The public vs. private network debate rages on…

By John Horn, National Director, M2M, T-Mobile USA

With cost estimates upwards of $165 billion over two decades, the primary barriers to the widespread deployment of the smart grid are cost, technology and return on investment. While additional considerations, such as geographic, security and functional needs, play a role, most often it boils down to a single question: “Build or buy?”

“The smart grid revolution promises to deliver more secure, reliable, efficient, and cost-effective power generation and delivery.”
-John Horn

The Main Thrusts

Some claim that many utility companies already function as their own telecommunications providers, running large-scale wireless, wireline and fiber optic networks across their operations. The argument then follows that these companies will likely build a private network for the smart grid once they are able to purchase as much as 30 MHz of spectrum, the amount many believe is necessary to make the smart grid possible.

However, private networks face significant challenges -- from multi-decade amortization and an inability to keep up with the innovations being made in the telecommunications industry to bandwidth and scalability for data needs and smart-grid applications not yet imagined. Further, though advocates wish to maintain complete control over the security of this infrastructure, private networks are more vulnerable to security breaches or other threats than the more secure commercially managed networks.

Though private network advocates suggest they need pervasive fixed coverage (at least 1 Mbps), pervasive mobile coverage (at least 100 kbps) and selective broadband coverage (10 Mbps) for all utility assets and customer locations, existing wireless coverage from most public networks extends to 95 percent of customer locations and is growing. Public network proponents suggest it would be more cost effective to integrate a 5 percent solution with a 95 percent asset base than build 100 percent new to meet a 5 percent solution.

When private network supporters suggest that they need communications service availability at least 99.99 percent and 99.999 percent where financially feasible, public network advocates state that AMI, demand response and distributed energy generation are fault-tolerant applications and require only modest throughput, allowing them to be readily accommodated by existing public networks. Therefore, the cost of availability for these applications is hard to justify. Public carriers routinely design high-reliability networks for critical applications, such as sub-station automation, where the cost of additional redundancy can be justified.

What about communications latency? Private network advocates say they need communications latency of less than 800 ms between utility communications centers and major assets.  Public network defenders say that 2G wireless meets requirement with 600-800 ms of latency.

 Public Networks Approach 4G Speeds

All parties agree that today's smart grid bandwidth needs are relatively modest, but tomorrow, those requirements are likely to grow. However, it is the public network that is best positioned to provide the flexibility and scalability to adjust easily to accommodate these changing and growing needs.

Industry pundits argue that the adoption of public wireless will need broader availability and deployment of 4G mobile broadband bandwidth and speeds. Today, 4G speeds do exist, making accelerated adoption possible. T-Mobile's super-fast HSPA+ network, which is undergoing aggressive network expansion, now offers 4G speeds (theoretical peak throughput speeds of 21Mbps) to more people than any other public wireless network in the U.S. In fact, T-Mobile is on track to deliver HSPA+ speeds in 100 major metro areas, covering more than 200 million people by the end of 2010. Even more exciting are the company's plans to offer 42Mbps theoretical throughput speeds in 2011. 

The Role of M2M Technology

Machine-to-machine (M2M) technology is used everywhere today - from water meters and security systems to asset tracking, point-of-sale and mobile healthcare. The Department of Energy says that M2M technology will help monitor the grid, increasing its reliability, efficiency and security. Utility companies can get instant feedback on problems with the grid, like transformer outages.

Many also believe that M2M technology will also help utilities shift between energy sources, allowing them to integrate renewable energy like wind and solar into electricity generated from coal-burning power plants. In addition, the technology can help consumers save money by adjusting thermostats and appliances up or down in relation to the variable cost of power.

Take as example an M2M-based advanced metering infrastructure consisting of a family of integrated electronic electricity meters accessed via a Web-based network operating system over an IP networking infrastructure. More than a simple AMI system focused on billing-related services, this system can enable the backbone of the smart grid, giving utility companies access to information about the status, operation and general health of the grid, which further allows them to reduce costs while increasing service quality.

Unlike systems with a dedicated, proprietary radio per metering point, multiple meters can share a single IP connection among all the meters on a given low-voltage transformer, driving down the per-point connection cost and eliminating the need for the utility to build a maintain a dedicated private wireless network for their meters. When used on a public network, one point per transformer could be equipped with an embedded SIM card, like those from T-Mobile USA, eliminating the need for the utility to build and maintain a private network for backhaul communications.

Further, by bringing the wide area network (WAN) connection point down to the neighborhood transformer, this architecture allows a utility to pinpoint problems in its network at a very precise location, eliminating cost and time affiliated with outage detection and improving customer service.

Shaking It Out

The smart grid promises to deliver more secure, reliable, efficient and cost-effective power generation and delivery. There is no debate about the value of these objectives.

However, the price tag associated with this goal is hefty enough for many to pause and consider cost, technology and return on investment. Traditional build/buy analysis favors the public network with the limited capital investment for utility companies, rapid time to market, as well as reliability, resiliency, interoperability and scalability. Many existing public networks can meet the needs of the smart grid without requiring additional funds to build new single-purpose networks.

Further, with the addition of innovative M2M technologies and systems, utilities will have access to a wealth of information about the status, operation and health of the grid that enables them to reduce operating costs while increasing service quality.

The embedded ecosystem is new and exciting. Our participation and success will be dependent on the simplicity of our business practices, success measurement and billing and the flexibility we offer our customers.