Satellite companies are doing their best to make sure their technology is considered a viable option to receive Universal Service funding as the high-cost USF program transitions to focus on broadband, as evidenced by a satellite industry ex-parte this week with the FCC.

“Satellite broadband service is the most cost-effective technological solution for over 40% of the unserved households that the Commission has identified,” wrote WildBlue/ViaSat General Counsel Lisa Scalpone in an ex parte summary letter.

The FCC has previously stated that about seven million homes lack access to broadband, which would put the satellite companies’ target number at around 2.8 million households. The commission’s own research focused on a considerably lower number of about 250,000 homes that could be served most economically using satellite.

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The FCC expects to set a minimum bandwidth threshold of 4 Mbps for the proposed broadband universal fund—and although some satellites do not meet that minimum threshold today, several companies including WildBlue/ViaSat should be able to meet that minimum requirement using satellites launched this year.

Some have questioned why satellite companies should receive Universal Service funding because their costs of serving each individual customer are virtually identical, regardless of where each customer is located. Terrestrial –based technologies, on the other hand, are considerably more expensive to deploy in sparsely populated rural areas or in areas with rough terrain—and the aim of the USF program traditionally has been to help cover costs in high-cost areas.

Satellite providers argue, however, that if they can obtain funding through the USF program, they will be able to deploy higher-capacity satellites and make other network upgrades sooner.

The FCC appears to be favorable to allowing satellite providers to bid in the reverse auction proposed as a means of identifying a single carrier that would provide broadband service in areas that currently cannot get broadband at speeds of 4 Mb/s. Organizers of a recent FCC workshop on Universal Service reform invited satellite and wireless providers to conduct demonstrations, but providers of fiber-based technologies were not invited—probably because the FCC views fiber as a more costly option. The same FCC study that said 250,000  homes could be most economically served using satellite also found that about 90% of unserved homes could be most economically served using wireless service at 700 MHz.

If the FCC opts to allow broadband Universal Service funding to be used for satellite broadband, it wouldn’t be the first time a government-run program has given money to satellite providers. Satellite companies also garnered about $100 million in funding through the broadband stimulus program.

 

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9 thoughts on “Satellite Broadband: We’re Best Option for 40% of Unserved Broadband Homes

  1. Giving money to sat companies to subsidize their own (poor) product is a waste. The USF needs to be focused on bringing higher levels of service to people if we are indeed switching it from telephone bills to broadband bills, and honestly satellite internet is a baseline above which almost every means of internet transport stands.

    One big problem that current satellite providers won't be able to solve is that of latency. VoIP over sat is a disaster because current techs have latency varying by hundredsof milliseconds and averaging over a thousand in some areas, or maybe as low as 600. Even with better birds in the air, physics dictates that satellite internet will have higher latency than a properly managed terrestrial network, wireless or wireline.

    Then again, current packages by Hughes and WildBlue can't even meet the 4 Mbps down, 1 Mbps up requirement imposed for funding, so maybe we don't have too much to worry about.

    1. Correction: Hughes now has a plan that meets 4/1 requirements. It's $350 per month for 5/1 access and you can download at most 800 MB over a 24 hour period, with 2am-7am Eastern Time exempted. So, assuming you download only during peak hours (speeds aren't guaranteed between 2a and 7a), you're sitting at 24GB of downloaded data per month for $350. And you thought that cellular companies were bad…

  2. There's some customers so remote and/or so costly to serve (i.e. over $20K/customer passed) that I'd rather shell over $40/month in subsidies than support a copper or fiber build.

    1. $20k per customer served by what tech? If you're that remote and not in a blind valley, set up a high-gain point to point 5.8 GHz wireless link or two. You can buy dozens of miles of those for even $2k.

      1. That would be copper or fiber. I know from our rural fiber builds that we should budget at least $10K/mile and that normally it's closer to $15K/mile, and that's in the Plains. So if the customer density is low or anywhere rocky or in difficult terrain, that customers cost 5 digits each to build to.

        Sometimes the terrain doesn't allow for wireless (i.e, hilly areas).

        1. $10k to $15k per mile is reasonable; TWC wanted $9k to build 2215 feet to me on coax.

          But anyway, the sat providers' 40% figure for unserved homes that would be best served by them is still WAY off when you add "junk band" fixed wireless to the equation, which works quite well actually, LOS permitting. I'm pretty sure that the number of unserved households with LOS issues is much less than 40%.

          1. One thing that's not been done is a sampling of the unserved to identify how many could be solved with what technology.

  3. Greetings from Finland. I do wander, however, what are the dangers of using wireless to transfer huge amounts of data via the air. I personally, do not feel very calm about someone transferring, e.g, 100 Mb through my head without me having any control of it. This hasn't been truly researched into. Things you cannot see are usually ignored…

    1. @HAkukonemainonta Are you serious? Countless studies have been performed to examine the effects of RF as well as the heat from radiating devices on humans and human tissue. http://scholar.google.com/scholar?hl=en&q=Eff
      Additionally, satellite signals are much weaker than cellular or radio. Hence the use of a dish rather than a stick antenna.

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