By Theresa Foley

The debate over bent pipe versus onboard processing is picking up steam as the dozen or so satellite broadband projects come closer to fruition. If William Shakespeare had been a satellite broadband engineer, he might have asked, “To bend or not to bend, that is the question.”

Indeed, the prospective broadband companies are trying to determine whether it is more profitable to conduct onboard processing up in the sky at greater expense in satellite cost, or to keep those satellites simple, otherwise known as “bent pipe,” and put the sophistication and money into processing on the ground. In a few years, the winning approach will be evident.

Several operators, among them SES Astra, Loral Cyberstar and GE American Communications (GE Americom), have rejected the notion that onboard processing and advanced beam switching techniques are desirable or necessary for broadband. Broadband can be defined as a service with transmission rates in excess of 1.5 Mbps, according to Telastra, a consulting firm in Palos Verdes, CA.

“The architecture we’re looking at now is spotbeam, but more of a bent pipe than processed. That’s the major difference from our original interest,” says Rick Langhans, GE Americom’s vice president of customer support, engineering and contracts. “It’s a pretty major gamble (to pursue processing satellites), and you want to make sure the fill factor will be high enough at launch.”

SES’s target is residential customers, says Dean Olmstead, SES executive vice president of business development. “In this market, we don’t see much demand for the types of services that require onboard processing,” Olmstead says. “We have to believe people will move to a video chat environment and be willing to pay significantly to do that. But the requirements we see can be satisfied with a bent pipe system.”

Loral Cyberstar also will go with bent pipe satellites. “We believe the ground infrastructure in the United States is sufficient to service spotbeams,” says Neil Bauer, president of Loral Cyberstar.

Skybridge was always planned to be simple with its switching functions carried out by the ground system. “Transparent satellites reduce the technology risk and the cost of the system,” Pascale Sourisse, Skybridge CEO, says. “Putting the technology on the ground reduces the time necessary to build the constellation.” A further benefit is the ability to change the technology on the ground during the eight to 10 year life of the satellites as the needs of the service provider customer base change in that time frame.

Meanwhile, at least three of the Ka-band operators will bet billions of dollars on putting the switching technology into space. Spaceway, Astrolink and Teledesic remain in the category of sophisticated, switched beam satellite systems.

Each Astrolink satellite has 44 beams for user terminals and 14 beams for the gateway earth stations. Celso Azevedo, president of Astrolink, says the processing in space will be very beneficial to the business customers, while the bent pipe systems are aimed at residences. “The difference is the amount of capacity you can take out of the satellite,” Azevedo says. “Bent pipe satellites will cost one-half the price of onboard processing satellites, but the capacity is much less as well. My concern is that the bent pipe satellites won’t offer quality of service, and that will give us a black eye.”

On the investor side of the equation, the big telecom service providers of the world are still playing hard to get, with the exception of Telstra, which has aligned itself with Astrolink. Bob Collet, vice president and general manager for data services at Teleglobe Communications Corp., explains the hesitation of his company, a global telecom service provider that is headquartered in Canada. Teleglobe “is on the fence” as to whether to become a partner, or simply be a customer of new satellite broadband projects because the satellite proponents have not made a strong enough case.

Every one of the ventures has come courting Teleglobe, but Collet says his attention stays fixed on cable capacity and Internet services. Although he likes the idea of increasing spectrum with spotbeam use, the new satellites are “just another access method for Internet.” What would convince Teleglobe to join up? A high return on investment might, but “I haven’t seen anything compelling,” Collet says. “All the deals are different….It requires a lot of analysis.”

In this sense, Collet is correct. While all the satellite broadband proposals are similar in respect to general concept, they differ greatly when it comes to scope, technology and strategy.

Spaceway

Hughes Network Systems is just over two years from the planned launch of its first Spaceway satellites. Hughes committed $1.4 billion more than a year ago to put three satellites–two operational and one spare–over North America by late 2002. Services will be marketed to businesses under the Direcway brand and to consumers under the DirecTV and DirecPC name.

Mike Cook, vice president and general manager of Spaceway, says a decision to put the spare in orbit was based on a need to be able to restore services for corporate customers very quickly in case of a failure. HNS is working on finding partners to expand Spaceway to three more regions: Europe, Asia-Pacific and Latin America. Cook says he expects two of the three regions to have funding in place by year end, and for the European regional partnership to be completed first, possibly by early summer.

