By James Careless

There was a time when satellite and terrestrial networks were viewed as incompatible enemies, constant competitors eager to steal each other’s traffic and garner the most marketshare.

No longer. Today, saner heads realize that both satellite and terrestrial networks have their places. Specifically, nothing beats satellites for delivering point-to-multipoint coverage, especially when the coverage area is vast and the number of receive sites are counted in the hundreds or even thousands. Meanwhile, terrestrial lines are the most cost-effective way to route point-to-point traffic.

Individually, both transmission systems have their strengths; in combination, they are unbeatable. This is why satellite carriers and service providers have are now offering hybrid networks.

Most of the global satellite operators today are providing ground and space segment capacity, giving customers what they hope is a complete turnkey solution. Regardless of industry segment, customers care about getting their information from point A to point B in the most seamless way possible. Also, they prefer to deal with as few transmission providers as possible, so being able to provide global connectivity through a diversified platform has now become a competitive offering for satellite service executives.

"Immediately after we were privatized, we realized that the industry trend was toward hybrid networks," says Amer Khouri, Intelsat’s senior vice president of strategy and global marketing. "This is because customers really don’t care how their data is delivered; just that it is delivered quickly, reliably and as cost-effectively as possible."

To meet this demand, Intelsat launched its GlobalConnex hybrid network service for PTTs and ISPs in 2002. With GlobalConnex, satellites are used to backhaul traffic between points where connecting fiber networks do not exist. In the same vein, Intelsat sends GlobalConnex traffic over fiber when it is cost-effective to do so.

To support GlobalConnex, "We use five Intelsat-owned or leased teleports in the United States, Europe and Asia," says Khouri. "These are linked to redundant fiber connections spanning the Atlantic, Pacific and Indian Oceans and to fiber networks in the continental United States." In turn, the fiber optic networks are connected to Points of Presence (PoPs) in "carrier hotels" worldwide, all running in ATM configurations using the Internet Protocol (IP) standard. "We also have video PoPs located in New York City, Los Angeles, Hollywood, and in major sports venues that run on MPEG 2," he says.

By moving into fiber, Intelsat has been able to satisfy national PTTs, which remain among its biggest clients. "The PTTs want to reduce cost and complexity by focusing on their core terrestrial businesses, leaving their international connectivity to be handled by ‘carriers’ carriers’ such as ourselves," Khouri says. "Having hybrid networks allows us to do this for them cost-effectively."

In the same vein, Intelsat’s hybrid networks provide an affordable way for ISPs outside of the United States to connect to the U.S. backbone, without the expense–and in some countries, the bureaucratic headaches–of installing and managing their own satellite earth stations. Meanwhile, such networks like Intelsat’s make it easy for broadcasters to transmit video worldwide, whether for news coverage or international program distribution.

For Intelsat, the biggest challenge in "going hybrid" was hiring the necessary IP people for the job. "Once you have the expertise in-house to plan, deploy and manage IP-based networks, the rest is pretty straightforward," Khouri says. "We have a pretty reliable system in place right now."

Since going online in 2002, Intelsat’s GlobalConnex hybrid network has signed up more than 200 customers who access the system from 700 different sites. "We typically carry about 3.2 gigabytes of traffic over GlobalConnex at any given time," says Khouri. "That is more traffic than could be carried on a fully-used satellite."

Similar to Intelsat, SES Americom has increased its hybrid offerings. When the bankrupt U.S. fiber optic carrier Verestar went up for sale in 2004–a victim of the telecom crash–SES Americom snapped it up for $18.5 million.

By purchasing Verestar, SES Americom has created a hybrid network that leverages the best of satellite and fiber. Specifically, with five earth stations on the east coast, two on the west, and one in Colorado–bolstered by earth stations in Luxembourg and Switzerland–SES Americom has robust, high capacity satellite access to the world. Meanwhile, thanks to the fiber optic networks acquired through Verestar, SES Americom also has direct fiber connecting Los Angeles; San Francisco; Seattle; McLean, VA; New York City and Newark, NJ; plus transoceanic terrestrial links to London and Zurich.

"We were doing hybrid network carriage before we acquired Verestar," says Bryan McGuirk, SES Americom’s senior vice president of North American media services. "However, adding Verestar to our company has helped us in a number of ways. For instance, the people we inherited have IP in their DNA. In combination with Verestar’s hardware, software and fiber, they have been able to jumpstart SES Americom in this crucial protocol."

According to SES Americom, its customer base is indeed benefiting from the hybrid solution it offers. "For instance, it is now easy for our customers to move video internationally using SES Americom, because we can handle every step of the transmission using fiber and satellite. In contrast, these same customers had to run around to book fiber connections before we offered this service, which wasted a lot of their time. Now, as a true ‘one stop shop,’ we can set up the paths they need fast," adds McGuirk.

Ironically, moving into fiber has also been good for SES Americom’s satellite business. "By having our teleports connected to major fiber networks, we have been able to drive a lot more business to satellite," he says. "Fiber connectivity is proving to be good for the entire company."

Clearly, SES Americom is committed to being a hybrid carrier. This begs the question: should all satellite carriers "go hybrid"?

"I cannot speak for the entire industry, but I can speak for SES Americom," replies McGuirk. "By taking the hybrid network approach, we are now able to give our customers access to seamless, comprehensive and cost-effective transmission solutions. Moreover, we can do it all for them. They no longer have to buy satellite connectivity here and terrestrial connectivity there, and so forth. Meanwhile, having access to fiber has opened us up to a whole new range of satellite newsgathering (SNG) customers because our hybrid system is the most cost-effective and efficient way for them to get their video back to their networks. Frankly, going hybrid is proving to be very good for business."

