Is the ‘Last Mile’ Getting Longer for Satellite Broadband?

There are 7 ways to move data from the fiber infrastructure into a house or office, said Frost & Sullivan analyst Max Engle, citing DSL, cable modem, fiber, BPL/PLC, WiFi, Wimax and cellular trials. All are faster than satellite, he said. And with all of these terrestrial options, “there doesn’t seem to me like there’s a great need for satellite broadband there,” Engle said: “There’s just an awful lot of stuff there that’s going to provide a lot more now than satellite is providing.” And looking to the future, Engle said the last mile will only get longer for satellite, as the next terrestrial technologies deliver speeds jump to 100 Mbps, then to 500 Mbps, and then 2.4 Gbps. Said Engle: “This is coming. This is real. All of these technologies are pointing in the direction of the sorts of download speeds and bandwidths and I don’t see how a satellite downlink speed will match.”

WildBlue begins its rollout of broadband via satellite this month, starting in rural areas of Colo., beyond terrestrial’s reach -- but winning and holding even the rural market will be tough, Engle said. “When I see a number like 20 million people in the U.S. unserved by broadband, it looks to me more like 10 million now and falling fast,” he said. Part of WildBlue’s business strategy will have to be snaring enough customers to prevent terrestrial competitors from coming in and taking them, because people will jump to faster download speeds “like a hot potato” once they become available, Engle said: “Satellite needs to compete where the terrestrial broadband network is weak enough that they can prevent major trumps -- if you want to hold on to market share, you have to grab some market share you can hold.”

Some say satellite broadband “is either too late or too early” -- and either way there’s no way to address the market, said consultant Gregg Daffner. CapRock, a satellite broadband service provider, “sort of sees the same thing, which is why we provide broadband to no-man’s- land,” said Randy Neck, dir.-product mktg. & management. He said CapRock has been successful extending satellite broadband communications to businesses, like oil and maritime, that work extremely harsh and remote environments like the sea floor. But Neck cited technical difficulties with the performance of Windows applications over satellite as a major technical hurdle. “Customers push their businesses and facilities into parts of the world where there is limited infrastructure, but the tools that they're used to using are regular, like Microsoft Office,” said Neck: “Except these tools were designed with local networks in mind where have bandwidth to burn and latency isn’t a problem… The behavior of these applications begin to change over a wide area network, and certainly over satellite,” he said. These technical protocol issues are being addressed by vendors, Neck said.

Engle said he sees a good future for satellite broadband in supporting “islands of connectivity” in 3rd World countries or rural America, rather than in the last mile to U.S. homes and offices. WildBlue isn’t affordable in Africa and it might be supplanted by terrestrial service in the rural U.S., but a satellite model based on local Internet distribution to 3rd World Internet cafes or from rural Internet clusters in the U.S. back to the fiber backbone could work, he said. “It’s going to be easy to set up small Internet shops in the remote U.S. using alternatives to satellite, but you'll need to get all that information back to the backbone of the Internet -- to fiber -- but there isn’t a lot of fiber in Wyoming,” said Engle: “Satellite is well placed to provide service that will support terrestrial broadband, but if you're thinking about replacing terrestrial broadband or heading it off at the pass, it’s not going to happen. There is already too much available.”

Loral Skynet CIO Brian Skimmons, also vp-gen. mgr., Global IP/SkyReach at Skynet, said satellite broadband may be supplanted in parts of the world, but it will survive in some form and it will be driven by applications. “Our view is there is a need and there is a market now and in the future,” Skimmons said: “What the futurists call the ‘disruptive technologies’ just move other technologies over into more level-set niche markets, and what you'll see in the future is IP services via sat falling into that category,” Skimmons said. The key driver of satellite broadband will be what the customer needs, and it will be addressed by a converged service, Skimmons said, citing SkyReach’s support of the Iraqi national elections. SkyReach deployed an IP network consisting of 37 cites in 60 days for the Jan. elections. Skimmons said there are now over 60 sites, with plans to grow to over 100.