The $1.4 billion in funding pays for non-recurring development costs and three satellites. Cook says subsequent satellites will cost one-half the price of the first batch, meaning that funding requirements to add the other regions will be much lower at around $1 billion, much less than the initial investment for North America. The Hughes Ka-band satellite design, with its advanced onboard digital processing, packet switching and beam technology, will be far more complex and capable than most of the competing broadband systems, with the exception of Astrolink.

The satellites’ ability to process and route signals in space means that “we don’t need any gateways. It’s a major difference between ourselves and, for example, Skybridge,” Cook says. The investment in gateways for systems that will route and process traffic on the ground can be in the billions of dollars range. While the design means that users can be served without any ground gateways, HNS will have some gateways to connect traffic into the Internet and to bring traffic into connection points with terrestrial fiber systems, which will be used to connect the regions.

“Our most important success criteria is reaching the lowest cost per bit or megabyte,” Cook says. “The design gives us 10 Gbps raw capacity on each satellite. We think it’s significantly ahead of the competition. Astrolink is the most similar, but by our best estimate, we have twice the capacity. They also have a truly global system, as opposed to a system made up of regions.”

The Hughes approach of packing digital technology onto the satellite also will allow it to perform jobs like multicasting in a unique way, which would involve packet replication on the satellite to send a multicast to all destination terminals, Cook says. But, he adds, if an application is pure broadcast, then HNS will have a “bent pipe” component, perhaps usage of a regular fixed service satellite like those operated by Panamsat, to complement the service and allow for the simple rebroadcast of a signal.

On the content side, Spaceway will rely on Hughes’ partnership with America On-Line (AOL), Cook says. AOL is not an investor in Spaceway but did invest $1.5 billion in Hughes to develop a subscriber base for DirecTV and DirecPC. Those subscribers will be migrated onto the Spaceway system when it is available, Cook says.

Hughes also continues to study the possibility of adding a non-geostationary component to the Spaceway system, but Cook says that will not occur until the non-GEOs are shown to have definitively solved latency problems and be cost effective. He says that non-GEOs as currently designed have delays, or latency, in transmission because of either the use of gateways to interconnect or the use of inter-satellite links to hop the signal around the constellation in space.

Spaceway could end up being first into the market, especially if some of the newly announced systems like ISky fall behind their aggressive schedules for early market entry. Cook says being one of the first Ka-band systems into service is important, although the difference of a year in either direction probably doesn’t matter, since he estimates that 70 percent of the U.S. market will not ever have either DSL or cable access to broadband, leaving a healthy base for HNS and the other satellite players.

Astrolink

Astrolink has raised $1.3 billion, or more than 90 percent of the equity needed to start its four-satellite geostationary broadband system, licensed in May 1997 to operate in Ka-band by the U.S. Federal Communications Commission. The remainder of the $3.6 billion will be raised through the debt market and an IPO.

Astrolink intends to start its service, which will be for businesses and consumers, in 2003. User equipment will cost $1,000 to $8,000, and fees will be based on the amount of usage with three data speed services planned: 400 kbps, 2 Mpbs and 20 Mbps. Astrolink will require several network control centers to be built and 30 to 50 gateways.

The biggest financial backer in Astrolink is the holding-investment company Liberty Media, which committed $425 million in late 1999. The other three partners are Lockheed Martin Global Telecommunications, the original project sponsor and satellite contractor, with $400 million committed; TRW, $255 million; and Telespazio, $250 million.

To complete its funding, Astrolink will likely have a private placement for more equity funding, followed by an initial public stock offering, and then tap the debt markets. Some of the financing will be completed this year, with the help of CS First Boston, Azevedo says. “My personal priority this year is to build the business, with regional sales offices and a strategy for sales,” Azevedo says.

Loral Cyberstar

Loral has been serving ISPs with satellite access to the Internet backbone since 1996 and considers itself to be the leader in this business, counting more than 140 ISPs in 30 countries as its customers. Based on that experience in Internet services, Loral adopted a new broadband strategy in February for its Cyberstar company, which will now pursue streaming media services and consumer Internet in addition to its current business lines.

Neil Bauer, Loral Orion president and CEO, says the Cyberstar network already has the servers and routers in place for interactive IP data delivery and Internet services. “We have the skill set and experience to move IP data. We know how to do things like multicasting and taking media streaming to the end user. Now we’ll go to a delivery platform, the last mile solution, which is Ka-band,” he says.

