Tag: SpaceX

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The Industry

Who’s Chasing RDOF Grants?

There is a veritable Who’s Who of big companies that have registered for the upcoming RDOF auction. All of the hundreds of small potential bidders to the auction have to be a bit nervous seeing the list of companies they could end up bidding against.

As a reminder, RDOF stands for Rural Digital Opportunity Fund and is an auction that starts in October that will award up to $16.4 billion in broadband funding. The money will be awarded by reverse auction in a process that favors faster technologies, but also favors those willing to take the lowest amount of grant per customer. The areas that are eligible for the funding are among the most remote places in the country, which is why the list of potential large bidders is puzzling.

There are some big cable companies on the list: Altice, Charter Communications, Cox Communications, Atlantic Broadband, Midco, and Mediacom Communications. These companies serve many of the county seats or other nearby towns to many of the RDOF areas. One has to wonder what these companies have in mind. The only one that has chased any significant federal grants in the past is Midco in Minnesota and North Dakota. Midco has been using grant money to extend fiber backhaul to connect its smallest markets, to build last-mile broadband in some tiny towns, and to build fixed wireless in rural areas surrounding its cable markets.

One has to wonder if the other cable companies have a similar plan. It’s incredibly inefficient to build traditional hybrid coaxial-fiber networks in rural areas, so it’s unlikely that the cable companies will be extending their existing networks. The RDOF auction is being done by Census blocks, which in rural areas can cover a large area. The winner of the auction for a given Census block must offer service to everybody in that block. I also have a hard time envisioning all of these big cable companies getting into the wireless business like Midco is doing, so their presence in the auction is a bit of a mystery.

Then there are the traditional large telcos including Frontier, Windstream, Consolidated Communications, and CenturyLink. These companies already serve many of the areas that are covered by the reverse auction. These are the rural areas where these companies have largely neglected the old copper wiring and either offer no broadband or dreadfully slow DSL. The minimum technology allowed to enter the auction must deliver 25/3 Mbps broadband. It’s almost painful to think that these companies would chase the funding and promise to upgrade DSL to 25/3 Mbps after these companies largely botched an upgrade to 10/1 Mbps DSL in the just-ending CAF II grants. The cynic in me says they are willing to pretend to upgrade DSL all over again if that means substantial grant money. I have to think that some of these companies are considering deploying fixed wireless. To the extent any of these companies is willing to take on new debt or use equity, they could also build fiber. None of these companies has built a substantial amount of fiber to truly rural places, but may these grants are the inducement they were waiting for.

Verizon and U.S. Cellular have registered for the auction. You have to think the cellular carriers will be deploying fixed cellular broadband like the 4G FWA product that Verizon just announced recently. These companies already have equipment on towers in many of the RDOF grant areas and would love to grab a subsidy to roll out a product they might be selling in these areas anyway.

Then there are the satellite companies SpaceX, Hughes Network Systems, and Viasat. Viasat has won federal grant money before for selling broadband from its high-altitude satellites. SpaceX is the wildcard since nobody knows anything about the pricing or real speeds they can provide. We know that Elon Musk has been lobbying the FCC to let him have a shot at the billions up for grabs in this auction.

There is another interesting wildcard with Starry. Their business plan is currently selling fixed wireless to large apartment buildings in center cities and they’ve developed a proprietary technology that’s perfect for that application. They must have something else in mind in chasing grant money in remote areas that are 180 degrees different than their normal business model. Starry founder Chet Kanojia is incredibly creative, so he probably has a new technology in mind if he wins auction funding.

There may be other big players in the auction as well since many of the registered bidders are participating under partnerships or corporations that are disguising their identity for now. I think one thing is clear and some of the rural ISPs and cooperative who think nobody else is interested in their markets will get a surprise early in the auction. These big companies didn’t register for the grant auction to sit on the sidelines.

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The Industry

Amazon Joins the Broadband Space Race

I wrote a blog just a few weeks ago talking about how OneWeb had fully leaped into the race to place broadband satellites by launching a few test satellites and also by raising a few more billion dollars to fund the venture.

It’s been rumored for several years that Amazon was also interested in the idea, but their plans have been under wraps. It just came to light that Amazon has taken the first public steps and had the FCC file paperwork with the International Telecommunications Union to make notice of Amazon’s intent to launch satellites.

