Even if several high-profile companies have long pulled the plug on a technology that transmits data over power lines at high speeds, the European Union (EU) hopes its support of power line communications (PLC) will help overcome technical hurdles and lead to greater competition in the broadband market.

The EU's executive arm, the European Commission, is a key sponsor of the Open PLC European Research Alliance (OPERA), which is part of its "Broadband for All" program, said Michael Koch, a member of the PLC initiative and vice president of strategy and regulation at Powerplus Plus Communications. "Our work officially begins today," he said.

More than 35 European energy companies, telecommunication equipment manufacturers, consultancies and universities are meeting this week in Madrid to hammer out details of the four-year OPERA project, which the Commission is sponsoring to the tune of €9 million (US$11.2 million), according to Koch. The first phase, lasting two years, has a budget of €20 million; it aims to develop a uniform European PLC standard, he said.

"We currently have a number of proprietary systems in use around Europe, each with their strengths and weakness," Koch said. "For power line communications to become a viable business, standardization is essential."

PLC technology transmits data signals over electricity lines. While some of the early systems have delivered Internet access at speeds up to 2Mbit/s, others in the pipeline promise data rates of up to 10Mbit/s and more. The technology is designed to support other applications, such as telephony, automatic meter reading, security and home-appliance networking.

Although PLC competes head on with wire-based DSL (digital subscriber line) and wireless LAN technologies in the local loop, the Commission is particularly keen to harness the technology in order to extend broadband service in structurally weak and rural areas.

A few years ago, Germany emerged as a hotbed of PLC development. Several regional electricity companies entered the power line fray, including Eon in Düsseldorf, EnBW Energie Baden-Württemberg in Karlsruhe and MVV Energie in Mannheim.

Eon has since abandoned the PLC market, claiming the technology is too complicated and costly to deploy with little chance of seeing a return on investment any time soon.

Munich-based electronics giant Siemens had also hoped to be at the forefront of PLC technology. However, Siemens exited the market in 2001, citing regulatory delays and a lack of European standards.

In 1999, Nortel Networks pulled the plug on its PLC activities in the UK, claiming the technology would remain a niche product at best. Like Eon, it saw little chance of recouping the millions of dollars needed to develop reliable products and market the service.

That is exactly what OPERA members hope to change. "We are establishing committees that will be working closely with European and other international standardisation bodies." Koch said. "One of our primary goals is to move away from proprietary systems."

The list of OPERA members includes Ascom Systec, Main.net Communications Ltd. and the Mitsubishi Electric Information Technology Centre Europe BV.