Possible Google Satellite Broadband Service Seen Appealing to FCC
An effort by Google to enter the satellite broadband business would likely be attractive to the FCC, some satellite industry professionals said in interviews. It will involve a fleet of 180 satellites that will supply regions across the globe that can’t be reached with terrestrial infrastructure, the Wall Street Journal reported Monday (http://on.wsj.com/1tAR0NU). If Google plans to become a satellite operator, one of the biggest hurdles will probably be ensuring that it won’t interfere with existing satellite services, the satellite industry professionals said. Google had no comment.
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Google has the resources to help make it happen, said a satellite industry attorney. But “you would have thought Microsoft at the time would have had the resources to make Teledesic happen and that didn’t happen,” he said, referring to the company that failed to launch a satellite constellation for Internet services. “I see the FCC as still being receptive to these types of efforts,” he said. There is room for a new entrant in the satellite frequency space, but there will be some challenges to achieve that, he said. Google will have to sign landing rights agreements for other countries, he said. “It’s a big task to set that up.” The transaction costs are steep, too, he added.
Today’s technology landscape gives a new entrant a better chance at succeeding, said Tim Farrar, an independent mobile satellite services analyst. It’s practical to build this for much less than the $10 billion that Teledesic proposed, he said. “The main issue is cost in terms of how small and how cheap you can make the satellites.” It also requires terminals that are practical, costing hundreds of dollars rather than thousands, he said.
Google will need to make sure it’s a sound business, said Roger Rusch, president of TelAstra, a satellite investment firm. There will be limited appeal for expensive user terminals, which was the problem that Teledesic ran into, he said. A tough challenge will be the coordination issue, he said. New entrants will have to demonstrate they won’t cause interference to other fixed satellite service satellites operating in the same band, he said. The FCC will probably seek comment, “which will result in a need for discussion between Google and other operators,” like Intelsat and Eutelsat, he said. If they reach an agreement, then the FCC will proceed, he said. “If the existing operators are not convinced, they can slow roll that process."
It will be hard to find frequencies that aren’t already taken, said the attorney. It also can be difficult to agree with power limitations and comply with the two-degree spacing to accommodate a lot of satellites that cover wide areas, he said.
The business plan is challenging but it could succeed without fully operating, Farrar said. Google doesn’t need to make a profit by offering service “if they can benefit from the advertising revenues of having more people online around the world,” he said. If the investment results in stimulating telecom operators from around the world to invest more than they would have in fixed infrastructure, then Google “may never need to actually launch and operate the service if in a few years’ time the incumbent telecom operators deployed enough terrestrial infrastructure that this wouldn’t be necessary,” he said.