Spectrum and orbital slots have always been key prizes in the satellite business — much desired and fought over. Battles within national regulatory bodies and at the International Telecommunications Union have pitted existing users against each other and against emerging technologies for prime real estate in the table of frequency allocations. Companies with operational satellites on orbit want to launch replacements with expanded capabilities, and new operators want to put up new satellites in highly congested prime real estate in the geosynchronous orbital arc.
So what’s different now?
For one thing, the dramatic growth in mobile telecommunications worldwide has put greater pressure on the assignment of spectrum for terrestrial wireless businesses as well as satellite services. WiFi, WiMax and UltraWideBand are all now household terms, and each technology is hoping to grow through additional spectrum allocations. At the same time, cellular companies are seeking to expand their offerings with advanced services such as music and video downloads, which in turn require more capacity and, not surprisingly, more spectrum.
Even as satellite systems are collaborating with these terrestrial systems to provide backhaul capacity, they are continuing to compete. Prime real estate in this market is centered around what is commonly called the 2 gigahertz band, which is at the nexus of the L- and S- bands.
These frequencies are not only the focus of a battle between mobile satellite systems, but are of great interest to some U.S. cellular operators as well as to satellite radio operators seeking to expand their local service options.
They are also in high demand for public safety radio operations, which have been forced for years to work within small, incompatible slices of spectrum at lower bandwidths. One of the issues making this so contentious right now is the increased attention being paid to the use of mobile satellite capabilities for emergency response and disaster relief operations.
The vivid images from the hurricanes in the U.S. Gulf Coast and the earthquake in Pakistan validated the importance of satellites’ ubiquitous coverage and ability to operate when terrestrial infrastructure fails or does not exist. While there has long been discussion of the potential of hybrid handsets operating with both satellite and terrestrial wireless services, that potential has not yet been achieved. But even members of Congress have called for additional spectrum to be made available for such hybrid services, claiming they are the most effective for a solution to both emergency requirements and mass-market consumer needs.
The time thus finally appears to have come for these hybrid systems, although it is not clear whether it will be through MSV, GlobalStar, ICO,or TerreStar. Both MSV and GlobalStar now have Federal Communications Commission licenses to augment their satellite systems with ancillary terrestrial component (ATC) services, enabling them to reach into urban canyons and buildings.
And while recent spectrum allocations were granted to MSV and ICO, at the expense of Inmarsat, the latter has not given up the fight, continuing to push the global maritime and defense interests it serves. One might think that such a hot commodity would have a high enough market value to make it something to sell, not give away.
And in a way this might happen, although not to the direct benefit of the U.S. taxpayer, as would be the case if the spectrum were auctioned off as some had argued. In fact if Inmarsat fails in its appeal, it may well end up paying for the spectrum by buying back ICO, which it spun off over a decade ago.
Whichever satellite solution succeeds, it is likely to have a solid terrestrial wireless partner. Because the build-out of ATC infrastructure requires more time and money than building and launching satellites, the most efficient solution will undoubtedly be one that leverages an existing terrestrial tower network. In a recent twist to this satellite/terrestrial hybrid story, reports have the major direct-to-home television players — DirecTV and EchoStar — teaming up with the same kinds of terrestrial tower companies (possibly together with MSV) to provide an integrated offering of wireless broadband with television and Internet Protocol telephony.
What impact this will have on the spectrum wars remains to be seen, but it does take us to the other hot satellite real estate market — the orbital arc — where the new factors in the equation are the emergence of demand for high-definition television (HDTV) and satellite radio. On the television side, HDTV channels take up a lot of bandwidth, and regulatory as well as market pressures are dramatically increasing the number of HDTV channels carried by satellite both for cable head-end distribution, as well as for direct-to-home service distribution.
In North America this has led to a debate as to whether the spacing now required between direct broadcast satellites is in fact greater than it needs to be, and whether additional satellites can be squeezed into the prime slots that provide full coverage of the continental United States. In this case EchoStar and DirecTV are on opposing sides, which is their more natural stance, in a fight that will likely continue through the year. Again, despite the heated interest in this commodity, barring a major change of policy, access to these slots will be granted on the basis of regulatory criteria rather than through a market auction.
In Europe the prime fight this year is over the market for satellite radio services, now that this business has proved so successful in the United States. After years of failed efforts and arguments that Europeans wouldn’t want this service, there are now four contenders. Interestingly, the first to service will likely be an American firm, WorldSpace, which overcame opposition from its Spanish competitor Ondas, to obtain the rights to begin operation at a location currently focused on service to Africa.
As the European market for satellite radio begins to take off, there will undoubtedly be further such battles. Just as in the United States , where satellite radio also uses ATC to expand its reach in urban areas, access to orbital slots will be only the first fight, followed by the search for more spectrum — which brings us back to the spectrum issue, and a clear recognition that these hot real estate markets are not bubbles that will soon burst.
Andrea Maleter is technical director of the Washington-based Futron Corp.