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IBM Financing BPL Smart Boxes

A $2 million infusion from Big Blue will help broadband over power line technology expand in rural areas of the U.S.
Still struggling to find its place in rural areas, broadband over power line technology is getting a financial shot in the arm from IBM, which is helping to finance BPL provider International Broadband Electric Communications (IBEC) and chip supplier DS2.

Announced Tuesday by IBM and IBEC, the financial infusion will help IBEC build out its BPL technology in rural areas of the U.S, primarily in the South, East and Midwest. IBM Global Financing will provide financing for DS2, which manufactures BPL regenerating unit smart boxes. IBEC is installing the boxes in electric utility poles.

An IBM representative said the financing will be a revolving credit line that is designed to grow over time. It will start with a $2 million outlay and will be "significantly more" later.

BPL technology has struggled for years to gain traction, but has been thwarted by interference problems and high costs. However, a few months ago IBM decided to support the technology, noting that vast rural areas of the country are still saddled with slow dial-up service. Leading BPL provider IBEC has also benefited from funding provided by the U.S. Department of Agriculture Rural Utilities Service (USDA RUS) and the American Recovery and Reinvestment Act (ARRA.) IBEC noted that the federal government's economic stimulus measures have earmarked $2.5 billion for the Agriculture Department to expand broadband service in rural America.

"We recognize that all Americans, including those in rural America, want and need this service," said Scott E Lee, IBEC CEO, in a statement. "IBM Global Financing's financing helps ensure they will have it sooner and more economically than would be possible without their participation."

So far, however, BPL deployments have been slow and its common download speed of 256 Kbps won't raise any eyebrows in urban areas. However, 256 Kbps represents a huge improvement over the 56 Kbps speeds that are common in most rural areas. And, IBEC has pointed out that the speeds will grow over time.

DS2, based in Spain with U.S. offices in San Diego, provides a wide variety of components for use with BPL technologies. Jorge Blasco, DS2's president and CEO, hailed the financing role IBM Global Financing is playing in BPL and noted that "traditional banks are reluctant to play due to limited knowledge of the Smart Grid business and today's liquidity problems."

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