Cyberstar’s consumer service for Internet access will be capable of serving 10 million customers over its first four years. The two-way, Ku-band access service, at speeds of 1.5 Mbps downlink and 128 kbps up, will be available in early 2001 using transponders on Telstars 4 and 6. Later, Cyberstar will provide a Ka-band service offering, and will have a hybrid satellite/fiber network with Ka- and Ku-band. Two Ka-band satellites are under construction at Space Systems/Loral’s (SS/L) factory in California for launch in 2002 and 2003. The four-satellite system will use 14 gateways to link by fiber to the Internet. Loral will need $3.5 billion in capital to pay for the project. Some of the $400 million raised in February from the sale of convertible securities will provide money for the venture.

Bauer says Cyberstar will sign on strategic investors to provide early money, and the public markets will be tapped later.

Loral’s largest partner in Cyberstar is Alcatel, which has an 18 percent stake. Alliances include PSINet, which uses Cyberstar for U.S. to South America traffic; Realnetworks, which is trialing media streaming to European ISPs; and Akamai, which has a joint marketing agreement for delivery of web content to ISPs.

For the Ka-band capacity, Loral plans to serve as wholesaler. Loral Cyberstar took in $85 million in data services revenue in 1999, up from $40 million in 1998. The EBITDA loss was $8 million, compared to $13 million in 1998. Loral spent $27 million developing its data services business in 1999.

Skybridge

The 80-satellite Skybridge constellation differs from other broadband satellite projects in its low earth orbit, its use of the Ku-band and its goal of “last mile” connectivity as its primary mission. “We have a unique focus, which is to provide interactivity and broadband capacites on a worldwide basis,” Sourisse says.

Skybridge is backed by Alcatel, with a list of partners that includes Boeing, which is also the launch supplier, Thomson Multimedia, EMS Technologies, Loral, Com Dev, Mitsubishi Electric, Sharp, Toshiba, SriW of Belgium, CNES and Snecma. The Australian operator Telstra has signed an agreement in principle to become Skybridge’s service provider.

Skybridge has spent the last year or more trying to complete that list of strategic partners so that it can start construction of the system. In late February, Sourisse said discussions continued with more potential partners but no more information could be disclosed. “Things are moving in a very positive manner. It’s taking time but that’s to be expected with a project of this size,” she says.

In the meantime, to reduce cost and simplify the system, Skybridge has optimized the number of gateways from 200 to 140 after deciding that in some places, one gateway could serve more than one terrestrial cell of ground coverage. The satellite system is focused on 200 cells on the ground with a diameter of 700 km each. The gateways cost an average of $10 million each, so cutting out 60 of them results in large cost savings.

From low earth orbit, the Skybridge constellation will have latency of only 30 milliseconds, giving it an advantage in respects over geostationary systems with their 500 millisecond signal delay. Skybridge has data rates of 20 Mbps down and 2 Mbps up per residential user and three to five times these capacities per business customer. Skybridge expects telecom operators to charge $30-$40 a month, to be on level with terrestrial connections. The company believes that by 2005, 400 million Internet users will be buying broadband services. This group should spend over $100 billion a year.

Teledesic

Teledesic was founded in 1990. It received its FCC license in 1997 for a low earth orbit, Ka-band satellite system that was to have 288-satellites, although a redesign of the constellation is now believed to be in the works. Teledesic has more than $1.5 billion in funding commitments. Its chairman, Craig McCaw, a billionaire and telecom entrepreneur, stepped in to lead a takeover of ICO Global Communications after its Chapter 11 bankruptcy filing in 1999. McCaw also tried to gain control of Iridium, to blend all three into one company for a range of mobile and high speed Internet services, but backed out of the Iridium deal at the last minute in March to focus on data-centric Teledesic and ICO.

Teledesic’s original plan was to provide services to Internet users at speeds of 64 Mbps down and 2 Mbps up. The system was going to cost more than $10 billion. The data rates using the ICO satellites should be in the range of 128 kbps or slightly higher, and many aspects of the new company’s business plan and technology were being sorted out during the spring, making Teledesic’s outlook uncertain

Netsat28

U.S. Ka-band licensee Netsat28 plans to orbit its first satellite in October 2002 to start broadband service to small businesses and residential users with data rates of 30 Mbps down and 2 Mbps up from the user’s premises. EMS Technologies of Norcross, GA, is acquiring the majority stake in Netsat28, investing in the satellite and supplying payload equipment. SS/L was selected as prime contractor for the satellite.

