Telesat Canada is so confident that its consumer satellite broadband service will be commercially successful when it is introduced in Canada this year that it is ordering a broadband-dedicated satellite to keep pace with the expected market.

In a declaration that caught many industry officials by surprise, Telesat Canada Chief Executive Officer Larry Boisvert said Telesat likely will order a Ka-band satellite for two-way consumer broadband links by the end of the year.

The satellite would supplement the Ka-band capacity on board the Anik F2 satellite, a large spacecraft carrying Ku-, C- and Ka-band transponders that was recently added to Telesat’s in-orbit fleet.

Anik F2’s Ka-band payload is being used to debut consumer broadband service in Canada and, through WildBlue Communications Inc. of Denver, in the United States. Telesat and Wildblue have ordered two-way consumer broadband terminals from ViaSat Corp. of Carlsbad, Calif., and have been testing the equipment in Colorado and Canada throughout the winter.

The tests were considered critical in determining whether ViaSat’s SurfBeam hardware has been cleansed of the start-up bugs that delayed the introduction of similar gear — but for Ku-band links, not Ka-band — in the Middle East.

In addition to verifying that the SurfBeam terminals were free of bugs, the testing done this winter gave Telesat and its partners in Canada who will provide the service to consumers an opportunity to gauge the much-feared effects of rain and snow on Ka-band transmissions.

Paul D. Bush, Telesat vice president for broadcasting and corporate development, said the terminals appear ready for prime-time. “We have been testing about 60 terminals for the past two months and performance has been good,” Bush said. “We are now confident of system roll-out this spring and we want to have 10,000 to 15,000 terminals in service by the end of the year.”

For Boisvert, whose optimism about the imminent introduction of the consumer Ka-band was the talk of the Satellite 2005 conference here March 22-25, “the only issue now is the availability of terminals.”

In the coming weeks, attention will focus on whether ViaSat and its designated terminal builder, MC Assembly of Melbourne, Fla., are able to keep pace with the early demand for hardware needed for the Telesat and WildBlue services.

ViaSat and Telesat officials say the price of the early SurfBeam Ka-band terminals, which are being ordered in batches of several thousand, is between $600 and $700 each at the factory gate. This price is expected to fall quickly to $500. Both WildBlue and Telesat’s service providers are likely to absorb part of that cost to be able to provide hardware to the retail consumer at less than $500.

Chris Leber, ViaSat’s vice president, said MC Assembly is fully capable of meeting the expected demand this year and next. “Volume production is planned at MC Assembly and this is not a stretch for them,” Leber said.

ViaSat officials conceded the early difficulties in the introduction of SurfBeam consumer-broadband terminals in the Middle East by Orbit Data Systems Ltd. of Riyadh, Saudi Arabia.

In a deal brokered by Intelsat Ltd. of Washington, Orbit ordered up to 50,000 SurfBeam terminals starting in late 2003 but then stopped shipment when customer complaints piled up.

ViaSat officials say that while the hardware did require modification, much of the problem that Orbit encountered in the early going related to a misjudgment of how customers would use the service. Instead of limiting themselves to family-type e-mailing and Web surfing, Orbit customers quickly flooded the system with bandwidth-heavy uses including videoconferencing and large file-sharing. That ate up the allotted satellite capacity and system throughput limits, frustrating large numbers of users, according to industry officials.

Leber and Marc Agnew, ViaSat vice president for broadband systems, said the Orbit experience is not likely to be repeated with Telesat and WildBlue. Lessons learned with Orbit will be applied to demand allocation, and the fact that the Canadian and U.S. companies are using Ka-band satellite capacity gives their businesses much more room to accommodate demand surge.

Telesat’s Bush declined to say who in Canada would be directly selling broadband terminals to the public beyond saying that three companies have been selected and that Telesat will not enter the retail side of the business.

The Ka-band capacity available to Telesat aboard Anik F2 is sufficient for 150,000 users, which Telesat officials clearly believe is not enough.

Boisvert said there will be no government subsidy granted for SurfBeam terminal purchases, despite the fact that Industry Canada is promoting the service for telemedicine and tele-education.

Bush said Telesat Canada will be applying to the Canadian government in the coming weeks for authorization to launch a Ka-band satellite into the 118.7 degrees west longitude orbital slot. Whether an auction for the slot would occur afterward — a new company called Ciel is now competing with Telesat in Canada — is unclear. Bush said the government’s response to the Telesat request is likely to be delivered by this summer.

Bush said it should not be surprising that Telesat, while long known as a cautious company, will be pioneering broadband by satellite.

“Canada was the first nation to have a domestic satellite system, and we were among the first to use Ku-band,” Bush said. “Our position is that, with broadband, we are now where we were with direct-to-home satellite television 20 years ago. Remember when people said, ‘Who would want an ugly satellite dish on their roof ?’ This is big bucks, there’s no doubt about it. It’s not for the faint of heart.”

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