Amazon filed with the FCC under the name of Kuiper Systems LLC. Space fans will recognize the corporate name as a reference to the Kuiper belt, which is the area of the solar system past Neptune that is believed to contain numerous comets, asteroids and other small objects made largely of ice.

Amazon has big plans and the ITU filing said the company wants to launch a constellation of 3,236 satellites in low earth orbit. That’s 784 satellites in orbit at 367 miles above the earth, 1,296 in orbit at 379 miles, and 1,156 in orbit at 391 miles. Added to the other companies that are talking about getting into the business that’s now more than 10,000 planned satellites.

We know that Jeff Bezos is serious about space. He owns a rocket business, Blue Origins, that is developing an orbital-class rocket called the New Glenn. That company already has some future contracts to make private launches for OneWeb and Telesat. Amazon also recently launched a cloud computing service knows as AWS Ground Station that is intended to provide communications data links between earth and object in outer space. We also found out recently that Bezos kept 100% control of Blue Origins as part of his divorce settlement.

None of the low-orbit satellite ventures have talked about broadband speeds, prices or customer penetration goals. The only one making any announcement was SpaceX who said that his Starlink satellites would be capable of making a gigabit connection to earth. But that’s a far cry from a realistic estimate of a broadband product and is the satellite version of the Sprint cellphone test that showed that millimeter wave spectrum could deliver gigabit speeds to a cellphone. It can be done but is incredibly hard and would involve synching big data pipes from multiple satellites to a single customer.

We got another clue recently when OneWeb asked the FCC for permission to eventually create 1 million links to earth-based receivers, meaning customers. That puts some perspective on the satellites and shows that they are not trying to bring broadband to every rural customer. But still, one million satellite connections would represent about 10% of the rural homes in the US that don’t have broadband today. If that’s their US goal it automatically tells me that prices will likely be high.

NASA and others in charge of space policy have also started talking recently about the potential dangers from so many objects in orbit. We don’t know the size of the Amazon satellites yet. But Elon Musk said his satellites would range in size from a refrigerator down to some that are not larger than a football. NASA is worried about collisions between manned space flights with satellites and space debris.

Amazon is still early in the process. They haven’t yet filed a formal proposal to the FCC discussing their technology and plans. They are several years behind OneWeb and Starlink in terms of getting a test satellite into orbit. But an Amazon space venture has the built-in advantage of being able to advertise a satellite broadband product on the Amazon website where the vast majority of Americans routinely shop. I can envision Amazon measuring the broadband speed of a customer connected to the Amazon website and popping up an offer to buy faster broadband.

It’s absolutely impossible to predict the impact these various satellite companies will have on US broadband. A lot of their impact is going to depend upon the speeds and prices they offer. A lot of rural America is starting to see some decent speeds offered by WISPs with newer radios. Every year some pockets of of rural America are getting fiber and gigabit speeds. Where might the satellites fall into that mix? We can’t forget that the need for broadband is still doubling every three years, and one has to consider the speeds that homes will want a decade from now – not the speeds households want today. We’re at least a few years from seeing any low-orbit broadband connections and many years away from seeing the swarm of over 10,000 satellites that are planned for broadband delivery.

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The Industry

Delays in Satellite Broadband

One of the big unknowns for rural broadband is if there will ever be a better satellite broadband option. The industry was surprised last year when Elon Musk announced that he planned to blanket the earth with over 4,000 satellites and operate as a worldwide ISP under the newly formed Starlink. These satellites would be launched by SpaceX, another Elon Musk company that that provides commercial rocket launches.

I’ve been following the financial news about the Elon Musk family of businesses, and about SpaceX and Starlink more specifically, since a successful launch of the business could provide another rural option for broadband.

There are several financial analysts predicting that Starlink is now largely on hold, due mostly to funding issues. They report that Starlink has stopped hiring the new employees needed to implement the business plan. Further, it appears that SpaceX needs up to $10 billion to fulfill its own business plan and that any money raised by the company is likely to go there first before Starlink is funded. At a minimum this probably means a major delay in satellite launches for Starlink.

These analysts warn that the SpaceX business plan is not yet solid. The commercial launch business is now seeing other major competitors. ULA, the existing major competitor to SpaceX has been stepping up their game. Boeing is behind Space Launch Systems, another newcomer to the field. Jeff Bezos of Amazon has started Blue Origin and has started construction on a spaceflight center in Florida. There is also a new competitor announced in Japan. The competition is going to drive down the cost of space launches and will also spread the launches among numerous parties, diluting any early advantage enjoyed by SpaceX.

