WASHINGTON — The U.S. satellite broadband industry has only itself to blame for the fact that the U.S. government’s broadband-stimulus package treats satellite delivery as an unattractive, last-resort alternative, according to the top official of a company that is staking much of its future on the satellite broadband business.
ViaSat Inc. Chief Executive Mark Dankberg said early satellite consumer broadband efforts in the United States, to make their profit goals, loaded too many subscribers onto a single transponder, resulting in poor service that tainted the young technology’s image among U.S. policymakers.
“From the U.S. government’s perspective, satellite is a failure,” Dankberg said March 18 here during the Satellite 2010 conference. “That is totally due to perceptions established because of the race to stuff as many people as possible on a transponder. The service was not good, and that gave satellite broadband a poor reputation.”
Dankberg said he recalls when satellite consumer broadband providers used to brag about how many thousands of subscribers they could squeeze onto a given 36-megahertz transponder. With a satellite transponder leasing for $1.5 million or more per year, the economic incentive was clear.
But the performance suffered as insufficient bandwidth was provided to customers, Dankberg said. More recently, the two current satellite broadband leaders, WildBlue Communications of Denver — which ViaSat purchased in 2009 — and Hughes Network Systems of Germantown, Md., have used their Ka-band satellites to offer customers more bandwidth.
It is still not nearly enough, according to Dankberg, and this accounts for ViaSat’s decision to build its own satellite, called ViaSat-1, to be launched in early 2011. Hughes also has ordered a high-throughput Ka-band satellite, called Jupiter, to be launched in 2012.
ViaSat-1 and Jupiter, both under construction at Space Systems/Loral of Palo Alto, Calif., will provide more than 100 gigabits per second of capacity, which is more than 100 times the capacity offered by a conventional Ku-band satellite.
Paul Gaske, Hughes’ general manager for North America, said March 18 that these new-generation Ka-band satellites should enable satellite broadband to keep up with the ever-increasing speeds offered by terrestrial technologies.
But they will not reach the U.S. government’s announced goal of providing 100 megabits per second of broadband to 100 million U.S. homes. Gaske also said that despite the government’s goal of providing fiber and other terrestrial broadband links to all Americans, Hughes believes that at least 10 million U.S. homes will not have broadband access in the foreseeable future unless they get it by satellite.
Two U.S. government programs have a combined $7.2 billion to spend on broadband infrastructure. So far, only $100 million of that has been reserved for satellite broadband. The rest is for terrestrial technologies, which have the advantage of putting people to work laying fiber.
Numerous satellite industry officials attending the conference here worried that the government’s program unfairly tips the scales in favor of terrestrial links and could threaten deployment of satellite broadband.
Dankberg disagreed, saying “$7 billion is not enough to do much damage” to the satellite broadband market. In a March 18 interview, he said it would take many billions more to deliver high-speed terrestrial broadband to rural communities in the United States.
Maury Mechanick, a partner in the Washington law firm White & Case, said that in Washington, satellite-delivered broadband is “the Rodney Dangerfield of systems: It can’t get any respect.”
“One hundred million out of $7.2 billion is better than zero, but the policy sends a message to Wall Street from the U.S. government: Satellite broadband is not part of the solution. Invest at your peril,” Mechanick said here March 15.
“It’s not an issue of lobbyists,” Mechanick said in explaining the U.S. government’s view of satellite broadband. “The problem is that the politicians are fascinated by downlink speeds that satellites cannot deliver. Also, satellites are not labor-intensive. So what we get is a policy — 100 megabits per second — that will satisfy a few uber-gamers who will take precedence over ordinary people.”
