Neil Armstrong’s historic statement, stepping onto the Moon for the first time, “That’s one small step for man, one giant leap for mankind” still has meaning today. The satellite broadband industry, and WildBlue Communications Inc. in particular, are making historic steps of their own.

The step being taken by WildBlue involved the commercial deployment of its much-anticipated satellite Internet service, which the company announced May 19 would occur in the first week of June. WildBlue selected Bijou Telephone Cooperative to install its first customer. Bijou provides telephone and dial-up Internet service to approximately 2,500 customers along the I-70 corridor from the Denver to Limon, Colorado. Bijou is part of the National Rural Telecommunications Cooperative (NRTC), the organization through which WildBlue service will be initially available.

“The time has finally come,” Tom Moore, CEO of WildBlue, said in a prepared statement. “We have completed our nationwide beta test, and a whole new world of information and opportunity awaits the estimated 20 million households that doe not currently have access to DSL or cable modem Internet service. WildBlue is proud to start offering broadband services to the people of small-town America and the underserved customers in out-of-the-way pockets across the country.”

A representative from WildBlue was unavailable for comment as this article went to press. However, Satellite News is expecting to speak with Moore in time for the next issue.

Offering Highlight

NRTC members will roll out the WildBlue broadband service during June. It eventually will be offered by more than 280 rural electric and telephone companies by the end of that month. The company plans to add rural consumer electronics and satellite television dealers across the country throughout the next few months and expects to reach nationwide availability of its service by end of the third quarter of this year.

The company will be offering tiered service for residential and small business users.

According to the WildBlue Web site, the residential package has three tiers of service offerings. The least expensive package, named Value Pak, provides service at $49.95 per month. Users get download speeds up to 512 kbps and upload speeds up to 128 kbps. Select Pak users will pay $69.95 per month for download speeds up to 1 mbps and upload speeds up to 200 kbps. Pro Pak users will get download speeds up to 1.5 mbps and download speeds up to 256 kbps. All tiered levels of service charge $299 for equipment and $179.95 for installation. NRTC members will receive free installation as a special rollout promotion.

WildBlue’s Web site lists a separate link for business users of the service, but it only lists the Select and Pro Paks as options available for the office. The service offerings are identical to those listed in on the residential page.

All service packages include additional features common to other terrestrial broadband service offerings, including multiple e-mail accounts, Web space. and remote dial-up access. Some of these additional services, however, do come with additional charges to the monthly service cost.

All Eyes On WildBlue

Whether WildBlue is able to make a giant leap for the satellite broadband market remains to be seen, but many in the satellite industry believe the success or failure of WildBlue could significantly influence what happens in the satellite broadband market.

“We have been waiting for this for a long, long time,” Christopher Baugh, president of independent research firm Northern Sky Research told Satellite News. “The market is going to wait and see what will happen with a wide scale Ka-band DOCSIS deployment. If this does succeed, you will see plans in Europe and in other markets. There are many people tuning in on this to see what happens.

“The next six months after the launch are very critical,” Baugh continued. “It will be very interesting what the feedback at the end of the year is. You will find out very quickly what happens because in three to six months after the launch, if they start talking about subscriber totals and what they are up to, that is great. If you don’t hear, that is bad news.”

“I have been favorably impressed by the management of WildBlue,” Roger Rusch, president of satellite industry consultancy TelAstra Inc. told Satellite News. “These are people who have a solid understanding of all the operational and technical aspects of this business. They should succeed [in turning] satellite broadband delivery into a business.”

With that in mind, both Baugh and Rusch offered some comments as to what will be key for WildBlue’s rollout to be considered successful. In particular, both honed in on two key points: the service must be easy to procure and it must offer speeds at the rates in which WildBlue is advertising them at.

“The key here is if WildBlue can hit the data rates it is projecting and offer the level of services it is projecting, ” Baugh said. “There is demand, it just hasn’t been satisfied by the proper solution.”

Subscriber Projections

Baugh did not offer any specific subscriber projections, but added, “We don’t see any major growth happening. It is going to be fairly slow and steady type growth. I think it is going to be a bit slower than what people expect. But what is more important for me than numbers is the overall impression of the service and can users actually get it quickly.”

Rusch offered a slightly different take. “Since WildBlue is designed to provide service for fees that are one-half or one-third of previous generations, the growth rates should be rapid,” he said. “To date the market share for broadband satellite services is only about 0.6 percent at best. Perhaps WildBlue could attract one percent or more. A wildguess for WildBlue would be 200,000 subscribers in the first two years.”

However, reaching that number could be a challenge. As a point of comparison, Hughes Network Systems‘ Direcway satellite broadband service finished 2004 with 220,000 subscribers, after setting a company record for single year subscriber growth with 40,000 subscribers added last year (SN, Jan. 17). In any case, the satellite broadband market will be taking a significant step next month and for WildBlue to succeed, it may mean the company will need to find a delicate balance between meeting the market’s realistic demand for such service and capturing enough subscribers to make its business a long-term success.