Satellite

Looking for Powerful Liftoff

Challenges ahead as broadband satellite services try to expand beyond niche 7/31/2017 8:00 AM Eastern
ViaSat 2, a new high-capacity broadband satellite, launched into orbit June 2 from Kourou, French Guiana, aboard an Ariane 5 heavy-lift rocket.
Photo by Jeff Baumgartner

Kourou, French Guiana — “We have more internets!”

After years of tension and toil, that was the joyful exultation of a ViaSat engineer the night of June 2, nearly 45 minutes after ViaSat 2, a new high-capacity broadband satellite, was successfully launched into orbit aboard an Ariane 5 heavy-lift rocket from Arianespace’s facilities in French Guiana.

The new bird, built by Boeing Commercial Satellite Systems, is equipped to deliver a powerful payload of 300 Gigabits per second of total throughput.

ViaSat 2 won’t enter service until early 2018 (ViaSat announced on June 22 that the solar arrays of the new satellite were successfully deployed), but the company is already laying the groundwork to deliver satellite broadband services of 100 Megabits per second or more.

For satellite-delivered broadband, that will represent a major accomplishment. A 100 Megabits-per-second offering would essentially quadruple the maximum downstream speeds now delivered by ViaSat’s current top end “Exede” service, as well as what’s offered by one of its chief rivals, Echo-Star-owned Hughes Network Systems.

“We’re still working on our plans, but we likely will have service plans that are up to 100 Mbps, and we may have some that are as high as 200 Mbps,” Mark Dankberg, chairman and CEO of ViaSat, said in an interview just hours before the launch, and during a driving rainstorm that, thanks to the lack of lightning, was never truly a threat to scrub the big event. “The satellite’s capable of that. The real issue is how do we price those plans and how many subscribers can we put on them?”

Though a 100 Mbps satellite-delivered broadband service is achievable, Dankberg said he believes most of the company’s subscribers will be on tiers that deliver slower speeds. But the launch of ViaSat 2 will give the company, which has about 659,000 satellite-broadband subscribers, the ability to far exceed what it’s delivering in the U.S. today using a legacy satellite fleet that includes ViaSat 1 and birds acquired in its 2009 acquisition of WildBlue Communications.

In addition to delivering gobs of bandwidth, ViaSat 2, at an orbital location of 22,236 miles above the earth’s equator (at 69.9 degrees west longitude), will enable ViaSat to expand coverage in North America, Central America, the Caribbean and a portion of northern South America. Key transportation routes between North America and Europe also are expected to benefit.

And there’s a lot more to come. “ViaSat has ambitions to be a global broadband services company,” Dankberg said. “This ViaSat 2 launch is a big step along the way for us towards that path.”

Faster and More Competitive
The ability to deliver faster speeds will give ViaSat a way to compete more directly with cable operators, telcos and other wireline internet service providers. But that won’t be the primary focus.

“Our mission is to be a really good choice for the underserved — not necessarily for people who already have access to fiber-to-the-home or the most modern cable [high-speed internet] service,” Dankberg said. “But the qualification I’m going to make to that is, we want to give that same experience to people who otherwise can’t get it.”

ViaSat 2 will help to turn ViaSat into a bigger regional provider of services that will also span government and enterprise customers while also enhancing its ability to deliver high-quality inflight connectivity as well as broadband service to cruise ships.

It will also amp up competition with Hughes Network Systems, which launched its HughesNet Gen5 service in March, and has already added about 100,000 new and upgrading subscribers to the speedier platform, which matches a 25 Mbps downstream with a 3 Mbps upstream. Gen5 is powered by EchoStar XIX/Jupiter 2, a multi-spot-beam, Ka-band satellite made by Space Systems Loral that launched on Dec. 18, 2016, and complements Hughes’s EchoStar XVII and Spaceway 3 data satellites.

Related: Hughes Tees Up Faster Satellite Broadband Service

Hughes, which has about 1.04 million satellite broadband subs and reaches both U.S. continental coasts plus parts of Alaska, believes it’s playing an important role because terrestrial broadband providers are more limited in how rapidly they can expand and generally don’t put a lot of focus on rural areas, according to Peter Gulla, senior vice president of marketing at Hughes.

Gulla said Hughes is also “finding a lot of opportunity” in areas where the telcos are letting their DSL networks languish as many instead focus on new fixed wireless options.

Still, Hughes will keep its target focused mostly on rural areas and where DSL service is weak, rather than applying marketing dollars and other resources in areas where wireline broadband competition is already strong.

“We are starting to see opportunities in the slow DSL areas,” Gulla said. “But you won’t be seeing us dropping a lot of flyers in New York City trying to convince people that they ought to switch to satellite [broadband]. I think we’re being realistic about what our product is and what it’s good for and what it does and what the value is.”

Though ViaSat is getting ready to raise the speed bar for satellite-delivered broadband, Hughes is not yet making any formal commitments to upgrade its capabilities.

“Right now, 25 [Mbps] seems to be meeting the needs of our customers,” Gulla said. “But that doesn’t mean that’s the end of the line.”

