Satellite Firms Vie for Broadband Stimulus Funds
PARIS — U.S. satellite broadband providers have voiced skepticism over whether they will get much support from the U.S. government’s broadband stimulus package, but they have nonetheless applied for more than $2.2 billion in loans and grants under the program, according to government application records.
The proposals feature multiple teaming arrangements. EchoStar has applied on its own for a modest program to boost broadband penetration, and also has joined forces with ViaSat Corp. to propose building a dedicated broadband satellite for launch in 2012. The joint venture between EchoStar and ViaSat filed its application under the name Satellite Broadband ARRA Application LLC of Carlsbad, Calif., where ViaSat is headquartered.
This satellite would be in addition to ViaSat’s ViaSat-1 all-Ka-band satellite now under construction and scheduled for launch in 2011. EchoStar and ViaSat are asking for a package of loans and grants totaling about $483 million.
Another EchoStar proposal, filed under the name EchoBlue Rural Broadband LLC of Englewood, Colo., is a joint venture with consumer-broadband provider WildBlue Communications of Denver and also proposes to build a satellite covering the 48 contiguous U.S. states. The companies are asking for $530 million in grants and loans for the project.
WildBlue’s principal competitor, Hughes Network Systems of Germantown, Md., has filed multiple applications for funding that would stimulate market demand for its Spaceway 3 satellite, which is already in orbit. Hughes is building a larger satellite, called Jupiter, that will be similar to ViaSat-1 and is scheduled for launch in 2012. In separate applications covering different projects, Hughes is asking for loans and grants totaling some $650 million.
Other companies that have made filings for satellite systems include:
- SkyTerra of Reston, Va., which is launching two large L-band mobile communications satellites and wants stimulus funding to seed market development among public service agencies.
- Spacenet Inc. of McLean, Va., which has filed separate requests for single-state satellite broadband development efforts in Colorado, Idaho, Texas and Montana.
- AtContact Communications LLC of Sedalia, Colo., which is asking for $286 million in loans for its own satellite, was founded by EchoStar and WildBlue co-founder David Drucker.
The American Recovery and Reinvestment Act of 2009 has allocated some $7.2 billion for broadband projects to be awarded starting this fall under two broad categories.
The first, totaling $4.7 billion and called the Broadband Technology Opportunity Program, is for broadband-infrastructure projects and is managed by the U.S. Department of Commerce’s National Telecommunications and Information Administration.
The second, with $2.5 billion to allocate, is called the Broadband Initiatives Program and is run by the U.S. Department of Agriculture’s Rural Utilities Service.
The two programs together have received requests for about $28 billion from 2,200 applicants.
Satellite industry officials have said the broadband stimulus package appears geared toward fostering local labor-intensive projects such as cable installation rather than wide-scale efforts that would deliver more bandwidth to more people at lower cost.
ViaSat Chief Executive Mark Dankberg reiterated these concerns in an Oct. 1 interview, saying that while ViaSat has crafted “what we think is a compelling proposal,” he is skeptical over whether it will be approved.
The U.S. Satellite Industry Association (SIA), in a Sept. 30 submission to the U.S. Federal Communications Commission, urged U.S. regulators not to focus exclusively on terrestrial technologies if they want the widest possible availability of low-cost broadband.
Responding to the Federal Communications Commission’s notice of inquiry on a national broadband plan, the SIA said any “meaningful evaluation of the ‘wireless ecosystem’ must account” the developments and ongoing investment in satellite systems.
“Where it cost in the tens of thousands of dollars in the 1980s for a terminal with a 2.4-meter antenna providing speeds of only 9.6 kilobits per second, today five megabits per second terminals are commercially available for $400, requiring an antenna only two-thirds of a meter wide,” the SIA said.