In the commercial satellite world the idea of hybrid networks has become increasingly important. Hughes Network Systems, for example, now sees itself as a network management firm and offers not just satellite but DSL, cable and wireless access as well. This does not reflect a rejection of the satellite communication market as Hughes’ June order with Space Systems/Loral for a next-generation broadband satellite shows, but it does speak to the end of the satellite-can-do-everything-better mindset. It is now recognized widely that satellites, like all communications technologies, have strengths and weaknesses.

Hybrid networks involve the use of different communications technologies in an integrated network that allows each to be used where it offers the most advantage while mitigating its weaker aspects. So what does this have to do with consumers? Well, consumer-focused satellite firms also are moving in this direction.

The first consumer- orientated satellite industry segment to successfully deploy hybrid networks was digital satellite radio in the 2001-2002 time frame. Unlike fixed installations such as VSATs and larger dishes, which can be sited to avoid terrestrial interference, the mobility of satellite radio makes it vulnerable to loss of signal cased by terrestrial obstructions such as city canyons and highway overpasses. Both XM Satellite Radio and Sirius Satellite Radio developed infrastructures designed to proactively ensure a high quality of service. Because the sort of demands that can be made of more sophisticated customers with deeper pockets are not feasible in a consumer market, both XM and Sirius used ground-based repeaters to bolster their coverage. These repeaters retransmit the satellite signal, providing a terrestrial radio-like signal that reduces instances of loss of signal caused by terrestrial obstructions in the area — generally ones with high population density.

The success of satellite radio’s repeaters, retransmitting the satellite signal in the same satellite frequencies, gave rise to the idea of a similar approach for satellite telephones. ICO and Motient (which had founded XM) asked the FCC to allow them to deploy a similar terrestrial technology known as ancillary terrestrial component (ATC) to provide voice service with a combination of satellites and cell towers, all using the same satellite frequencies. This authority was granted in 2003, and there now are at least five companies preparing to enter the North American ATC market. Again, the purpose of ATC is to reduce the load on the satellite tower while retaining its breadth of coverage. This approach has already been pioneered in the Middle East by Thuraya, which offers plans allowing the use of existing cellular networks as well as satellite-based calling.

This approach has been a financial success but differs from ATC in that it does not use satellite frequencies for cellular calls. Thus when Thuraya users make cellular (as opposed to satellite calls) the revenue must be shared with the cellular network provider. ATC offers the possibility that the satellite operator will control the revenue regardless of the signal path, satellite or cellular.

There are many unresolved issues concerning how the relatively small companies with ATC licenses will afford the terrestrial buildout required to support the non-satellite portion of the signal path but regardless, ATC is a classic hybrid network. ATC uses satellite where its more expansive bandwidth has a higher value and cheaper terrestrial alternatives where they are feasible. It seems likely that this reduction in the use of expensive satellite resources will allow something close to the original vision that propelled Iridium and Globalstar, allowing a properly equipped individual access to voice communications anywhere on the North American continent.

At the same time, the hybrid nature of the network will avoid the overuse of satellite resources that made the original satellite phones uneconomical and forced both companies into bankruptcy. On a more cynical note, it also gives the companies involved something of value to sell if things go badly. Many observers have wondered what ATC frequencies are worth but everyone agrees that the possibility of terrestrial use makes them more valuable than purely satellite frequencies.