One of the great potential synergies in communications today is between the energy and telecommunications sectors. The great benefits - which all eventually filter down to consumers and the environment, at least in theory - are obvious: Utilities benefit because smart grids enable radically more efficient use of energy by more efficiently controlling distribution and usage. Carriers get a whole lot of business. Consumers save money and jobs are created.
There are a couple of issues that have characterized the evolution of smart grid and the telecommunications network. One - as is pointed out at GigaOM - is that utilities have been torn between building their own super-secure and reliable networks and using existing carriers. The other, which is not mentioned in the piece, is that the technology requirements surrounding smart grid are different than consumer and business communications networks. The messages focus on turning things on and off and reporting usage metrics are basic in many (but not all) cases. An LTE network is not needed to turn on a dish washer at 4 a.m. or report on the amount of electricity a home is using. Even 3G networks aren't necessarily needed.
Still, it is a great business for the carriers. The volumes are massive and, once a utility signs on, it tends to remain.
The industry's concerns about reliability and security are are well founded. GreenBiz posts a video of almost 30 minutes that tackles those topics. The accompanying story points out that there has been no repeat of the massive power outage of 2003 - but the number of smaller outages has doubled and annually costs $180 billion. Last week, IT Business Edge's Sue Marquette Poremba posted about nCircle's 2011 smart grid survey. Among the findings: 77 percent of smart grid respondents are worried about security.
It's unclear whether the public or private networks will win. Writes Fehrenbacher:
It seems like at this point a lot more utilities are planning to build private networks, and there are only a few networks I can think of that are connecting smart meters to cellular connections. One reason for that is carriers have tended to charge high prices and there's been an economic barrier to embedding cellular chips in smart meters.
Clearly, there is a lot of money at stake here. It seems likely that the real drama will be whether it is collected by carriers with whom the utilities would subscribe or the telecommunications vendors that would help the utilities build their networks. Whether one side or the other wins - or if the reality is that a mix of networks emerge - the real winners are the public and the environment.