Breathing life into broadband: Will satellite technologies save the day?

Why bother with crusty old copper pipes, when you can bounce your data off a shiny new satellite? Ben King asks whether the sky really is the limit for broadband internet.

People have been using satellite in their homes for years for television services and now several companies have announced plans to start offering broadband internet via satellite. While a DSL modem is not a beautiful thing, it can at least be hidden under a desk. Broadband satellite requires a dish, about 75cm across, which is unsightly and can cause planning trouble. Sending data into space and back takes a long time, so there is inevitably a short delay (around quarter of a second, for the most commonly used satellites). For most applications, be they internet surfing, file downloading, or even video, this is not generally a problem, but the delay can be irritating with two-way applications such as voice telephony. It's also a problem for real-time online games applications. Niall Rudd from UK consultants Schema, suggests that the games sector is very important, and set for dramatic growth. "By 2005, we predict that European consumers will spend $5bn annually, playing online games. In the US, satellite products have struggled to support these," he said. There are also teething problems with Virtual Private Networks over satellite, he says. For all DSL's faults, it can at least be used when the weather is bad. The frequencies broadband satellites in Europe may use are subject to interference from certain types of rain. Oddly enough, the UK's persistent drizzle doesn't affect this as badly as monsoon rains in Asia, but it remains a problem nonetheless. It's also rather expensive. The majority of satellite links in Europe are operated by Hughes Electronics, the satellite division of General Motors, which is currently the subject of a takeover battle, known in Europe as HOT Telecom. Hughes satellite terminals are also used by a variety of commercial customers, such as petrol stations, car showrooms, doctors' surgeries, and Camelot, which uses their system for linking remote lottery terminals to the national network. Hughes has been selling a one-way broadband internet service for consumers, called DirecPC, since 1998 in the UK. This uses a telephone line as an uplink and a satellite as a downlink, to download data extremely fast, though the uplink is slower. The company is continuing to sell this, as a cheaper alternative to two-way satellite. DirecPC runs off a PC card, which caused reliability problems, and the service never really took off among consumers, with most of the 140,000 reported sales going to businesses. But Hughes is planning a one-way USB-based service that will compete directly with consumer ADSL in the £30 per month price range. The second largest VSAT (Very Small Aperture Terminal) supplier is Gilat Satellite Networks, based in Petah Tikva, Israel. Gilat's services are resold by BT Openworld in Europe and Tiscali in Italy, France and Germany. BT Openworld's is planning to charge £100 a month, which compares badly with £30 for the cheapest form of DSL and even less for cable (depending on whether you want telly, too). "At £100 a month we think BT will get about five subscribers. It's simply not a consumer price," says Schema's Rudd. Installation prices for either of these services have not been published, but given the expense of buying and mounting a satellite dish, they are likely to exceed the £150 charged for DSL. These systems also use VSAT. There are around 50,000 broadband VSATs currently installed or on order across Europe, according to Simon Bull senior consultant at research house Comsys, which publishes a respected annual report on the VSAT market. Hughes and Gilat have had numerous problems with capacity, too. The amount of transponder space available on a satellite is limited, and getting customers to restrict their consumption of broadband space isn't easy. Hughes faced a barrage of bad publicity in the US when they imposed caps on the amount of data their users could download. "Starband [which uses Gilat's system] is also having problems," says Comsys's Bull. "They need to get 20,000 users onto their satellite to make their business model work, but at the moment they are having trouble supporting 10,000." Hughes and Gilat both use proprietary protocols, which are mutually incompatible.
There is an official, open satellite broadband standard, called DVB-RCS, developed by satellite operators Astra and given the stamp of approval from an official standards body, the ETSI. "It has some advantages," says Comsys's Bull. "You have the advantage that it is a standard, it has the theoretical capacity to go up to 2Mbit/s." However, their real disadvantage is that the reception equipment is much more expensive than the non-standard kit sold by Gilat and Hughes. Higher data rates require higher-powered satellite equipment, and prices for higher-powered equipment increase exponentially. Bull reckons that the ground equipment for a 2Mbit/s DVB-RCS station will cost about $10,000, partly because of the power required and partly because so few units are currently made. DVB-RCS start-up Aramiska is betting that small businesses will be willing to pay that price, but a business would have to have a very pressing need for the extra bandwidth to open their wallets that wide. And until they start signing up large numbers of customers, it will be difficult to get prices down. In areas where DSL is available, satellite broadband is not likely to be an attractive option. But that leaves 50 per cent of UK households and thousands of small businesses and home offices which can't get DSL now and many which never will. Whether £100 a month is a price small business can afford remains to be seen. As for the satellite operators, the industry will watch with interest to see if they can actually turn a profit from sales at these prices.