Jeff Leddy, Netsat28 vice president, says Netsat28 is not behind the other broadband projects, even though it was only announced in January, since work on the satellite started four years ago. He notes that Netsat28’s launch date is earlier than most of its competitors. “Our schedule is realistic, and our architecture is simpler than other systems,” he says. With one satellite in orbit and one backup on the ground at an estimated $500 million investment, costs are below many of the competitors as well. EMS is providing initial funding, and Leddy says he could not discuss the other financial elements.

Netsat28 claims that its unique advantage comes from a special spotbeam design for its satellite. Forty-two beams are narrowly focused on certain geographic markets, covering the biggest U.S. cities, and 16 larger beams overlay the U.S. market. Because these spotbeams are isolated, instead of adjacent and overlapping, the satellite can reuse all of its bands in every beam, as opposed to other systems where beams are adjacent and only partial frequency reuse can be achieved because beams that touch or overlap cannot use the same frequency.

Netsat28 says this design is patented and will give it a greater capacity at lower cost than its competitors’ designs. “The higher capacity allows us to be more flexible on pricing,” Leddy says. “It’s bent pipe, yet the capacity is higher.” Advanced ground systems can compensate for the lost flexibility from leaving onboard processing off the satellites, he says.

Isky

ISky plans to launch its first broadband satellite for Internet access in the Americas in the third quarter of 2001. The company claims to have raised one-third of the $750 million in financing for its first two satellites, ground infrastructure, subsidies for equipment and operations funding. Arianespace has made a $100 million commitment; a group that includes Liberty Media, TV Guide and a prominent venture capital fund also has put $50 million into the project.

Donaldson, Lufkin and Jenrette and Morgan Stanley are working to raise more money for ISky. SS/L is the satellite supplier.

“Our approach is based on research on what the consumer wants and building the technology backwards from that,” says Brad Greenwald, Isky’s vice president of marketing and business development. “We made sure we weren’t aligned in any way with a satellite manufacturer” so that the company wouldn’t be unduly influenced to buy unnecessary technology. The result is a bent pipe satellite that keeps costs low. “Technology will evolve and we want our smarts on the ground….The Internet is the destination. We just want a way to connect customers to it,” Greenwald says.

The business plan is modeled after satellite television, and ISky intends to keep monthly prices at $35 to $40 a month or less, to be in the same range as cable. The first two satellites will serve several million subscribers, and ISky wants to grow to four or five satellites eventually.

Ge Americom

GE Americom uses Ku-band capacity for ISP backbone connect and multicast services today, and has licenses and plans to adopt Ka-band satellite technology at some point, but its plans are not as well developed as the other U.S. operators. The multicast services are domestic, but the Internet backbone service is international, mainly focused on connecting the Americas.

Later this year, GE will make decisions about whether to buy dedicated Ka-band satellites or just add Ka-band payloads to Ku-band satellites, according to Langhans. A Ka-band payload contract awarded more than a year ago to Harris Corp. by GE is still in the design phase and has not yet started construction. GE is proceeding carefully after deciding that the advanced Ka-band spotbeam, packet-switched satellites that other companies are pursuing more aggressively are a very high gamble.

“Bandwidth-on-demand services are where Ka-band spotbeam platforms look effective,” Langhans says. “Ku-band will continue indefinitely into the future, regardless of the penetration of Ka, because of its suitability for multicasting and lack of problems in rain fade….For the spotbeam satellites, only bandwidth on demand services are the target market, and you are placing a bet on a very high fill factor almost from launch. If you don’t get it, you won’t make money.”

GE commissioned a market assessment about two years ago of the potential for Ka-band satellites from Monitor Corp., a New York-based consulting company, that concluded that Ka- band was only cost effective for bandwidth on demand services. The report caused GE to reassess its broadband strategy and avoid jumping into the market then, when other companies were plunging ahead.

Intelsat

Intelsat is seeking partners to help develop its Ka-band broadband satellite system, having decided against following its traditional satellite procurement approach to acquire the new system, according to an Intelsat official. The Intelsat board will be asked to approve the new business concept for broadband in the second half of 2000.

Dedicated Ka-band satellites would be deployed region-by-region, starting in one or two markets, and evolving to global coverage, the official says. The satellites should be in service by 2004.

Intelsat currently offers a range of Internet-related services using its C- and Ku-band satellites. In 2000, the organization should introduce a two-way VSAT that can carry up to 2 Mbps streams. Another new terminal, a two-way multimedia dish for consumers, will be introduced in 2000, but will be offered through Intelsat’s service providers rather than the parent organization.

