Just when it appeared broadband-over-powerline (BPL) technology was going to die off, IBM and rural Internet service provider (ISP) International Broadband Electric Communications—with help from a $9.6-million cash infusion from IBM and $70 million in government loans—are deploying BPL networks for almost 200,000 rural customers served by seven electrical cooperatives in Alabama, Indiana, Michigan and Virginia.

The move comes months after two of BPL’s highest profile deployments died out and as many BPL vendors have begun focusing on smart electrical networks rather than consumer broadband delivery. The technology, which modifies radio signals to transmit voice and Internet data over electric utility power lines, was extremely hyped early this decade, when it was billed as a way for power companies to become the third alternative in the broadband market, competing against cable and DSL operators in urban areas.

But the technology has been slow to take off, as technical limitations and interference problems with ham radios and local emergency radios kept it from being adopted widespread. Moreover, power companies realized they just couldn’t compete with cable and high-speed telco offerings in urban areas.

BPL now has improved from a technical standpoint and, according to Ray Blair, advanced networking executive with IBM’s Global Technology Services. BPL has found its niche in the rural market, where access customers have no wireline broadband alternatives.

Another important niche has to do with the need for utilities to incorporate intelligent-grid capabilities, such as smart metering and energy-outage monitoring.

“The intelligent grid, by nature, is filled by a lot of devices that need to communicate with each other back to a centralized location, and that drives a lot of bandwidth—a lot more than what utilities can handle today,” Blair said.

I, for one, will be waiting to see how IBEC and IBM can make BPL a profitable technology. Last May, DirecTV and Current Communications sold a flagship BPL deployment in Dallas to the local utility after they couldn’t make a go of it. The utility is using the network for smart-grid monitoring only. In this case, the combination of using the technology as a broadband offering and for the electric cooperatives’ smart grids increases the chances of success.

Still, Blair concedes that the cost of such networks vary from situation to situation. BPL deployments typically cost half of wireless network deployments, but the ongoing costs might not be advantageous. “It’s more than just the cost of the network. Operational expenditure is the key piece to understand. In some cases, BPL looks good paper, but on the opex side, it might not be so good, and wireless might look better.”

So, the business case for BPL isn’t straightforward, and it appears companies looking to utilize the technology must do some significant vetting and perhaps look outside the box to find more ways to recoup their investments. According to Blair, that might include striking a deal with the local municipality to backhaul surveillance cameras or read water meters.