Like satellite carriers, content service providers have also gone hybrid, but at times this has seen a slower migration. Microspace Communications Corporation of Raleigh, NC, for example, has traditionally kept its focus on one-way business television by satellite applications, to the exclusion of all else. "In fact, if we identified a potential business TV application that we thought was a pure two-way play, we passed on it," says Greg Hurt, Microspace’s director of sales and marketing.

Sticking to one-way business TV has not hurt Microspace. Throughout the years it has developed a client base that includes Muzak, Morgan Stanley, John Deere, LodgeNet and WSI Corporation, plus third-party providers serving government clients such as the Environmental Protection Agency, the Federal Beauro of Investigation and the Federal Avaiation Administration. Still, even for the most basic of one-way users, Microspace executives began to see the benefit of providing them with some form of return channel.

"Imagine that a company is using one-way satellite TV to deliver training," says Hurt. "How can they be sure that employees at remote sites have actually viewed the content and paid attention to it if they do not receive some form of confirmation? It can be as simple as a text response over a 56 kbps dial-up line or even an e-mail, just as long as it proves that employees are taking the training being broadcast to them."

With this in mind, Microspace began to see the logic of providing customers with two-way communications; however, given that the return path responses were low bandwidth, it just did not make sense to start selling two-way satellite systems. That would be much more than Microspace’s customers would need, and it would force the company to add expensive, unnecessary spectrum and data routing systems to its operations. "Besides, there are lots of satellite/terrestrial carriers out there who are doing this as well as we could," says Hurt. "We see no point in reinventing the wheel."

It was at this point that Microspace decided to adopt the hybrid network approach: using satellite to transmit video programming to its customers with a terrestrial return path for their remote staff to acknowledge and respond to this programming. This said, the company did not want to spend millions acquiring its own fiber optic networks, because the cost would have to be passed onto its clients. Instead, Microspace decided that conventional telephone lines and the public Internet were good enough for its return paths, a strategy that kept costs low for its customers while adding the two-way connectivity they needed.

"We let our customers decide what kind of return channel they want, and we let them make the arrangements for connecting their remote sites to our office," says Hurt. "This lets them decide whether they want to use 56 kbps telephone dial-up, the Internet, or even lease their own dedicated T-1 lines. But it is all up to them. We do make sure that whatever return paths they choose connects to our system so that we can close the loop, but staying out of the terrestrial provisioning market helps keep our costs down and allows us to keep our clients’ costs down as well."

BT Media and Broadcast (BTM&B), formerly BT Broadcast Services, is also no stranger to hybrid connectivity. BTM&B integrates BT Rich Media, which develops channels to market for digital content. In addition, it recently unveiled plans to establish a truly global capability with the development of digital media hubs that will be operational within 12 months in continental Europe, the United States and Asia.

This global offering and new structure will build on BTM&B’s investment in its U.K.-based ‘BT Mediahive’ digital content management capabilities, enabling it to capture, store, manage and distribute any type of media file, including video, audio and still images and transport it through its integrated worldwide network of fiber links and satellites which incorporates dedicated satellite space and fixed and mobile uplink facilities to ensure that video, audio and data can be carried digitally from virtually any spot on the planet to almost any other.

The company’s capacity and facilities are substantial. For example, its fiber network in the United Kingdom and overseas extends for thousands of kilometers. The BT Tower transmits more than 100,000 hours of video traffic every day to and from the United Kingdom. Likewise, BTM&B offers global coverage and connectivity in conjunction with its satellite uplink providers around the world.

This enales the company to support new channels-to-market for business users, including secure dedicated corporate networks, intranets, the Internet and the streaming of content to PCs and mobile phones.

Why Hybrid Networks Make Sense

As a regular attendee of Access Intelligence’s satellite conferences, I can remember when the mere mention of "hybrid networks" caused gasps among satellite executives and engineers. Allowing the pristine satellite industry to be sullied by using terrestrial infrastructure?

Thankfully attitudes have changed, and just in time. A world that is ever more data-centric has little patience for the competitive niceties of satellite versus terrestrial. It wants its e-mail and Web pages and long distance calls and TV shows now, and as Intelsat’s Khouri points out, they do not care how they get it.

Had satellite executives not embraced hybrid networks, chances are they would find themselves being pummeled by competitors who did. Instead, by recognizing this trend and going with it, companies have positioned themselves in the market’s sweet spot.

All can now deliver the ubiquitous coverage and two-way connectivity that customers demand, with a minimum of inconvenience and expense. This is good, because today’s consumers not only want what they want now but at a great price as well.

For those satellite companies who still have not fully embraced terrestrial links, the future could pose some significant challenges. The reason is that satellite will never beat terrestrial networks when it comes to point-to-point connectivity; anymore than hockey great Wayne Gretzky could ever outplay Michael Jordan in basketball.

As a result, non-diversified companies may find themselves facing the increasingly hybridized transmission market with one competitive hand tied behind their backs, one might say. Moreover, they will be hard-pressed to offer customers the same degree of one- stop-shopping convenience that a hybrid network provider can.

The bottom line is that hybrid networks make sense for the 21st century communications marketplace. In fact, one might say that hybrid networks are the market’s natural transmission application, with satellite-only and terrestrial-only solutions doomed to play a never-ending and unsuccessful game of catch-up.

James Careless is senior contributing writer to Via Satellite magazine.