Panamsat

Panamsat was expected to disclose its broadband strategy as we went to press. The company operates 21 satellites in a global network. Currently, it carries two Internet services, known as Spotbytes and Spotcast. The Spotbytes service provides broadband connectivity, space segment and gateway transmission at speeds from 64 kbps to 45 Mbps or higher.

Analysts speculated that the new Panamsat broadband strategy could include an alliance with a major global fiber optic network operator, which would make Panamsat the first satellite company to form such a team. The company also has filings with the FCC for 6 Ka-band orbital positions according to Telastra, and its new broadband strategy should shed light on the company’s plans for those slots.

Ses Astra

SES Astra plans a global broadband platform, and has an early jump on the competition through its Astra-Net multimedia platform, which is operated by the wholly owned SES Multimedia S.A. subsidiary.

“Our overall approach is to take it incrementally,” says Olmstead.

Astra-Net started with a one-way multimedia delivery service using a variant of Hughes’ DirecPC system for the user terminal. In the two years since this product was introduced, some 40 service providers have adopted it to reach businesses users across Europe. Olmstead says 3,500 PC cards for the platform were in use by February 2000. The service has a 38 Mbps downlink speed. The service should go EBITDA positive this year. But that system is being superseded by the Astra-Net Generation 2 card, which is an open standard system produced by five card suppliers that will launch the product into much wider usage later this year.

“Two thousand is our big year to promote services into the residence,” Olmstead says. Europe On Line has introduced service and will use the new cards, as will Luxsat and several other unannounced new service providers. “The technology, the interest and applications like IP streaming have all reached the point where consumers will adopt these devices.”

Astra also teamed with Internet content distributor and technology company, Realnetworks, to trial a streaming media service over its DTH platform.

Future events that will further develop Astra’s broadband offerings include the launch of Astra 1K in 2001, and the completion of a long-anticipated deal to cooperate with a satellite operator who has North American coverage, which would complete Astra’s global footprint.

Astra has installed its Astra-Net platform in Asia using Asiasat satellites, in which SES has a 34 percent stake. A new company called Phoenix.net is involved in selling the services in Hong Kong.

Last June, SES launched Astra 1H, which has a Ka-band package with eight beams covering Europe. But commercial operation of the package has fallen behind schedule.

Astra-Net’s planned introduction of a two-way satellite service called ARCS (Astra Return Channel System) in early 2000 has been delayed to later in the year due to a problem with Nortel, which had been the prime contractor for user terminals for the new service. Nortel decided to stop developing satellite products, and Astra had to step in as prime contractor for the new terminals. The result was that the much-anticipated two-way terminal, with Ka-band down and Ku-band up, will be launched into the market in the second half of 2000, a delay of at least six months. The two-way system will be rolled out initially to the business market, which is more willing to pay for higher priced equipment than residential users, Olmstead says.

The next step is to launch Astra 1K in the middle of 2001, which will add a second Ka-band package to the company’s satellite fleet. The satellite will have 16 Ka-band beams, with eight more for Western Europe and eight for Eastern Europe. SES will buy more satellites this year with Ka-band onboard if all goes well, but Olmstead says, “we want some experience in the marketplace before we pull the trigger.”

Luxembourg, the home country for SES, has registered internationally for 21 Ka-band positions, with three over the United States, and SES is under some pressure to defend those slots from other companies that would like to use them if SES does not move to fill them, he says.

Eutelsat

Eutelsat has offered 120 Mbps satellite services since the early 1980s using 9- to 12-meter diameter dishes, giving it much experience in broadband that is being used to build its new multimedia services with smaller dishes, says Antonio Arcidiacono, Eutelsat’s head of multimedia services. The other big change is a switch to common, open standards, which is going to open a much larger market for Eutelsat. For its current VSAT services, “hundreds of proprietary systems are used. The fragmentation of the market brings higher prices,” Arcidiacono says.

Eutelsat is about to arrive at the junction where satellite TV services converge with data services of the VSAT business in the 45 Mbps range of bandwidth and speed. “There will be a common layer of infrastructure and technology, and it’s all based on IP technology, with MPEG DVB on the transmission side,” Arcidiacono says. “For the first time, there will be a standard for worldwide deployment.”

