by Douglas Graham

The year 2003 was no banner year for satellite broadband but it is the prelude for stronger business waters. In 2003, however, satellite remained a ship without sails. While the vessel did not founder, cost hindrances and Wall Street reticence did slow its journey across the seas of commerce. Early commercial satellite initiatives that failed cast a shadow over the industry. In 2003 the industry realigned its marketing strategy. Faced with money problems and sluggish consumer adoption, it limited its presence in old territories and abandoned some altogether.

While this might strike some as bad news, it is actually not. The industry is now poised to advance on the worldwide commercial marketplace. Small Office/Home Office and small- to-medium enterprises represent fertile areas of opportunity, especially in the United States, which has come to increasingly rely on satellite to supplement terrestrial broadband services. Mega-firms often employ private networks and Intranets to communicate with outpost operations around the planet. With Digital Subscriber Line (DSL) and cable there is always the possibility that an important message will be blocked by some mishap occurring along the "last mile connection." With Very Small Aperture Terminals there is no last mile threat. Transmission is secure, simultaneous and instantaneous.

Residential satellite broadband remains a valid alternative to DSL and cable, where such services are in short supply. The industry is well established in rural America, Europe and in many areas of the developing world. The ubiquity of the technology, and the fact that it is not tethered to the terrestrial infrastructure, pretty much guarantees its continued presence in these regions of the world in the years to come. All of these factors augur well for the future of satellite broadband in general, and in 2004 the show will get on the road.

Broadband In The Sky

There were definitely high points in 2003 with one of the most promising being "Connexion by Boeing," an airline-based, broadband Internet offering providing passengers with instantaneous access to the Worldwide Web, e-mail and even television programming. Operating on Ku-band transponders via satellite, this "Internet in the Sky" could prove very lucrative to providers, and in the bargain give the ailing airline business a much-needed shot in the arm. Part of the service’s profitability for satellite providers stems from the fact that it will operate over existing satellite infrastructure. This means the industry will earn revenues from usage fees without the taxation of overhead. For airlines, Connexion by Boeing will represent yet another value-added amenity through which they can attract more trade. According to Boeing executives, the service will see wide deployment in the next two years.

Pre-launch trails with British Airways yielded better than expected results. The service was deployed in First Class, World Traveler Class and Premium Economy. Business passengers with laptops favored the service over leisure travelers as it offered them the opportunity to work while flying. Usage rates were set at $20 to $30 per flight, and according to British Airways spokesperson Sara John, takers far exceeded the number anticipated.

In addition to Boeing, the Seattle-based Tenzing Communications is another company deploying in-flight Internet, though its service offering was initially limited to e-mail and short messaging service. Recently, Tenzing partnered with Verizon Communications on a new Internet product called JetConnect, which provides users access to Web pages containing news, sports and weather, as well as e-mail.

Things To Come

According to Futron Corp. Senior Analyst Janice Starzyk, financing for much anticipated Ka-band satellite services such as Wildblue and Spaceway are now in place for launch dates that will take place sometime in 2004. This development will be very good for satellite broadband, as it will transition this sector into the next phase of its evolution.

"One of the big triumphs of 2003 was the resurrection of Wildblue from the dead," Starzyk says. "The program had pretty much lost funding, but now that financing is lined up, it should move forward. Many Ka-band projects did not evolve beyond the drawing board in 2003 and earlier, due mainly to cost problems. Spaceway, the Ka-band service from Hughes Network Systems, was delayed but not cancelled. Wildblue and Spaceway were the two big coups of 2003 mainly because they survived. Apart from that, there wasn’t a lot going on in 2003. The year was not a total bust however, because it set the tone for things to come. In 2004, the satellite industry could see the launch of several Ka-band services and from that point forward satellite broadband may finally get off the ground."

Douglas Graham is a contributing writer to Via Satellite.