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Google Buys Stake in Power-Line Internet Company

July 11, 2005

• IBM Promises Broadband for Rural America • Dallas Area to Get Power-Line Internet • Up the Broadband Creek Without a Signal • Google Buys Stake in Power-Line Internet Company • FCC OKs Internet Service Over Power Lines • Earthlink Will Offer BPL Internet Service in New York

Google is among major investors boosting the power behind a company that provides high-speed Internet access over electrical power lines. Google, the Hearst Corp. and Goldman Sachs have invested about $100 million in Current Communications Group.

Current, of Germantown, Maryland, said it would use the financing to accelerate its deployment of voice, video and data services in domestic and global markets. Current's service is available primarily in Cincinnati, Ohio, through a partnership with Cinergy Corp. It has smaller deployments in Maryland and Hawaii.

The financing also included additional investments from two of Current's existing investors, EnerTech Capital and Current's principal stakeholder, Liberty Associated Partners, LP, an investment partnership between Liberty Media Corporation and the Berkman Family.

"These investments provide us with both capital and operating assistance as we continue to roll out Broadband-over-Power Line (BPL) services to provide voice, video and data services," said William Berkman, Chairman of Current Communications Group.

"With roughly two-thirds of the nation still without broadband and many utilities looking for means to upgrade their distribution networks, the acceleration of Current's build-out is a clear win-win for consumers."

BPL technology enables the delivery of high-speed, two-way broadband through electrical outlets in homes and offices. It needs no special equipment in the home or office and transforms existing electrical wiring into a secure broadband network.

"Clearly the technology is ready to be pushed into new markets and we are spending a great deal of our time trying to do that," said Scott Bruce, managing director of Current and its major backer, Liberty Associated Partners. "It's already commercial and ready for prime time."

Internet access over power lines is seen as a way to deliver broadband service to rural areas where telephone and cable lines do not reach, or where various forms of wireless access are too expensive or not yet in place.

There is a standards body, the HomePlug Powerline Alliance, with specifications for data transfer within the home and from external sources to the home over electrical lines. It counts Sony Corp. and Comcast Corp. among its members.

The technology has not gained significant traction yet among consumers, though, as it is not widely offered. Other technologies like the wireless WiMax standard have received more attention as a way to get the Internet to distant places. But Bruce said Google's investment in Germantown, Maryland-based Current fit right in with the Internet search giant's philosophy of spreading Internet access.

"Our attraction for having a relationship with Google is sort of obvious. They're interested in the proliferation of broadband generally," he said.

Google said in a statement it was "very excited to have a relationship with Current Communications Group to help promote better access to the Internet." The company already has a number of deals with broadband providers for various content and search services, Comcast among them.

A top Hearst executive said the investment fit in with the media company's distribution strategy.

"We have an interest in delivering our content through the widest possible pipes," said Ken Bronfin, president of interactive media for Hearst. "The idea of creating another delivery mechanism to the home, especially in underserved areas, is attractive."

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