In recent years, smart grid covers the raise content of science and technology of power grid, improving energy utilization efficiency, improving the reliability of power supply,S promoting energy conservation and emissions reduction, and promoting new energy utilization such as content. It has become the mainstream direction of change and development in today"s world power system. In this background, the development of device status online monitoring and condition assessment are also putting forward higher request. Communication networks act as a bridge which connects all key areas in the smart grid frame. Its performance good or bad will directly affect the security and reliability of the whole system. This paper analyzes the problems and the development trend, which exist in the substation equipment condition monitoring system. That introduces the development status quo and the main content of the IEC 61850.That analyze and compare to the Ethernet network mode, Analyze and present several implement a full range of seamless communication scheme.