As we move past a period of intensive financial engineering and consolidation, the satellite industry increasingly is focused on how it will compete with and complement terrestrial communications providers in the future.

The man-made and natural catastrophes of the early years of the 21st century were no less a watershed for public appreciation of satellite service than they were for the population at large. In fact, taken together with the concurrent entry of private equity into a satellite sector then becalmed by a telecommunications and technology bubble meltdown and chronic overcapacity issues, the launch of satellite broadband service and the 50th anniversary of Sputnik, those events may eventually seem in hindsight like the inauguration of a second era of the Space Age.

The Sept. 11 attacks and Hurricane Katrina particularly showcased what satellites can do that terrestrial service cannot fully replicate. Since then, satellite-based broadcasting, Earth imaging and defense and security applications have worn a new face. But while satellite’s capability is recognized, the flip side is heightened scrutiny, including concerns about physical and data privacy.

Against this backdrop operate a wide range of fixed and mobile satellite service operators, ground station manufacturers and operators, turnkey network solution providers, and others in a kind of satellite “Generation X” mode: No longer resignedly repeating that satellite service can make inroads only where it does not compete with terrestrial service, but enthusiastically teaming with terrestrial network operators and service providers in the development and operation of hybrid satellite-terrestrial networks and advocating the indispensability of the satellite piece of those networks. In some cases they even assert that the satellite piece of the hybrid is the primary piece, with the terrestrial service component a valuable — perhaps indispensable — but secondary piece.

Satellite service as part of hybrid networks plays a key role in risk mitigation for enterprise level customers, government agencies and individuals. Not only are Sept. 11 and Katrina-level disasters able to disrupt terrestrial service while generally not affecting satellite service, but terrestrial networks often are far less fail-safe than is generally supposed. It is common for supposedly redundant fiber strands actually to use many of the same infrastructure and rights of way, for example, passing over and through bridges and tunnels.

The reasons for this are several. First, the rights of way frequently are the only, or only practical, way for a fiber strand to pass. Second, procuring rights of way from landowners, government-owned and operated infrastructure, building developers, and other players is expensive and time consuming. Third, there is significant public and private sector resistance to the digging of trenches for laying of fiber with the attendant noise, traffic disruptions and other nuisances. Consequently, a great deal of fiber gets laid in the same trench or adjoining trenches, meaning its promoted redundancy necessarily is compromised.

Satellite service provides true risk mitigation for terrestrial networks. Fiber also is subject to cuts from construction activities, earthquakes, sabotage and, in the case of undersea cable, deep-sea fishing activity. For mission-critical public and private sector use, terrestrial fiber networks are not fail-safe enough.

Satellite service also provides optimization of network operations for mission-critical levels of service for enterprise-level customers. Increasing reliability, increasing bandwidth availability, decreasing bandwidth costs, the use and reuse potential of Ka-band service, DVB-2, DVB-RCS, and MPEG-4 service all are potential game changers in the satellite versus terrestrial network optimization analysis. In addition, the broadcast and spot beam penetration of satellite service, the emergence of broadband VSAT, and the ever increasing importance of mobile communications, including in regions of low cell tower density, make satellite a critical element in network optimization. That does not even take into account the potential of ancillary terrestrial component service using terrestrial repeaters to boost satellite signal penetration.

These services and capabilities also highlight the challenges ahead. We are still in a process of determining when satellite and terrestrial service complement each other and when they do and should compete. We are still in a process of determining the models most conducive for satellite-terrestrial partnerships. When will it be appropriate, on a service optimization level, to create formal business combinations, joint ventures, strategic alliances or purely commercial arrangements? When will minority investments be a better model?