Satellite Broadband Viable Alternative in Rural Areas, Providers Say, Seeking Access to CAF Money
Satellite broadband could be the solution for building out broadband and IP services to low-density rural areas, satellite providers and others said in interviews. There’s a perception among satellite providers and some others that the technology hasn’t been given the attention it deserves. Satellite tech has advanced tremendously in the past couple of years, proponents said, pointing to higher speeds, lower costs and a stamp of approval from the FCC’s most recent broadband speed measurement report. But satellite broadband wasn’t eligible for Connect America Fund Phase I money, and the FCC hasn’t made any decisions on the Phase II competitive process. The satellite industry wants to be a part of the discussion.
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To many satellite industry executives and others, the agency’s lack of focus on satellite may be a function of distraction. There’s probably a limited perception at the FCC that satellite is good only for certain uses, said Barbee Ponder, general counsel for Globalstar. “We probably haven’t done enough to convince the FCC that we are a viable alternative for basic voice service in areas that are challenged because of limited terrestrial buildout.”
Some observers point to something more deliberate than distraction as the reason for the dismissal of satellite as a real alternative. If the FCC were to find that satellite was available across the country, the agency would lose a lot of its political clout in trying to exercise its Communications Act Section 706 power over broadband (CD March 12 p6), they say. “The FCC can’t recognize satellite as a viable option since doing so blows its 706 argument to pieces,” said George Ford, economist at the Phoenix Center. “Because satellite threatens the agency’s power, satellite will always be treated as a second-rate citizen by the FCC.”
That’s not true, an FCC official said, pointing to the most recent Section 706 notice of inquiry. That document asks about including satellite in the upcoming broadband report, as well as seeking comment on potential concerns about including it. Those questions include quality of data, latency and capacity limits. Latency in particular could render an otherwise high-speed connection unsuitable for “real-time applications,” the NOI said, such as interactive voice or video communication.
Satellite broadband “has not gotten the kind of attention it should have as a solution for the most rural areas, and I do think that the technology problems that people have complained about in the past have for the most part been addressed,” said a wireline telecom executive. “Some of it is just a lack of real awareness and understanding, and a lack of awareness of how much the technology has improved since the last time folks thought about it,” he said. “It’s a pretty obvious solution for areas that are otherwise unserved.”
Whether satellite is a viable option for blanketing rural America could have major ramifications for how the agency’s Connect America Fund money is spent. Satellite executives said they don’t necessarily need the money -- they have invested billions without subsidies -- but it’s important to them that the agency not distort the market by subsidizing competitors.
Increased Capability
Satellite speeds have improved tremendously over the past several years, and providers are working to ensure that their service to the rural community is part of the dialogue around how the FCC should allocate broadband funds. Hughes’s high throughput satellite, Spaceway 3, which offers 10 Gbps of total capacity, and EchoStar 17, offering more than 100 Gbps, have enabled Hughes to increase the amount of bandwidth and speeds available to customers, said Mike Cook, Hughes North America Division vice president. With that, Hughes went from 1-5 Mbps of download speed to 10-15 Mbps of download speed. Hughes’s next satellite, to be launched in 2016, will offer more than 150 Gbps. With the upcoming satellite, “we'll be offering speeds in excess of 20 Mbps,” said Cook.
ViaSat says it can give most of the country 5/1 satellite broadband, and 12/3 in about 30 states. Its website touts the service as a state-of-the-art technology that “comes from space” -- “you don’t have to deal with antiquated wires and cables.” ViaSat did extremely well on the FCC’s 2013 Measuring Broadband America report. “Satellite broadband has made significant improvements in service quality,” the FCC said, pointing to ViaSat’s delivering 140 percent of its advertised 12 Mbps speeds to 90 percent of its customers -- or nearly 17 Mbps.
VoIP and video streaming work very well through the Exede service, said Lisa Scalpone, ViaSat vice president-broadband. Exede’s 3 Mbps upstream supports telemedicine, distance learning and other services, she said. “That’s usually where the rubber meets the road and we really excel.” Games don’t work as well. “The performance of some games over the Internet is very poor and some games may not work at all,” Exede’s website said. Scalpone acknowledged that real-time “shoot ‘em up” games may be delayed at times, but “that’s not the right reason to prohibit government funding,” she told us.