Need for Pricing, Data Flexibility
Beyond speed, other issues remain hot-button competitive factors. Among them: Satellite broadband-service providers will need to be more flexible on pricing and support relaxed data policies if they are to have much success in their traditional markets, even as some of them look to extend beyond rural regions, Jeff Heynen, consulting director and analyst at Kagan, said. Strict and complicated usage caps and data plans have long been sticking points for the satellite services.

Related: FCC OKs OneWeb Satellite Broadband Service

Under policies for ViaSat’s current Exede service, for instance, subscribers get a fixed amount each month of “Priority Data” at speeds of up to 12 Mbps to 25 Mbps, and, once those data buckets are used up, it pivots to slower speeds — between 1 Mbps to 5 Mbps. For its higher-end tiers, ViaSat also supports an unmetered “Free Zone” from 3 a.m. to 6 a.m., when traffic tends to be the lightest. ViaSat also lets customers purchase more Priority Data for $10 per gigabyte, or discounts if they purchase buckets of 5 GB, 7 GB or 10 GB.

“In the past, most satellite services that are consumer priced have had hard limits to the amount of bandwidth that you can use,” Dankberg acknowledged. “We’ve been testing, on ViaSat 1, service plans that are virtually unlimited. With ViaSat 2, we’ll be able to make those more common, lower priced and with higher speeds.”

The HughesNet Gen5 service offers data plans ranging from 10 GB to 50 GB per month, before speeds are reduced to about 1 Mbps to 3 Mbps. It also comes with a “Video Data Saver” option that adjusts the bit rate to deliver video in DVD quality. Those customers still have the ability to watch in HD by toggling off the Video Data Saver capability. HughesNet’s data policy also includes “Bonus Zone” hours (from 2 a.m. to 8 a.m.), when the customer can use 50 GB per month of free data rather than pulling it from their monthly service plan. HughesNet suggests that Bonus Zone hours are used to download large files such as movies and system updates.

Achieving success in new markets, Heynen of Kagan stressed, will hinge greatly on competitive pricing and the easing of data caps as they face off with competition from wireline internet service providers, as well as emerging LTE- and 5G-powered fixed wireless options that will be capable of delivering hundreds of Megabits of data per second and possibly Gigabit-class speeds.

“As people use more data and OTT, they are going to be very wary of pushing the boundaries of those data caps,” Heynen said. “They have to find a way to make the data caps as well as the monthly pricing reasonable for the service.”

AT&T, for example, is pushing ahead with a big rollout of fixed LTE services. “Out in those rural areas, LTE is a potential competitive threat,” Heynen said, noting that he doesn’t expect satellite broadband to continue to have the most success in its traditional focus areas, serving areas instead without much landline broadband and servicing airplanes and cruise ships.

“I don’t see the cost structure allowing [satellite broadband ISPs] to compete with a traditional DSL, cable or fiber service,” he said. However, he said he does believe satellite broadband services that are equipped with 100 Mbps capability can offer a “reasonable alternative,” particularly as DSL service struggles to deliver speeds any greater than 25 Mbps.

Licking the Latency Issue
Though satellite broadband is poised to deliver speeds that can match up with some of its earthbound rivals, the issue that’s toughest to overcome is latency, which can impact some interactive apps and services such as VoIP and multiplayer gaming.

According to the Federal Communications Commission’s 2016 Measuring Broadband America Fixed Broadband Report, the median latencies of satellite-based broadband services range from 599 milliseconds to 629 milliseconds, versus terrestrial-based broadband services, which range from 12 milliseconds to 58 milliseconds.

“I can’t go against the laws of physics, but I’d like to,” Hughes’s Gulla said. “But the bottom line is that there’s that traveling distance to and from satellite, and at the current distances, you have latency.”

He said Hughes is upfront about that with customers. “We do our best to explain and ask [customers] what they intend to do when they call us. We’re very clear that if you’re doing first-person shooter games, you’re not going to win.”

Other satellite-broadband initiatives are looking to overcome that latency issue.

One prime example is SpaceX, the privately held aerospace firm run by serial entrepreneur Elon Musk. USA Today, citing comments from Patricia Cooper, the company’s VP of satellite government affairs, reported that SpaceX is planning to launch 4,425 small satellites via reusable Falcon 9 rockets to support a constellation of lower-latency, low-earth-orbit birds, alongside a proposal for another 7,815 satellites that are even closer to the Earth’s surface.

Additionally, Airbus is planning a fleet of hundreds of small, low-earth-orbit (about 750 miles above the Earth’s surface) satellites in a joint venture with a startup called OneWeb. According to CNN, the joint venture is eyeing one launch every 21 days from French Guiana, with the first expected to lift off in about nine months. Service via the partnership, which includes backing from Richard Branson’s Virgin Group, Qualcomm and Japan’s SoftBank, is reportedly expected to start in 2019 and to cover the globe by 2020. The FCC approved OneWeb’s request to deliver service in the U.S. in late June.

ViaSat is also casting its eye toward global coverage with its planned set of ViaSat 3 satellites. The first, which will expand and enhance ViaSat’s coverage in the Americas, is planned to launch in 2019, followed in 2020 by a satellite that will cover the Europe, Middle East and Africa (EMEA) region. ViaSat hasn’t announced when it expects to launch its third ViaSat 3 satellite, but it’s slated to provide coverage in the Asia-Pacific region.

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