Eutelsat was adding two new satellites to its 15-satellite fleet in April that will expand its footprint into Russia, Africa and Asia. The organization has long served Europe and added North America to its regions in the last year. The next big step to expand broadband services will be the launch of Hot Bird 6 in the second half of 2001, with its combined Ku- and Ka-band payload. The satellite is also equipped with a next generation Skyplex platform, already carried on Hot Birds 4 and 5 and that was used by Eutelsat to support the development of multimedia services.

The newer satellite has increased onboard processing that will allow enhanced quality of service, Arcidiacono says. Eutelsat’s design allows a choice to be made between whether to use the satellite onboard processing or conduct the processing on the ground, he says. The payload will allow 2 Mbps transmissions to devices compatible with the DVB standard. Eventually he expects more Hot Bird series with the Ka-band package to be purchased and launched to further expand services.

Eutelsat has notified the ITU of its intent to use 20 orbital slots for Ka-band, but the plan for filling these slots is still under development. The organization will privatize in the next two years, and Arcidiacono says the valuation of the new company will be based in part on its broadband service offering.

Eutelsat has invested several hundred million dollars developing broadband services. Its funding comes in part from bond issues. Eutelsat’s owners have not contributed capital to the development costs to date.

Gilat

Gilat Satellite Networks does not own any satellites, but the VSAT company ranks among the most aggressive players in satellite broadband. “We’ll be the first to offer nationwide consumer broadband service, focusing first on rural America where they will be without broadband access for a number of years,” says Dianne VanBeber, Gilat Satellite Networks vice president for investor relations. Gilat’s intention is to have 1 million subscribers by 2003, and to reach 2.7 million subscribers within five years. Gilat’s announcements in early 2000 that it would team with Microsoft and Echostar for a U.S. consumer-Internet access service drove its stock value up to over $150 a share in 1999. Before the broadband announcement, Gilat had traded as low as $41.75 in October, 1999. With the news of its venture in Internet access, the stock price climbed to $181.50 on February 18, 2000, but then sank to the range of $128 in March.

The venture with Microsoft is called Gilat-to-Home, and will be introduced by the end of the year. The platform data rate is 40 Mbps down and 150 kbps up, but the typical rate for an individual user will be much slower at 400 kbps down and 56-100 kbps up, VanBeber says. Customers will use Gilat’s Skyblaster VSAT product, first introduced to enterprise markets in February 1999. The equipment is made by Gilat in Israel. As the venture moves to a consumer model, the company will turn to consumer electronics manufacturers to build the units in larger numbers.

As an equity partner, Microsoft took a 26 percent stake in Gilat-To-Home for $50 million. Microsoft also will buy a large number of terminals, which will be distributed through Radio Shack and by Microsoft. Microsoft and Gilat also were going to have a co-branded portal.

Echostar will offer its subscribers two-way high-speed Internet access along with its DBS service via a small dish sold through 20,000 retail outlets. Gilat benefits further from the relationship by being able to tap into Echostar’s installation and distribution network. Echostar will use an oblong, 24×36-inch dish that can see signals from satellites in three orbital locations.

Financing, in the amount of $300 million, for Gilat-to-Home will come half and half from the debt market and from strategic partners. The $50 million Microsoft investment is only one-third of what is needed from partners. VanBeber says Gilat retains a 35 percent equity stake in the project without putting in any cash.

Gilat has no plans to orbit its own satellites. VanBeber says the company’s position is that all the good slots already are taken, which drives Gilat to being a partner with satellite operators, rather than trying to compete with them.

Summing It All Up

At the end of the day, execution of service likely will be the determining factor in who wins the race between satellite, cable, wireless local loop and DSL for Internet and broadband services.

“The bottom line in being more responsive to customers is serving content faster and lowering the cost per bit,” says Collet, who is constantly seeking partnerships with companies that can help Teleglobe’s network achieve those objectives. “We are working with all the content distribution network companies, like Akamai and Sandpiper, to get them collocated and on our networks.”

Meanwhile, the old argument over the latency issues involving broadband usage of geostationary satellites has faded. With today’s services, latency is not an issue but as consumer, two-way interactive services come along, that could change. Collet says, however, techniques being put into use today, such as proxy caching, can minimize the impact of latency. And for many of Teleglobe’s remote customers, they are so delighted just to get a good connection into the Internet, they don’t mind the latency at all.

Satellites may end up with only a small fraction of the huge broadband services industry, but already they are carving out a sizable niche that complements terrestrial transmission methods. In the last two or three years, their role in the Internet and multimedia business has expanded to the point where they are becoming essential.

Theresa Foley is Via Satellite’s Senior Contributing Editor.

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