As a mobile satellite services operator operating in big low earth orbit, Globalstar has the ability to provide ubiquitous coverage in areas that are challenged because there’s no terrestrial infrastructure, said Ponder. Because Globalstar provides services in the big LEO band, “there’s little or no perceptible latency in our transmissions so you can have a crystal clear voice call,” he said. “You would never know that you were speaking via satellite.”
Section 706 a Factor?
Whether satellite works as a viable broadband tech “goes directly to the core question of whether or not broadband is being deployed on a reasonable and timely basis,” said Larry Spiwak, Phoenix Center president. Section 706 is what the FCC uses to justify its regulatory authority over broadband and net neutrality.
If the FCC had considered satellite as a viable option, Spiwak said, one could argue that broadband was deployed everywhere. The FCC National Broadband Plan calculated the cost of bringing wired Internet to every home in America at $56,000 per household, and pointed to satellite broadband as an alternative, Spiwak said. The Measuring Broadband America report said satellite was great, he said. “The commission deliberately decided to ignore satellite in the Section 706 report. That’s what’s so egregious here: The FCC deliberately ignored its own evidence.” Spiwak acknowledged there’s no hard proof the agency ignored evidence to make the finding that broadband was not being timely deployed, thus triggering its 706 authority. But “the circumstantial evidence is overwhelming,” he said.
TechFreedom President Berin Szoka agreed, but questioned the relevance of Spiwak’s assertion now that the Verizon v. FCC case. The U.S. Court of Appeals for the D.C. Circuit said earlier this year the FCC can use Section 706 for some net neutrality rules but not as much as the commission found. Szoka reads Section 706 as an independent grant of authority under which the agency need not make any finding at all to claim authority. “The FCC may be on stronger grounds in claiming deference for the factual basis behind its 706 claim if it has a report to back it up, but unfortunately, the courts have set the bar so low with Chevron that I'm not sure Larry’s quibbles, however accurate, really matter,” said Szoka of the Supreme Court case that gave agencies broad deference to construe a statue.
"I don’t know if there’s any ulterior motives for why the obvious solution to the problem needs to be ignored,” said one wireline telecom executive. “I don’t know if it relates to 706,” he said, but if satellite does solve the problem, and “suddenly broadband is available to all Americans on a reasonable and timely basis, does that undermine the FCC’s authority there?” Or if it’s a viable alternative, “does that somehow gore somebody’s ox that’s receiving universal service funds today?” he asked.
"Those who want to claim that the broadband market is not sufficiently competitive have no interest in including satellite service in the marketplace mix, just as they have no interest in including terrestrial wireless services in considerations of the broadband market,” said Randolph May, president of the Free State Foundation. May said he agreed Section 706 is a factor in the FCC’s exclusion of satellite from its consideration of broadband alternatives.
The FCC is considering the possibility that satellite might be a viable alternative, an agency official said, pointing to the last Section 706 NOI (http://fcc.us/1i2xRhF). The NOI identified and sought comment on potential concerns about including it, including the quality of data, latency, usage limits imposed on subscribers, and capacity limits -- how many customers can satellite serve before reaching capacity. But the agency is open to including it if that’s what the data warrants, the official said. That could lead to a momentous finding: As the NOI put it, “assuming one or more satellite providers are providing broadband that meets the Commission’s speed threshold, would it be appropriate for the Commission to conclude that there are no unserved areas in America for purposes of section 706?"
Questions Remain
Satellite download capabilities have gotten “very good,” and the consumer-level electronics are “somewhat inexpensive,” but “the hard part for the satellite folks is to make it economical to make the upload piece of the equation work on a mass-market scale,” said Tom Soroka, vice president-engineering at USTelecom. Transmitting data quickly up to the various satellites requires a lot of power, he said. “It’s not anywhere near any of the DSL, fiber to the home, or even some of the terrestrial wireless” services available, he said. “You can’t really change physics, so you have to think about the delay of sending something up that’s 24,000 miles away and having it come back to Earth.” With improved technology, upload speeds might become comparable, “but today it’s not there,” he said.
Latency issues, line of sight issues and pricing aren’t “excessive,” but are frequently higher than the cost of wireline broadband to the end user, a wireline industry official said. The satellite industry may argue its service is a good alternative, but “that is not what we hear from our customers,” she said. “There is some basis for saying it may not be reasonable and timely deployed because it may not provide the speed, the pricing, the consistency that other types of services can.” The FCC’s rural broadband experiments will be “an opportunity for satellite” to demonstrate an “innovative way” to utilize the technology that the FCC hasn’t thought about, she said.
