies, telecommunications equipment manufacturers, consultancies, and universities have so far agreed to participate in OPERA—a boon to the European utilities that stuck with power line communications and already are offering limited commercial Internet service. These include Electricite de France SA, Endesa SA in Spain, MVV Energie AG in Germany, and the Scottish and Southern Energy Group in Scotland.