SpaceX was counting on riding the coattails of other commercial launches to get the broadband satellites into space. The company is scheduled to complete 28 launches by the end of this year but is only scheduled so far for 18 launches in 2019. The company is also banking on making money from selling commercial space travel to rich tourists, but the analysts doubt that will be enough revenue to keep the company afloat.

Starlink had originally announced plans to have 40 million broadband subscribers generating $30 billion in annual revenues by 2025. That’s an average revenue per customer of $63 dollars per month. It now looks like the date for getting the company started will be significantly delayed. Starlink launched two test satellites earlier this year, but has not reported how they performed.

I’ve also wondered if Starlink would strongly pursue the residential broadband business in North America. While they will be a great alternative for rural America, they will be just another player in cities. Being an ISP makes a lot more sense in those parts of the world where the company could enjoy a near-monopoly.

In the US and Canada there is probably a lot more money to be made instead by serving the many proposed small cell sites if 5G turns out to be a relevant business plan. Starlink says they can deliver speeds of a gigabit or more to a given customer, but the math behind the bandwidth available at any given satellite means that would only be available to a relatively small number of customers rather than to the whole residential market. Speeds for residential broadband are likely to be at much lower speeds. However, gigabit satellite broadband could be the backhaul solution that 5G needs and might let it escape the bottleneck of needing fiber everywhere. I’ve never seen any discussion of such a partnership, but that’s probably because the satellite business is still somewhat theoretical and at a minimum, delayed from the original projected time line.

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The Industry

The Flood of New Satellite Networks

I wrote a blog a few months ago about SpaceX, Elon Musk’s plan to launch a massive network starting with over 4,400 low-orbit satellites to blanket the world with better broadband. SpaceX has already launched the first few test satellites to test the technology. It seems like a huge logistical undertaking to get that many satellites into orbit and SpaceX is not the only company with plans for satellite broadband. Last year the FCC got applications for approval for almost 9,000 different new communications satellites. Some are geared to provide rural broadband like SpaceX, but others are pursuing IoT connectivity, private voice networks and the creation of space-based backhaul and relay networks.

The following companies are targeting the delivery of broadband:

Boeing. Boeing plans a network of 2,956 satellites that will concentrate on providing broadband to government and commercial customers worldwide. They intend to launch 1,396 satellites within the next six years. This would be the aerospace company’s first foray into being an ISP, but they have experience building communications satellites for over fifty years.

OneWeb. The company is headquartered in Arlington, Virginia and was founded by Greg Wyler. The company would be a direct competitor to SpaceX for rural and residential broadband and plans a network of over 700 satellites. They have arranged launches through Virgin Galactic, the company founded by Richard Branson. The company plans to launch its first satellite next year.

O3b. The company’s name stands for the ‘other 3 billion’ meaning those in the world with no access to broadband today. This company is also owned by Greg Wyler. They already operate a few satellites today that provide broadband to cruise ships and to third-world governments. Their plan is to launch 24 additional satellites in a circular equatorial orbit. Rather than launching a huge number of small satellites they plan an interconnected network of high-capacity satellites.

ViaSat. The company already provides rural broadband today and plans to add an additional 24 satellites at an altitude of about 4,000 miles. The company recently launched a new ViaSat-2 satellite this year to augment the existing broadband satellite service across the western hemisphere. The company is promising speeds of up to 100 Mbps. In addition to targeting rural broadband customers the satellite is targeting broadband delivery to cruise ships and airplanes.

Space Norway. The company wants to launch two satellites that specifically target broadband delivery to the Arctic region in Europe, Asia and Alaska.

The business plans of the following companies vary widely and shows the range of opportunities for space-based communications:

Kepler Communications. This Canadian company headquartered in Toronto is proposing a network of up to 140 tiny satellites the size of a football which will be used to provide private phone connectivity for shipping, transportation fleets and smart agriculture. Rather than providing broadband, the goal is to provide private cellphone networks to companies with widely dispersed fleets and locations.

Theia Holdings. The company is proposing a network of 112 satellites aimed at telemetry and data gathering for services such as weather monitoring, agricultural IoT, natural resource monitoring, general infrastructure monitoring and security systems. The network will consist almost entirely of machine to machine communication.

