While satellite traditionally has enjoyed a virtual monopoly in rural markets, operators are finding more terrestrial competitors entering these growing regions.
The small towns of Fairfield, Mont., Bridgeport, W.Va., and Bennington, Vt., are not used to being on the radar screens of corporate marketing departments. The towns have been so ignored by the communications industry that the best they could hope for was to be included in a federal subsidy program to run telephone lines to their homes. But times are changing, and the emergence of high-speed Internet and other services, coupled with the growth of direct-to-home satellite service, is fueling a high-stakes competition among broadband providers to bring services to the estimated 10 million American homes — some believe the number is as high as 20 million — without high-speed Internet access.
While not all unserved residences are rural, the portion is enough that satellite companies like Colorado-based Wildblue and terrestrial providers such as Country Roads of Maine consider these unserved homes central to their business plans. “Our mission from the start — and it has never wavered — is to bring broadband to rural areas,” Stephanie Lovett, director of marketing for Wildblue, says.
With its mission to bring high-speed Internet to rural residents for less than $50 per month, Wildblue founder Tom Moore hired ViaSat in the late 1990s to develop a satellite version of the Data Over Cable Service Interface Specification, or DOCSIS, which had been the standard specification for transporting data over cable modems for several years. The technology worked in lowering the cost of consumer terminals, but the turn-of-the-century economic downturn caused Wildblue to postpone its plans.
With the backing of companies like Intelsat, Telesat, SES Americom and Eutelsat, Wildblue launched its service in June 2005 and quickly moved to a Ka-band spot beam satellite that further lowered costs and improved service, Lovett says. Since the launch of its service, Wildblue has gained more than 100,000 customers, in part by undercutting the lowest-cost package for residential service offered by Hughes Network Systems (HNS) by about $10 per month. HNS, a subsidiary of Hughes Communications, provides broadband Internet service to all sizes of residential markets, businesses and government agencies, worldwide, using 85 transponders spread across 12 satellites. HNS remains the market leader with 300,000 residential customers and also is in growth mode. The company made its debut on Nasdaq in September.
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