ViaSat Inc. hopes that its acquisition of Efficient Channel Coding Inc. (ECC) provides entry into markets in the Asia Pacific region served by the recently launched IPStar satellite. ECC, a producer of broadband communications integrated circuits and satellite communications systems, already is entrenched in the IPStar offering.

ECC holds the license for the design of the satellite terminal distributed by IPStar operator Shin Satellite plc. Under the license, ECC supplies customized chips to authorized IPStar terminal manufacturers and receives an undisclosed amount of royalties for the terminal design.

“Pretty much all the terminals that have been deployed to date have used ECC chips,” ViaSat Chairman and CEO Mark Dankberg told Satellite News. “The other thing ECC did is they developed a reference design around those chips. If somebody wants to manufacture terminals, they could go off and design it themselves from scratch, or they could use the ECC reference design and then ECC earns a royalty.”

Those two factors made ECC an attractive purchase for ViaSat, which will pay $16.5 million cash for ECC, along with the assumption of certain stock options and an additional consideration of $9 million in cash and/or stock based on ECC meeting certain financial targets throughout the next two years. ECC will operate as a wholly owned subsidiary of ViaSat.

“We think there is a lot of opportunity [in the Asia Pacific region] and ECC gives us a way to enter into that market and participate in it,” Dankberg said. The bulk of those opportunities will center on broadband access, though he declined to specify what kinds of applications will be the key drivers of other business.

“The Asia-Pacific region is a collection of many different markets, and different countries are in very different places in terms of applications that can drive growth in each of them,” Dankberg said. “For instance, the situation in Australia is a lot different from the situation in China, which is a lot different from the situation in India. And those three countries represent more than half, maybe two-thirds, of the total coverage area of IPStar. We will have to see what happens in each of those markets. I think where IPStar will have an advantage is in applications that use a lot of bandwidth and Internet access is certainly the fastest growing, most common application there.”

DVB-RCS S2

While the IPStar license represents a clear growth pattern, the other driver that led ViaSat to ECC was its work in the work in the DVB-RCS S2 (the second generation of the DVB-RCS standard) arena, even though work in that area is still in the development stages.

Dankberg noted that DVB-RCS was intended to be the standard for satellite networking, but one of the issues with DVB-RCS is that it is basically a broadcast system designed to ensure everyone received the same signal. However for data applications, the signal would not be optimized for Internet traffic for different users with different bandwidth requirements. ViaSat addressed that issue in its DOCSIS system with an adaptive coding system “so we can measure the signal quality of each individual user and then send the signal as fast or slow as we need to without affecting everybody else,” Dankberg said.

That methodology is being worked into DVB-RCS-S2.

“DVB-RCS S2…is the second generation of video broadcast [with an added] mode called ACM (adaptive coding and modulation). That is kind of the latest in the DVB-RCS world. Nobody has it yet. There are no DVB S2 systems with ACM and we felt that ECC was the farthest along to having chips that would be able to support that [and] we have the first shot of being the first one out with them.”

Dankberg said that while DVB-RCS S2 won’t necessarily open up any markets for ViaSat, “it will be the flavor of DVB-RCS that customers expect.” He said it likely will be the common version of DVB-RCS employed within a year’s time.

–Gregory Twachtman