Telesat Canada. This Canadian company already operates satellites today that provide private voice communications networks for corporate and government customers. The company is launching two new satellites to supplement the 15 already in orbit and has plans for a network consisting of at least 117 satellites. The company’s largest targeted customer is the US Military.

LeoSat MA. The company is planning a worldwide satellite network that can speed a transmission around the globe about 1.5 times faster than terrestrial fiber networks. Their market will be large businesses and governments that need real-time communication around the globe for applications like stock exchanges, business communications, scientific applications and government communications.

Audacy Corp. The company want to provide the first satellite network aimed at providing communications between satellites and spacecraft. Today there is a bandwidth bottleneck between terrestrial earth stations and satellites and Audacy proposes to create a space-only broadband relay network to enable better communications between satellites, making them the first space-based backbone network.

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Current News Technology

Edging Closer to Satellite Broadband

A few weeks ago Elon Musk’s SpaceX launched two test satellites that are the first in a planned low-orbit satellite network that will blanket the earth with broadband. The eventual network, branded as Starlink, will consist of 4,425 satellites deployed at 700 miles above earth and another 7,518 deployed at around 210 miles of altitude.

Getting that many satellites into orbit is a daunting logistical task. To put this into perspective, the nearly 12,000 satellites needed are twice the number of satellites that have been launched in history. It’s going to take a lot of launches to get these into the sky. SpaceX’s workhorse rocket the Falcon 9 can carry about ten satellites at a time. They also have tested a Falcon Heavy system that could carry 20 or so satellites at a time. If they can make a weekly launch of the larger rocket that’s still 596 launches and would take 11.5 years. To put that number into perspective, the US led the world with 29 successful satellite launches last year, with Russia second with 21 and China with 16.

SpaceX is still touting this as a network that can make gigabit connections to customers. I’ve read the FCC filing for the proposed network several times and it looks to me like that kind of speed will require combining signals from multiple satellites to a single customer and I have to wonder if that’s practical when talking about deploying this networks to tens of millions of simultaneous subscribers. It’s likely that their standard bandwidth offering is going to be something significantly less.

There is also a big question to me about the capacity of the backhaul network that carry signal to and from the satellites. It’s going to take some major bandwidth to handle the volume of broadband users that SpaceX has in mind. We are seeing landline long-haul fiber networks today that are stressed and reaching capacity. The satellite network will face the same backhaul problems as everybody else and will have to find ways to cope with a world where broadband demand doubles every 3 years or so. If the satellite backhaul gets clogged or if the satellites get over-subscribed then the quality of broadband will degrade like with any other network.

Interestingly, SpaceX is not the only one chasing this business plan. For instance, billionaire Richard Branson wants to build a similar network that would put 720 low-orbit satellites over North America. Telesat has launched two different test satellites and also want to deploy a large satellite network. Boeing also announced intentions to launch a 1,000-satellite network over North America. It’s sounding like our skies are going to get pretty full!

SpaceX is still predicting that the network is going to cost roughly $10 billion to deploy. There’s been no talk of consumer prices yet, but the company obviously has a business plan – Musk want to use this business as the primary way to fund the colonization of Mars. But pricing is an issue for a number of reasons. The satellites will have some finite capacity for customer connections. In one of the many articles I read I saw the goal for the network is 40 million customers (and I don’t know if that’s the right number, but there is some number of simultaneous connections the network can handle). 40 million customers sounds huge, but with a current worldwide population of over 7.6 billion people it’s miniscule for a worldwide market.

There are those predicting that this will be the salvation for rural broadband. But I think that’s going to depend on pricing. If this is priced affordably then there will be millions in cities who would love to escape the cable company monopoly, and who could overwhelm the satellite network. There is also the issue of local demand. Only a limited number of satellites can see any given slice of geography. The network might easily accommodate everybody in Wyoming or Alaska, but won’t be able to do the same anywhere close to a big city.

Another issue is worldwide pricing. A price that might be right in the US might be ten times higher than what will be affordable in Africa or Asia. So there is bound to be pricing differences based upon regional incomes.

One of the stickier issues will be the reaction of governments that don’t want citizens using the network. There is no way China is going to let citizens bypass the great firewall of China by going through these satellites. Repressive regimes like North Kora will likely make it illegal to use the network. And even democratic countries like India might not like the idea – last year they turned down free Internet from Facebook because it wasn’t an ‘Indian’ solution.

