Hughes views OneWeb stake as key to FCC broadband subsidies
WASHINGTON — Hughes Network Systems believes it has a chance at winning some of the $20.4 billion in rural broadband subsidies the U.S. Federal Communications Commission is preparing to spend, thanks to the company’s recent investment in megaconstellation startup OneWeb.
The FCC will evaluate satellite internet alongside fiber and other broadband delivery methods in October for Rural Digital Opportunity Fund (RDOF) subsidies meant to finance infrastructure to connect millions of homes and small businesses across the country. The program favors lag-free, high capacity services, a preference that has led satellite operators to offer low-Earth-orbit (LEO) connections in their efforts to win funding.
Pradman Kaul, Hughes president, said the company’s $50 million investment into OneWeb, announced last month, has cleared a path for Hughes to offer LEO broadband for the FCC program.
Hughes, like rival Viasat, remains convinced that geostationary satellites can beam internet less expensively and with higher throughputs than LEO constellations. But the FCC’s emphasis on latency drove the company to offer a LEO solution anyway.
“Although GEO has the economic advantage over LEOs in the rural low-density markets, the RDOF market program could potentially subsidize a LEO service offering due to the latency rules,” Kaul said during an Aug. 6 earnings call. “Based on our recent announcement, we have the opportunity now to augment our GEO offerings with OneWeb capacity and have more favorable positioning for RDOF funding.”
OneWeb, with 74 of a planned 650 satellites in orbit, cannot yet provide service, and is still being purchased out of bankruptcy by the British government and Indian telecommunications giant Bharti Global. The megaconstellation company’s new backers have pledged $1 billion to revive the company, in addition to Hughes’ $50 million stake. OneWeb Satellites, the joint venture of OneWeb and Airbus Defence and Space tasked with building the OneWeb megaconstellation, has continued to build satellites through the bankruptcy of its co-owner and largest customer.
Hughes and OneWeb will compete for RDOF funds against Viasat, which in May outlined a 288-satellite LEO constellation to the FCC as a means to participate in the subsidy program.
Canadian satellite operator Telesat, which is planning a constellation of 300 LEO internet satellites, has urged the FCC to consider its future system for RDOF funds, as has SpaceX for Starlink, which has around 600 of an initial 4,400 satellites in orbit.
Kaul, during the earnings call, said he expects the majority of the FCC’s RDOF funding will go toward deploying fiber and, to a lesser extent, fixed wireless in rural areas with appreciable population densities. A “modest” amount of funding will likely go to the more sparsely populated geographies Hughes pursues for customers, he said.
RDOF aside, Kaul said Hughes expects hybrid networks comprised of satellites in different orbits to become the industry norm as more operators diversify from GEO.
“In this hybrid structure, LEOs can deliver ubiquitous coverage and low latency, while GEOs bring high capacity at the lowest possible cost wherever needed,” he said.
Hughes’ next satellite, the 500-gigabit-per-second Jupiter-3, is projected to launch in the second half of 2021, though the company has yet to select a launch provider.