Sky Scheme

Karen Brown

With the lure of money to be made in broadband services, a squadron of companies are now turning an eye to the sky to provide an alternative to wired high-speed Internet access.

But that doesn't necessarily mean the sky is falling for terrestrial broadband providers including cable modem services. The satellite services may initially be able to reach more homes, but the enormous cost and delay for most to enter the market have some experts wondering if they will ever get off the launch pad.

Internet satellite systems have generally fallen into two camps: high-orbit geostationary (GEO) satellites that cover large geographic areas with fewer birds, and low-earth orbit (LEO) constellations with many more satellites, each covering a smaller geographic area.

So far, four services are leading the pack: geostationary competitors Hughes Network System's DirecPC and a proposed sister service dubbed Spaceway, and Astrolink, a project headed up by Lockheed Martin; and LEOs Skybridge LP, a project backed by Paris-based telecommunications conglomerate Alcatel, and Teledesic LLC, a joint venture by a group of telecom heavy hitters, including Microsoft Corp. chief Bill Gates and telecommunications mogul Craig McCaw.

Geostationary rivals Of the four, the only one up and running is Hughes Network System's DirecPC Turbo Internet, based on a system of geostationary Kuband satellites. The fact the service has been up and running for some time gives Hughes the market advantage, according to Paul Gaske, SVP-broadcast products for HNS.

"There are other people who are doing satellite fleets, but they are going to have to start from scratch," he said. "I think they're going to be in trouble because you have to be in the market now."

With satellites circling 23,000 miles above the Earth, the DirecPC's Turbo Internet provides transmission rates at 400 Kbps downstream. Upstream traffic from the user to the Internet must be handled by a separate, traditional dial-up ISP service.

Users pay about $299 for a dish, but that is often accompanied by a $100 rebate, Gaske said. Cost of installation runs about $200, and packages including dial-up ISP for return traffic start at $19 per month without ISP for 25 hours online.

Plans are underway for a second Hughes network using higher-power Kaband satellites. The system will deliver two-way Internet service at about 25 Mbps downstream and a slower, as-yet-undefined, upstream speed. Dubbed "Spaceway"' the network will begin with two active satellites and one backup launched possibly as early as 2002 for about $1.5 billion.

The Spaceway network will cover only North America, but Gaske said plans are to find international partners and launch satellite groups to cover the rest of the world in 2003-2004.

And the $1.5 billion price tag is not particularly troublesome, Gaske indicates. The company has not issued revenue projections, but he said the investment "does pay back."

Astrolink's quartet Spaceway's prime GEO competitor is Astrolink, a proposed quartet of satellites aimed at providing global broadband services. The first of the four satellites is scheduled for a 2002 launch, and plans are to debut the service some time in 2003.

A joint venture between Lockheed Martin Global Telecommunications, Liberty Media and Italian telecommunications companies Telespazio and TRW, the system is estimated to cost about $3.6 billion. So far, the partners have raised $1.325 billion, which is more than 92% of the equity needed for its business plan, according to company officials.

Astrolink CEO Celso Asavedo said that financial backing is "substantial confirmation, not only of Astrolink, but also broadband satellite service."

In contrast to Spaceway, Astrolink will be a global service from day one, he said. Customers will need to buy a dish ranging from 60 centimeters to 1.8 meters wide, priced at $1,000 to $8,000. Fees will be based on usage, and will be set as the service begins. But they will be competitive with terrestrial broadband providers, according to the company.

True, by the time Astrolink comes online other terrestrial services will probably be well established, but Asavedo believes "in 2003 we will still be at the beginning of the broadband age."

"It would be fantastic if we could offer service now," he said. "But having said that there is no other competitor out there that is building a global infrastructure, so as every day goes by we are that much ahead of the others."

Astrolink will first target business, primarily multinational corporations and small and medium-sized ventures. The company plans to open offices in Asia, the Middle East, Latin America and North America.

"Broadband is a global business - it is not just a national or regional business," he said. "Companies increasingly need to connect their sites from, say, Latin America to Asia and they are looking for this."

Low-earth orbits Meanwhile, low-earth orbit (LEO) satellite schemes favored for voice service and messaging are now being eyed for broadband Internet and data service. They boast potentially higher transmission speeds, but because each satellite must be focused on a smaller geographic area, some question whether the enormous cost to launch such a fleet make them practical or operational.

Alcatel-backed Skybridge, along with industry partners including Loral Space and Communication, Mitsubishi Electric Corp. and EMS Technologies, proposes an 80-satellite Web orbiting 913 miles above the Earth at an estimated cost of about $4 billion. Service, which may begin in 2001 or 2002, may include video telephony, distance learning, remote Local Area Networks (LANs) and Internet access, according to the company's Web site.

Residential users will pay about $700 for a terminal, but there is no information as yet on monthly service fees.

Attempts to contact Sky-bridge for further information were unsuccessful.

Teledesic's game Fellow LEO Teledesic is scheduled to debut in 2004 with a web of 288 or more satellites supporting transmission speeds of 64 Mbps downstream and 2 Mbps upstream. The original plan called for 288 satellites, but, pending a final review at Motorola, "that number could well change upward," according to company spokesman David Bowermaster.

Estimates are the Teledesic network will cost $10 billion.

Although it is too early to set price packages, Bowermaster did say the service would primarily target multinational corporations, business consortiums and universities rather than residential Internet surfers.

"It is likely the price points won't make it a consumer service," he said. "(But) We expect, like a lot of technology, it will begin in the business market and kind of trickle down to the consumer market."