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Satellite Primed to Pump Life Into Dead Zones

Jeff Baumgartner
4/19/2011

Several satellite broadband companies have banded together to send a message to the Federal Communications Commission (FCC) as it looks to reform the Universal Service Fund (USF) and pipe more dollars toward the deployment of broadband in unserved areas: We've got the goods.

In joint comments filed Monday by Dish Network LLC (Nasdaq: DISH), Hughes Network Systems Inc. , ViaSat Inc. (Nasdaq: VSAT) and WildBlue Communications (now part of ViaSat) , the group argued that assumptions made in the National Broadband Plan that satellite capacity is limited and should be excluded from fully participating in the proposed, broadband-focused Connect America Fund (CAF) are false. They claim they are not only prepared to add capacity and boost Internet speeds, but believe they can bridge the broadband gap in rural areas faster and more cheaply than wired options. (See ViaSat Acquires WildBlue.)

"[T]here is ... no valid technical reason to exclude satellite broadband providers from participating fully and directly," they noted.

The CAF, born out of the National Broadband Plan, aims to fund the deployment of broadband to about 100 million people who are without it. The plan is to phase out the USF and Intercarrier Compensation starting in 2012 and pump more money into CAF.

The FCC currently defines broadband as 4Mbit/s downstream and 1Mbit/s upstream. The satellite group contends they have capacity plans underway that will not only hit those marks, but exceed them. "Purported capacity limitations provide no basis to exclude satellite broadband," they said.

They point out that the ViaSat-1 and Jupiter satellites are slated to launch in 2011 and 2012, respectively, and that those birds alone would be sufficient to provide speeds of 4Mbit/s down and 1Mbit/s up to about 1 million homes. Those next-gen satellites, they add, will let them ratchet speeds into the realm of 12Mbit/s down and 3Mbit/s upstream.

Why this matters
The satellite guys are jumping into the CAF fray as the government looks to set aside billions to get broadband into unserved and underserved rural areas. Independent rural telcos have complained that a disproportionate amount of those underserved areas are served by major telcos -- so companies like AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) could stand to benefit the most. Those same providers would benefit on the wireless side from using wireless broadband to meet FCC goals.

The satellite group wants a spot at the table before those dollars go out, arguing that they have the capacity and a great financial story for extending broadband into broadband dead zones.

They aren't advocating satellite broadband as the sole solution, but argue that it would be possible to deploy enough orbital capacity to deliver broadband in every unseved home in the U.S. at an overall cost that's well below the estimated $24 billion it will take to fund the CAF.

For more
For a look at the National Broadband Plan, USF reform and the Connect America Fund, please check out:

— Jeff Baumgartner, Site Editor, Light Reading Cable



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