Bottom line is that this is an intriguing idea. If the technology works as promised, and if Musk can find the money and can figure out the logistics to get this launched it’s going to be another new source of broadband. But satellite networks are not going to solve the world’s broadband problems because they are only going to be able to help some small limited percentage of the world’s population. But with that said, a remote farm in the US or a village in Africa is going to love this when it’s available.

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Current News Technology

Can Satellites Solve the Rural Broadband Problem?

A few weeks ago Elon Musk announced that his SpaceX company is moving forward with attempting to launch low earth orbit (LEO) satellites to bring better satellite broadband to the world. His proposal to the FCC would put 4,425 satellites around the globe at altitudes between 715 and 823 miles. This contrasts significantly with the current HughesNet satellite network that is 22,000 miles above the earth. Each satellite would be roughly the size of a refrigerator and would be powered by a solar array.

This idea has been around a long time and I remember a proposal to do something similar twenty years ago. But like many technologies, this really hasn’t been commercially feasible in the past and it took improvements to the underlying technologies to make this possible. Twenty years ago they could not have packed enough processing power into a satellite to do what Musk is proposing. But Moore’s Law suggests that the chips and routers today are at least 500 times faster than two decades ago. And these satellites will also be power hungry and weren’t possible until modern solar power cells were created. This kind of network also requires the ability to make huge numbers of rocket launches – something that was impractical and incredibly expensive twenty years ago. But if this venture works it would provide lucrative revenue for SpaceX, and Elon Musk seems to be good at finding synergies between his companies.

Musk’s proposal has some major benefits over existing satellite broadband. By being significantly closer to the earth the data transmitted from satellites would have a latency of between 25 and 35 milliseconds. This is much better than the 600 milliseconds delays achieved by current satellites and would put the satellite broadband into the same range that is achieved by many ISPs. Current satellite broadband has too much latency to support VoIP, video streaming, or any other live Internet connections like Skype or distance learning.

The satellites would use frequencies between 10GHz and 30GHz, in the Ku and Ka bands. Musk says that SpaceX is designing every component from the satellites to earth gateways and customer receivers. For any of you that want to crawl through specifications, the FCC filing is intriguing.

The large number of satellites would provide broadband capability to a large number of customers, while also blanketing the globe and bringing broadband to many places that don’t have it today. The specifications say that each satellite will have an aggregate capacity of between 17 and 23 Gbps, meaning each satellite could theoretically process that much data at the same time.

The specifications say that the network could produce gigabit links to customers, although that would require making simultaneous connections from several satellites to one single customer. And while each satellite has a lot of capacity, using them to provide gigabit links would chew up the available bandwidth in a hurry and would mean serving far fewer customers. It’s more likely that the network will be used to provide speeds such as 50 Mbps to 100 Mbps.

But those speeds could be revolutionary for rural America. The FCC and their CAF II program is currently spending $9 billion to bring faster DSL or cellular service to rural America with speeds that must be at least 10/1 Mbps. Musk says this whole venture will cost about $10 billion and could bring faster Internet not only to the US, but to the world.

It’s an intriguing idea, and if it was offered by anybody else other than Elon Musk it might sound more like a pipedream than a serious idea. But Musk has shown the ability to launch cutting-edge ventures before. There is always a ways to go between concept and reality and like any new technology there will be bugs in the first version of the technology. But assuming that Musk can raise the money, and assuming that the technology really works as promised, this could change broadband around the world.

This technology would likely be the death knell of slower rural broadband technologies like LTE cellular, DSL, or poorly-deployed point-to-multipoint wireless systems. In today’s world the satellites would even compete well with current landline data products in more urban areas. But over a decade or two the ever-increasing speeds that customers will want will ultimately still be better served by landline connections. Yet for the near future this technology could be disruptive to numerous landline broadband providers.

It’s hard to envision the implications from providing fast broadband around the globe. For example, this would provide a connection to the web that is not filtered by a local government. It would also bring real broadband to any rural place that has available power. In the poorer nations of the world this would be transformational.  It’s hard to over-state the potential impacts that this technology could have around our planet if it’s deployed successfully.

Musk says he would like to launch his first satellite in 2019, so I guess we won’t have to wait too long to see if this can work.  I’ll be watching.

 

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