“We are not the enemy! The terrestrial solutions out there are eating all our lunches!” With these combative words, Hughes Network Systems Senior Vice President of Engineering John Kenyon set the tone for “The Path to DVB-RCS Growth: Are We There Yet?” panel discussion held during the SATELLITE 2005 conference and exhibition.

Officially, the session’s goal was to examine the seemingly benign topic of open transmission standards for VSAT users. However, it quickly became clear that the session’s actual business was to debate whether HNS’s IPoS was really an open standard in its own right, or just a sneaky attempt by the world’s dominant VSAT equipment manufacturer to stave off attacks from DVB-RCS equipment manufacturers.

For his part, John Kenyon vigorously defended IPoS’ open standard even though IPoS is based upon HNS’ proprietary Direcway transmission system. Forestalling potential criticism that HNS should have simply adopted DVB-RCS as other VSAT manufacturers have, Kenyon said, “we heard from users and subscribers and service providers that standards are good. Well, if standards are good, good standards are better.” Given that Direcway was already deployed on 500,000 proprietary terminals and was working well, HNS thought it reasonable to transform Direcway into the IPoS open standard; especially because this standard would work for both residential and enterprise VSAT customers. To this end, HNS sought and qualified for standards approval for IPoS from the Telecommunications Industry Association (TIA) and the European Telecommunications Standards Institute (ETSI).

Yet despite all these efforts, HNS remains the only VSAT manufacturer making IPoS-compatible equipment. “Hughes has taken all the risk to prove the technology works and then turned around and made the architecture public,” Kenyon said in frustration. “We have invited other manufacturers to join us [in making IPoS equipment]… What more do you want us to do?”

Judging by the response of some of the other panelists, the short answer might be to drop IPoS and use DVB-RCS instead. Of course, no one actually came out and said this, but their strong advocacy of DVB-RCS and attacks on IPoS made their hostility to HNS’s open standard crystal clear.

On the positive side of the DVB-RCS advocate’s argument, “We have been developing solutions based on DVB-RCS [for VSAT users]… because it is really what the customer needs,” said Patrick Agnieray, vice president of marketing for Alcatel Space.

“We want to give end users a platform that they can trust,” which is why my company supports DVB-RCS added John Ditman, vice president of business development for Nera.

As the world’s largest supplier of DVB-RCS terminals, EMS Satellite Networks is so bullish on DVB-RCS that it offers customers an “Open Standard Guarantee.” According to Stephane Germain, EMS’ vice president of sales & marketing, this means that EMS’s DVB-RCS equipment is “guaranteed” to work on competitors’ DVB-RCS systems and vice versa.

Having voiced their support for DVB-RCS, the attack on IPoS ensued, led by Alcatel Space’s Agnieray. After noting that HNS developed IPoS, has 15 years of experience in making it work and can count on HNS 500,000 terminals being compatible with this standard, Agnieray characterized the idea of competing with HNS in the IPoS space as “absolute suicide”.

It was in response to this attack that Kenyon made his comment about HNS not being the enemy. “We think there is an opportunity for multiple open standards,” he pleaded, but to no avail: It was like watching Bill Gates trying to make friends at a Linux convention. Kenyon’s case would have been bolstered if he could have said that IPoS is compatible with DVB-RCS, but it is not. This explained the hostility of VSAT makers and service providers who have adopted DVB-RCS as their standard of choice. Having chosen what they thought would be the industry’s open standard, they are none too please to be presented with a second open standard that is incompatible with the first. All told, the drama of the DVB-RCS/IPoS debate made for lively viewing. However, what may actually have been the deciding point in the debate was made by Herve Sorre, senior vice president of sales and marketing for VSAT equipment and services provider Satlynx, which sells both Gilat proprietary and DVB-RCS VSAT technology. According to Sorre, 95 percent of his customers buy Gilat products when given the choice because customers say that they need “the best solution for me that is reliable, available and cost-effective.” “Can you give me DVB-RCS at that price?” [customers ask]. But unfortunately for open standards proponents, Satlynx cannot. The small size of the current DVB-RCS market means that DVB-RCS equipment cost more than its proprietary competition. “Once this market for DVB-RCS has increased, we can go back to our clients with DVB-RCS,” Sorre said. Until then, however, Gilat’s proprietary technology is his client base’s overwhelming VSAT platform of choice.

VSAT Opportunities, Challenges

And while the debate over standards continues, the opportunity to deploy voice, video and data services continues to increase among satellite service providers, particularly in developing nations. However, the advancement currently underway did not come without its challenges. Regulatory barriers throughout the developing world take many forms, some of which are obvious and other of which are more subtle. All, however, have hindered significant advancement for satellite-enabled products and services.

“China, Thailand and Vietnam, for example, still have monopolies in place when talking about the Asia-Pacific region,” said Bruce Olcott, attorney with Squire, Sanders & Dempsey. “Asia is a very interesting market when it comes to satellite products and services. Some of the countries are very open to competition while others are not at all. This region, however, is a huge market for satellite services and continues to carry a huge potential for global satellite initiatives.” Dempsey also made his remarks during SATELLITE 2005.

One of those regions holding great promise for new business ventures, according to Dempsey, is Russia. “I venture to say you will hear an awful lot about Russia in the coming year,” he said, adding that this market, though showing signs of improvement, still has significant obstacles to overcome. “Fees in Russia remain higher for VSAT systems that do not use Russian satellites and the application process for non-nationals still remains a challenge to complete and execute.”

But some signs of improvement, at least for the near-term, have surfaced in other parts of the world. “The African market is leading the way. It has been moving faster than any other region of the world,” added Dempsey, as 2004 ushered in liberalization of many African nations.

Latin America is also succeeding with VSAT technology. From communication applications in the oil and gas industry to distance education efforts, tens of thousands of successful VSAT terminals have been deployed from Mexico to Venezuela.

“The key here is to bring applications such as voice-over-IP, telephony, video and distance education,” said Bernardo Schneiderman, president of Telematics Business Consultants. “More than 20,000 VSATs were deployed for a number of E-Government projects in Latin America to help bridge the digital divide.” Schneiderman said during SATELLITE 2005.

Dempsey urged those satellite service providers in the industry to take advantage of the current state of affairs regarding the economic upswing currently embracing the global satellite industry. “We should be focusing on the ‘low-hanging fruit’ and taking advantage of some, if not all, of these ripe opportunities,” he added.

Those opportunities Dempsey was referring to center on the emergency response market and the World Trade Organization Doha Round of trade talks. New regulation now in place allows emergency response workers to bypass the legalities and bureaucratic red tape regarding establishing a VSAT network. Now, when responding to a natural disaster, VSAT network integrators can set up a system immediately and run it for the duration without officially getting everything that is needed on the front end to establish a VSAT system.

–James Careless and Nick Mitsis