Encouraged by regulation, some jurisdictions across North America are starting to introduce some form of competitive metering policies that call for installing, testing and reading meters, along with data management, to be open to competitive providers, including the incumbent utilities. Thus, the possible erosion of the electricity utility's meter monopoly is one reason to act now.

The UK experience with deregulation of electricity sold to large clients provides an eerie parallel with the North American experience in long distance telephony. At the outset of competition, customer erosion in both cases started at about 1% per month. Over time, the rate of customer churn grows to about 2% - 3% per month; however, with win-back programmes the net rate of attrition declines. Thus, by the third year the old monopolies settled in at about 50% to 60% of market share.

If one applies this to the typical North American electricity utility's customer base, it would suggest that within six months of deregulation, their footprint would be markedly inferior to that of the local telephone company. Within 18 months, the cable company's footprint would start to show an edge. After three years, the electricity utility's footprint would show no discernible advantage over that of the water and gas companies.

The second reason for acting now is that energy deregulation is taking place against the backdrop of rapid changes in another industry, namely local telecommunications. Over the next few years the coaxial cable platform will be digitized, and high-speed data modems will be added to the cable and telephone networks. The bevy of new fixed-wireless entrants and the unbundling of the old monopolies all point toward an explosion in the number of local communication providers and a fragmentation in operating standards. Thus, with time, it becomes harder and more expensive to deploy a common provisioning platform.

The transition which many basic services are making from a regulated monopoly to a competitive market has one distressing result, namely that the process of trying new suppliers never stops. Consumers will continuously change suppliers in search of a better deal. Even in a mature competitive market this customer churn continues. For instance, 15 years after deregulation of the long distance telephony in the United States, the churn rate continues to exceed 3% per month. In more avant-garde areas, such as high-speed Internet service using digital subscriber line (DSL) or cable modems, the churn rate is closer to 5% per month.

Thus, to the insult of customer churn is added the injury of having to pay to recover equipment located at the former customer's premises. Either that, or write it off – or try in the first instance to lock in the customer with long-term contracts. The problem with the latter approach is that customers are reluctant to tie themselves up, particularly if the service in question is innovative. The service provider who offers the least restrictive conditions gains the greatest market share – of course at the risk, as we have seen with some of the largest DSL providers, of going bankrupt.

The issue goes beyond that of merely minimizing the cost of despatching technicians and lorries or, as North Americans refer to it, of ‘truck time'. Consider the case of automating the reading of electricity or gas meters.

An ideal system would allow the supplier to specify the reading intervals and the frequency of data gathering, or to alter these at will; to send and receive messages about outages, repair schedules or tariffs; to receive payments or distribute credits. Signals, particularly alarms, ought to have more than one transmission path. Some of the data should be encrypted so as to discourage tampering and fraud. Regulators and financial institutions would insist that consumers must be assured of privacy, on the one hand, and yet have access to their own data files on the other – thus the issue of authentication.

Technically, none of this is particularly difficult. Nevertheless, today only the most elementary automation of meter reading takes place, and then again only at commercial and industrial sites. Even though one or more meters can be found in 99% of all buildings (North America average), one observation is universal – the electricity utility has the most extensive footprint.