Smart Grid Synthesis of Industries Prompts New Telecom Lobbying
They're new opportunities as smart grid technology pairs telcos with energy companies, but there are also emerging fault lines and energy companies might well become the next big players in telco lobbying, executives said. “Electric utilities are the sleeping giants here,” e-Copernicus principal and former Rural Utilities Service administrator Chris McLean said.
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Power companies like Xcel Energy, Duke Energy and American Electric Power have already spent heavily on telecommunications lobbying in the last few years, Senate lobbying disclosure forms show. At the forefront of the power companies’ minds are worries over cybersecurity and reliability, including fears that they might be required to use commercial networks for smart grid, said Brett Kilbourne, director of regulatory services at the Utilities Telecom Council. “Whereas commercial carriers are real good in terms of coverage and capacity, they're not real good in terms of latency, in terms of reliability, in terms of battery backup,” he said. “Those are all mission-critical.” Many utility companies are worried that telcos will use federal regulators or legislators to force telco services on power companies, he said. “It’s only a conflict if the carriers want to make it into one,” Kilbourne said. “We're saying, yes, there is a role for the carriers. But it’s not a silver bullet."
Lobbying on smart grid will be on a grand scale, said telecom lawyer Paul Besozzi of Patton Boggs. “We're just kind of at the start of this process and I expect you're going to have a number of federal agencies involved in rolling this out,” he said. It’s not just the agencies, either,McLean said. “It affects wireless, wireline. I mean, all the different flavors could be impacted by this.”
Former FCC Chairman Reed Hundt now leads the Coalition for the Green Bank, a consortium of “clean” energy companies. Regardless of what happens in November, the next Congress will pass legislation that will encourage investment in technologies like smart grid, he told us. “The new battle will be between system integrators and the utilities,” he said. “Some utilities are going to pour money into Eschelon and they're going to have partnerships with Silver Spring Networks. And on the other side, Johnson Controls and Cisco are going to be investing as systems integrators."
Despite the fault lines, many industry leaders are sanguine about smart grid. “I think you see the utility sector moving in from one direction, the consumer electronics types are coming in from another and telecom going out the other direction,” said communications lawyer Gerry Waldron of Covington & Burling. The process has already started on many fronts. Tropos Networks, for instance, has invested heavily to create Gridcom Ecosystems to capitalize on smart grid opportunities, Patton Boggs telco lawyer Nick Allard said.
This summer, the Department of Energy published a request for information on the telecommunications needs for Smart Grid, department General Counsel Scott Harris told us. “We had so many comments, actually, that we extended the reply comment deadline,” he said. The DOE’s report on those comments will be out this week.
On Thursday, UTC published a report, funded by Verizon, on the telecom needs of power companies. The five key areas were capacity, convergence, latency, security and reliability, Kilbourne said. “We basically left it to the carriers to try to come up with ways to try and meet those,” he said. “We're not saying that they can or can’t, but we're saying that there’s an opportunity there if they think they can do it.” There opportunities are exciting but the challenges are daunting, Allard said. “There’s a lot of cross-fertilization,” he said. “You've got seasoned telecommunications players having to learn about energy. And you've got folks who've spent their whole lives in energy having to learn about communications."
Asked whether he thought the two sectors would have trouble learning new lobbying languages, Hundt laughed. “There’s a lot of people who for money will do the translation,” he said. “That’s going to be the easy part. There are some problems you can just throw money at and this is one of them.”