TransGrid has "no comment" on broadband network

Electricity carrier TransGrid refuses to comment on whether it will use its power lines network to provide Internet broadband services but industry rumours indicate the excess capacity is destined to be made available for commercial exploitation.

The telecommunications sector has been abuzz on the eve of the expected announcement by the NSW State-owned electricity company, who will be backed by investment house Macquarie Bank. TransGrid is remaining tight-lipped in the face of the rumours.

TransGrid provides electricity to numerous utilities and some direct customers across NSW. It is in the process of enabling its Electricity Transmission Network to carry communication signals along fibre optic cable that is embedded in the earth wire.

According to Ashok Manglick, acting manager corporate for TransGrid, the company fundamentally intends to use the fibre optic network internally to provide "protection and control" over its power network, using the high-bandwidth cable to send switching information between exchanges.

But it is the commercial possibility of the network that has the telco market in a stir. Potentially TransGrid could use its extensive fibre optic network to provide wholesale broadband Internet and telecommunications services throughout NSW, with links to Victoria and soon to Brisbane.

The commercialisation of existing electricity networks has only been made possible recently after the NSW State Government changed the Electricity Legislation Amendment last November.

"It's part of the Government's initiative to leverage state-owned infrastructure to provide better communications," claims Warrick Ponder, media advisor for the Minister of Information Technology Kim Yeadon.

Despite the Government's endorsement of the concept, Ponder denies any announcement is imminent.

"There could be a number of negotiations currently underway, but there is no big announcement [pending]," he said.

Geoff Johnson, research director at Gartner, claims that while a network such as TransGrid's could provide large bandwidth, it would be a "tough sell" in the industry.

"It's a carrier's carrier service," said Johnson. "You could write down the number of companies [carriers] that could afford this service on the back of an envelope."

"Electricity companies that provide these services survive on big bits of business," added Johnson.

The use of protection earth wires embedded with fibre optic as a broadband telco service is used in Europe and the UK and, according to Johnson, needs a large market to support the venture.

Meanwhile it is alleged TransGrid has been in discussions with Macquarie Bank for financial backing and management of the commercial offering.

However, a Macquarie Bank spokesperson said the investor wasn't "directly involved" in any potential commercial rollout of broadband services and declined to comment further.