Triple Play over Powerline - BCE Capital Looking Ahead

The Toronto Star reports that BCE Capital just made a $5 million investment in Florida-based Intellon Corp. Intellon is a leading provider of powerline integrated circuits, and a key driver behind the HomePlug standard, which supports things like home networking and BPL (broadband over powerline). Aside from BCE, there's another Canadian connection for this story running in the Star, which is Canada's largest daily - Intellon has a Toronto operation, as well as one in San Jose.

BCE was the lead investor in this funding round of $24.5 million, which actually was announced Aug. 24. Of note is the fact that the funding included money from the venture arms of both Motorola and Intel, as well as Goldman Sachs and others. When majors like this get behind powerline, you need to pay attention. Clearly, players across all links of the food chain are taking a closer look at powerline, given its ability to handle the high bandwidth needed to support Triple Play, along with it being an existing alternate broadband pipeline into virtually all homes.

BCE Capital is developing a nice IP portfolio - along with Intellon, they have positions in leading vendors such as Sylantro, NexTone and Bridgeport Networks. That said, I think they're also looking out a bit for Bell Canada on this one, as Bell is facing increasing pressure from the cablecos for the Triple Play, and potentially the Quad Play/Grand Slam. Videotron's aggressive VoIP rollout in Quebec is being closely followed, and this will only whet the appetite for Rogers to do the same in Ontario.

The appeal of powerline is simple, but compelling. Using powerline communications technology from a company such as Intellon, new services are truly plug and play. All the power outlets in these homes are essentially Triple Play enabled, and require no additional wiring or hookups. No truck roll is needed, and all the outlets can support the full range of services - voice, data, gaming, HDTV, VOD, etc. And perhaps most important is IPTV, where Bell is in advanced trials with Microsoft. This would put them on an even footing with cable, since all the cable outlets in the home will be capable of doing the same.