Satellite Spectrum is Beachfront Property

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Satellite Spectrum is Beachfront Property

Satellite sprectrum for broadband is a polarizing topic. HughesNet, WIldBlue (ViaSat), Skyway USA, StarBand and others have launched but can't hit scale. Between rain fade and line of sight issues, there is the perception that it is not as dependable as terrestrial modes of transit. But then, not every parcel of land in America has access to terrestrial broadband.

There are latency issues with the service (due to the physical distance the packets have to travel to the satellite and back to Earth), as well as bandwidth constriction and bandwidth caps.

Echostar-9 is being used by StarBand for service; Echostar was an investor in StarBand. Echostar provides satellite service to DISH Network, which spun off from Echostar in 2008. Echostar operates 14 satellites, with DBS licensing from the FCC.

WildBlue runs on Telesat Anik F2 satellite and was acquired by ViaSat in 2009.

Along comes Lightsquared, an upstart bankrolled by Harbinger Capital Partners, which announced it is building a new nationwide LTE network dubbed "Lightsquared" using spectrum owned SkyTerra. "Harbinger acquired SkyTerra and took it private in March, with plans to use the satellites, coupled with 36,000 earth-bound stations across the U.S. to set up a next-generation wireless network covering the entire U.S. population," according to the Washington Business Journal. Where did this spectrum come from? Well, SkyTerra used to have rights to spectrum for satellite telephony. Then it received permission from the Bush FCC to use that same spectrum for cellular telephony. Hence, the launch of LightSquared as the next 4G-LTE nationwide whoilesale cellco, which launched its first satellite to orbit this week. [Details are here].

Remember that Clearwire has 100 MHz of spectrum nationwide and has burned through close to $5B already. Plus let's not forget that VZW and ATT spend $7B and $5B respectively on CAPEX annually on their network. It isn't clear if Clearwire will survive. So what makes Harbinger think he can build out a 4G-LTE network from scratch? It costs about $400M to launch a satellite into orbit. That's not groound stations or anything. That's one single satellite. (The second one goes up in 2012 for another $400M approximately).

Apparently, investors also forget that T-Mobile is sitting on AWS and 700 MHz spectrum and is an also-ran at 4th place with 33M subs. 33M and it is in 4th place and struggling. Speaking of struggling, Sprint owned much of the spectrum that Clearwire has and still couldn't roll out the 4G network amid its own corporate psychosis. So what's a bunch of upstarts with less than 2M subs to do?

On that note let's not forget about Google's dream for the Third World called O3b.

O3b plans to launch medium earth orbit satellite service for the "other 3 billion" people who do not have broadband."O3b is financially backed by SES World Skies, Google, HSBC Principal Investments, Liberty Global, Allen and Company and Northbridge Venture Partners. By mid 2012 O3b plans to launch a constellation of 8 satellites into orbit to provide low latency Internet services to billions of users in remote areas of the world," according to Wikipedia.

Finally, we have HughesNet launching a high capacity satellite that will make consumers re-think about satellite broadband. According to a press release, "Hughes Network Systems, LLC successfully demonstrated 16 Mbps of TCP throughput and over 20 Mbps of UDP streaming throughput to a single HN9400 Ka-/Ku-band broadband satellite terminal. This allowed the terminal to support Web browsing, streaming video, voice, and video conferencing applications simultaneously. The demonstrations were conducted in Australia using broadband satellite capacity provided by IPSTAR and SES World Skies." Supposedly, this is a game changer. DSL Reports thinks it's just smoke. People forget that they are real, physical limits on spectrum and bandwidth. X amount of spectrum in the Ka or Ku range can only deliver a finite amount of bandwidth through the satellite - no matter the compression algorithm - there is a finite amount of bandwidth available. Plus that satellite feeds all subscribers at once. There are computing limits on that on top of the latency and weather issues.

Where Hughes is making a change is in the launch of its M2M service that will likely look for some revenue streams in the Smart Grid sector.

And think about this: all that spectrum being used - including TV and radio signals - at one time was public domain, sold away to private corporations for one time payments. If we really wanted to pull ourselves out of national debt, that spectrum would be taxed or in a revenue share model.

Also, by the new FCC definition of broadband (4MB x 1MB) most of the satellite and other wireless high-speed Internet Access is not broadband. Oops!

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