Satellite Companies Build Broadband Bridge to Unserved Rural Markets

By | March 9, 2009 | Uncategorized

There are roughly 110 million households in the United States, and 16.5 million of those are in rural communities — areas of the country that have a population density of 50 households per square mile or less where penetration by DSL and other landline services are less likely to occur because of expensive landline installations. One of the major issues surrounding broadband rollout into these rural markets is the economic viability of implementation. The answer may lie in President Obama’s American Recovery and Reinvestment Act, providing a $7.2 billion boost to the satellite industry comes for this exact purpose.
    The stimulus bill also offers grants or funding to companies willing to deploy broadband in unserved markets. The legislation also creates a new broadband technology opportunities program at the U.S. National Telecommunications and Information Administration (NTIA), a unit of the U.S. Department of Commerce that would oversee the distribution of broadband grants. Grant recipients would have to underwrite up 20 percent of project costs, with hardship waivers available when necessary. Another $2.5 billion in broadband grants will be administered by the U.S. Department of Agriculture’s Rural Utilities Service.
    Satellite companies are not alone in the fight for stimulus money. The bill also provides a boost to a range of technology companies — some in direct competition with satellite for broadband voice and data projects.
    Google, Microsoft and Cisco Systems all released statements saying that the bill provides them with an incentive to push supporting electronic systems. In an interview with The San Francisco Chronicle, AT&T spokeman Ted Wagnon said that while AT&T initially was not seeking funds from the stimulus bill, the company is “ready to work with federal, state and local governments on innovative programs to help drive broadband deployment and adoption.”
    But the broadband stimulus bill has emboldened large and small satellite companies who believe their solutions are the most economically viable in a financially shaken economy,     Skycaster President Michael Kister is pushing his company’s solution to government customers. “There are funds available [in the bill] to build Wi-Fi networks to connect small communities that were previously ‘off the grid’ as far as the Internet is concerned,” he said. “Wi-Fi is often a great solution, but there’s still a missing link. How do you connect the Wi-Fi network to the rest of the Internet backbone? Fiber buildouts can be prohibitively expensive, costing $10,000 to $20,000 per mile, or more, depending on the terrain. Satellite is a viable alternative in these situations.”
    Kister also believes that there are opportunities for satellite in the bill that go beyond the broadband stimulus portion. The highway infrastructure plan included in the economic package provides a potential customer in construction companies. “The reality is that if you are going to do a construction project in the 21st century you need reliable communications to the site — not just cell phones, but real IP communications for e-mailing documents, verifying plans and work orders,” he said.
    Ed Knudson, vice president and director of sales and marketing for WildBlue, advertises his satellite Internet provider as a cost-effective service that focuses on providing to underserved regions. “We focus on customers in rural America who do not have access to DSL, cable, WiMax or any other high-speed service, specifically households whose only option for getting on their Internet is a dial-up connection or WildBlue,” he said. “We spend a lot of our time trying to project where DSL has penetrated and where it has not. We have some highly advanced algorithms that factor where central offices are, where stingers reach, etc.”
    “The most cost-effective way is to go ahead and have satellite act as an intra-state, or an intra-region or even international axis point,” said Frank Prautzsch, a director with the newly formed Rapid Initiatives Group for Raytheon, who discussed the role of the satellite in the big picture. “It is a point-of-system reference point for being able to operate distributed enclaves. If I am a satellite provider, I do not need to have 35 satellite links in an area of 9 square miles of a town. It is ineffective, and it is actually cost-prohibitive. Having said that, having one, maybe two, links and having distributed wireless services and or other fiber access tied to the satellite systems, you could go from there. That is relatively smart.”

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