A December NTCA report highlighted apparent shortcomings in the ability of satellite to act on a par with wireline services in rural areas (http://bit.ly/1jZFe0h). Satellite is fine for video, NTCA said, but “with interactive two-way traffic, such as voice and broadband data services, complications arise due to limitations innate to satellite communication systems.” High latency, capacity limitations and unreliability during heavy rain were some of the problems NTCA focused on.
That report is “full of old chestnuts,” Cook said. Data compression and acceleration technologies have helped satellite operators overcome latency issues, he said. If a user is looking at a website, “we're already going to pre-fetch the objects from the links on the page you're looking at so we already have them when you make the request,” he said. Then those objects are sent to the user from Hughes’ operations center, he said.
Atmospheric issues are a fact of life in the satellite world, but there also are ways to deal with them, the operators said. The reliability of the Exede service is about the same as that of satellite TV, Scalpone said. “They have 30 million customers and they're perfectly happy.” In severe showers there are outages, but the availability will be well over 99 percent, comparable to other services, she said. Hughes increases the power of transmissions and changes the coding rates of the transmissions, which allows the link to remain in place, Cook said. “The customer may lose a bit of speed, but we offer high levels of availability."
FCC Subsidies
Whether satellite broadband will be eligible for CAF subsidies is an open question. The FCC has traditionally been wary of satellite broadband. In its 2011 Connect America Fund order, satellite broadband was listed as one of the “alternative technology platforms,” along with unlicensed wireless service, as a solution for the Remote Areas Fund -- the most rural of the rural areas. A footnote noted that satellite isn’t “confined” to participating only in that component of CAF -- “they are eligible to participate in any CAF program for which they can meet the specified performance requirements.” Latency is a concern, said the order, and some argue it can’t be improved by increased data speeds.
Satellite ISPs were not eligible for CAF Phase I, which doled out hundreds of millions of dollars to ILECs for broadband buildout in unserved or underserved areas. Nor were they counted among the “unsubsidized competitors” that were allowed to challenge Phase I awards. The FCC limited the definition to fixed, terrestrial providers. “Satellite providers are generally unable to provide affordable voice and broadband service that meets our minimum capacity requirements without the aid of a subsidy,” the order said. “Consumer satellite services have limited capacity allowances today, and future satellite services appear unlikely to offer capacity reasonably comparable to urban offerings in the absence of universal service support.”
For CAF Phase II, which has not yet launched, ILECs will get right-of-first-refusal. After that, a competitive process will allocate unclaimed support. The FCC hasn’t yet decided whether satellite providers will be eligible to compete. Satellite wants the chance to show what it can do. Whatever the agency decides, satellite providers told us, it will be crucial that it maintain a level playing field when subsidizing broadband providers.
The industry has invested more than $2 billion in the development and implementation of the infrastructure that it currently uses, Cook said. The industry is investing collectively in another $1 billion for next generation infrastructure, he said. The industry doesn’t need government funding, Cook said. But “if the government is going to provide funding to people to build out infrastructure into the markets that we're already serving, then our primary objective is to ensure that the FCC provides these funds in such a way that it doesn’t distort competition in the market,” he said.
The satellite industry isn’t asking for automatic grants or right of first refusal, Scalpone said. Where there is competitive bidding, the industry has asked to be allowed to bid, she said. “If we win based on objective criteria, such as speed and price, then we should be allowed to provide service on whatever terms the FCC wants.” Rural telcos have opposed allowing satellite to compete for that funding, she said. “We say if that’s true, let us compete against you in the funding and if we can’t make those claims, let the strongest competitor with the best offer win."
Perhaps the FCC should take a different approach to assisting companies in reaching underserved communities, said Brian Pemberton, director-product management, aeronautical and marine products at Iridium. “It seems it would be far easier to allow consumers to choose what solution they thought was best for them and have a mechanism of reimbursement rather than trying to fund telecom operators to put infrastructure in areas that otherwise don’t have a business case to extend."
"This entire conversation about which technologies should be included ... flows from a decision that was made some point along the way,” said Szoka: “The way that we were going to subsidize broadband was going to be on the supply side.” There’s still a conversation to have about the best way to deploy Internet throughout the country, and broadband vouchers -- subsidies on the demand side -- could let consumers make the choice of which technology they prefer, he said. “This is the road not taken.” -- Matthew Schwartz , Kamala Lane .