The New Internet Space Race: Google's Final Frontier?

1/21/2015

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One way or another Google intends to deliver Internet from the sky above to people across the world.

Google (Nasdaq: GOOG)'s $1 billion investment Tuesday in SpaceX's bid to launch a fleet of micro-satellites to beam down Internet connectivity from 750 miles above the earth is just the latest sign of how the search giant is putting its money behind alternative ways to deliver the Internet quickly -- and eventually cheaply -- to the globe. (See SpaceX Nabs $1B From Google for Satellite Internet and Comms in Space! Musk Plans Micro-Satellites, Google Leases NASA's Moffett Field.)

What's more, the satellite avenue is just one of three possibilities that Google is betting on right now.

Google bought drone designer Titan Aerospace for an undisclosed sum in April last year. The company's unmanned vehicles are solar-powered and intended to cruise at 65,000 feet for up to five years. The search giant is trying to obtain a permit from the FAA to test this method of delivering Internet from space. (See Google Working With FAA on US Drone License and Forget the Internet, Brace for Skynet.)

Then there's Project Loon, Google's plan to use high-altitude balloons to connect underserved communities. Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) is now working with Google to test the balloons in Queensland, Australia. (See Broadband: It's All Hot Air for Google.)

Of the avenues to global Internet coverage that Google is pursuing right now, Project Loon appears furthest along its development path at the moment.

But while Google has likely spent well over a billion already -- and possibly much more -- on acquiring companies and setting these projects in motion, the goal is to eventually develop platforms that are inexpensive to deploy and can blanket the world with cheaper Internet access.

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Consider, for instance, that one of the credos of SpaceX is making their spacecraft reusable instead of burning up on re-entry like other rockets. The massive cost of space flight comes from building a rocket that only flies once, SpaceX claims, and a "rapidly reusable spacecraft" could cut the cost of reaching orbit by a "hundredfold."

Neither Google nor SpaceX have revealed too about the micro satellite plans yet but it could be that some of the same launch and re-use concepts could come into play here as well.

Of course, developing and delivering these alternative Internet platforms is going to be anything but cheap. SpaceX has estimated it could need up to $10 billion to get the satellites developed, built and in orbit.

Still, that is less the $18 billion that AT&T Inc. (NYSE: T) is expected to blow through in capital expenditure on wireless and wireline networks in 2014.(See AT&T to Buy Iusacell, Plans Lower Capex For 2015.)

Google's attempts to open up alternative Internet delivery platforms have been derided as "toy networks" by some in the communications business. (See Bell Labs Chief Slams 'Toy' Networks.)

There are obviously massive technical and regulatory hurdles to be overcome in the Internet space race. Not least is the fact that all these craft will need powerful two-way radios to connect to access the Internet on the ground and then beam it down on the world from the stratosphere. There's also the question of what radio spectrum could be used for these applications. And as we have seen recently, acquiring the spectrum to carry data ain't necessarily cheap. (See Bell Labs Chief Slams 'Toy' Networks and FCC Mid-Band Auction Nears $45B in Bids.)

Google has rivals in its alt-net endeavors too. Facebook bought drone maker Ascenta for its own airborne connectivity push. Both companies are interested in getting the Internet to more people for less for a simple reason: Both make revenue from serving up web ads over a variety of devices.

The sheer amount of cash that Google appears ready to flash on its vision of an Internet in orbit shows that the search giant is not joking around in this latest race to near-space and beyond.

— Dan Jones, Mobile Editor, Light Reading