A new satellite Internet service launched earlier this year. I’ve been meaning to write about this and was prompted by seeing them in a booth at a rodeo I went to on Saturday. The service is provided by ViaSat under the brand name of Exede. They launched a new satellite, the ViaSat-1, last October for the sole purpose of selling rural broadband.

The broadband they are selling is a big step up over other previous satellite broadband, including earlier products offered by ViaSat. The basic broadband product offers up to 12 Mbps download and 3 Mbps upload. I went to the web and read reviews and people are saying that they are actually getting those speeds and in some cases even a little more. I would caution that like any broadband system, as they get more customers the satellite will get contention and the speeds will slow down.

The base product is priced at $50 per month and is a huge improvement over other satellite products. Exede’s older base product was also $50 but offered 512 kbps download and 128 kbps upload. For $79 you could get 1.5 Mbps download and 256k kbps upload.

But like everything there is a catch and that catch is data caps. The speeds are a great improvement because even web browsing at 512 kbps is nearly impossible. But the caps are a killer. For the $50 product the cap is 7 Gigabits of total download for the month. To put that into perspective, that is around 4 HD movies per month.

You can buy larger caps. For $80 per month you can get a 15 GB cap and for $130 per month you can get a 25 GB cap. If you hit the cap Exede doesn’t shut you down, but instead sets you to a very slow crawl for the rest of the month.

So obviously the satellite program is not going to be useful for anybody who wants to use the Internet for watching video or doing those kinds of things that most families use the Internet for. There can be no real gaming over a satellite connection, both due to the cap but also to the latency, since the signal bounces high above the earth and back. The latency also plays hell with voice over the Internet. You can do a mountain of emails and web surfing within that cap, but you have to always be cautious about downloading too much. Imagine if you worked from home and one of your kids watched too many videos and for the rest of the month you just crawled along at dial-up speeds.

For now this is only available on the east and west coasts and won’t be available in the middle of the country until they launch another satellite. Exede has a product in the Midwest that is $50 for up to 5 Mbps download and 1 Mbps upload, but reports are that most people there are not getting those speeds.

I am the first to say that this is a big step up in the rural areas. If I was on dial-up this would feel wonderful. But any home that gets this is not getting the same Internet that the rest of us get. One of my employees has four kids and they watch 4 – 5 hours per day of Internet video. We estimated that some months he is probably using a terabit of total download. His speeds are only half of this satellite service, but the unlimited download makes a huge difference in the way his family can use the Internet.

The scariest thing about this product is that I know that one of these days that some policy-head at the FCC is going to announce that the whole country has broadband and then they can wash their hands of the rural broadband gap. This is the fastest download speeds that anybody has brought to much of rural America. But anybody on this service is going to be so throttled by the data caps that they are not going to be able to use the Internet like the rest of us. So this is a good service, but it’s not broadband – it’s something else.