For the last video interview in our series, Rich Tehrani (News - Alert) and I talked about the connection between broadband and smart grid. This is a broad topic, but these ideas are closely linked. The U.S. government has been driving smart grid activity via its stimulus funding initiatives, but is also strongly advocating broadband adoption via the FCC's (News - Alert) Broadband Plan.

I have written about both here on the portal, and these topics are particularly timely. Today, Duke Energy announced it will be receiving $204 million in stimulus funding from the DOE. This is a lot of funding for one utility to modernize their grid, but Duke has long been at the forefront of smart grid, and aside from improving their operations, these initiatives will create jobs. Everyone benefits from this, even consumers. As the above-cited article explains, Duke recently joined the board of the HomePlug Alliance, an important industry initiative to support HANs and bring smart home applications to life. Duke may be at the top end of the spectrum for the amount of funding and spending involved, but this is a great example of a utility that has the bigger picture in mind.

This brings us back to the video interview. Rich and I talked about how smart grid investment is more than just updating the plumbing. Everyone knows that the energy grid is aging and inefficient, but it's also very insular. Without a modern communications network, the grid is really only good at talking to itself, and with today's technology utilities simply cannot maintain the status quo. The push to accelerate broadband adoption has been coming from several fronts, and only recently has smart grid been one of these. We talked further about the benefits of broadband, not just for better communication inside the grid, but out to the home as well.

Making the connection between smart grid and broadband is important, as utilities may not be seeing the bigger picture. They have not been very customer-centric to date, and Rich pointed out that consumers have many reasons to adopt broadband, but only recently have they seen smart home as one of them. We talked about how this is driving demand on two levels. First, consumers want to save money on energy costs any way possible, and second, they want to be eco-friendly, so energy conservation is important to them. When utilities leverage broadband to update their infrastructure and communications capabilities, these benefits will be realized, which will be great validation for the government's vision for broadband adoption.

This may seem like a neat and tidy scenario, but Rich points out that major technology transitions like this are never totally smooth. We talked about the telecom experience and the early days of VoIP, which was fraught with many problems, and it often looked as if it would not survive. VoIP had its share of both detractors and champions, and today it is clearly here to stay. We see the same scenario for smart grid, and emphasized the importance of continued government support until smart grid technologies further mature. Smart grid is expensive to deploy, and already we are seeing consumer pushback where smart meters have led to higher energy bills. In our view this is really a growing pain, and by focusing on the bigger picture, the long term benefits will far outweigh the high prices we're paying in the short term.

While this may not reflect mainstream thinking, it's clear that utilities like Duke Energy (News - Alert) have the broader vision, and we can only hope that others follow suit. Time will tell, but come October, we expect that others will have done so and we see our Smart Grid Summit as the ideal forum for them to share their vision and show the way for the rest.