TYSON’S CORNER, Va.–The single most important way to trim the cost of obtaining Internet services via satellite is to avoid downtime from technical glitches, said Kay Sears, vice president of Internet, voice and data services at ATC Teleports.

Additional methods of limiting risk and saving money include buying technical support services, maximizing throughput, avoiding telephone company local loops and purchasing services in bulk. The use of teleports that buy satellite services in bulk also can allow ISPs and small service providers to reap savings that otherwise would be unavailable.

“The industry has perhaps three years of experience now providing satellite IP services,” Sears told attendees at last week’s Internet Via Satellite conference here. “New lessons are learned every day about how to more efficiently provide these services. These lessons coupled with continued advances in VSAT equipment/modems, satellite technology, routers & switches, management software and more – will impact and hopefully reduce the overall costs of providing satellite IP services.”

…Internet Via Satellite Opening Teleport Market

Robert Bell, executive director of the World Teleport Association, told Mobile Satellite News Senior Analyst Paul Dykewicz following the speech that Internet is giving the teleport and broader satellite communications market the kind of sizzle it has not seen since the glory days of cable TV’s expansion.

ATC Teleports has been providing IP services since late 1997 and now has approximately 1.2 gigabits of IP traffic flowing through its teleports. The company’s Internet revenues recently have been rising 50 percent per quarter. Use of a teleport can aid the delivery of Internet services via satellite by providing an end-to-end package to the ISPs, PTT and others.

“Teleports are uniquely positioned to extend the Internet worldwide via satellite,” Bell said. “They’re the hub. They bring together the IP backbone and the satellites and have the infrastructure to piece together a full network solution if that’s what the customer wants.”

In Sears’ speech, she explained, “The ultimate goal is to balance high quality, high throughput and high availability with a cost-effective satellite solution.”

A typical satellite IP Link might travel over a medium-to-high powered satellite and connect a large teleport antenna with a smaller user terminal at an ISP location, Sears said. Costs for an ISP can be divided into one-time capital expenses and monthly recurring service charges, she added.

The capital expenses would include router equipment, modem and VSAT for approximately $77,000, Sears said. The best approach is to buy known brands of equipment to avoid technical problems and downtime. The purchase of management software and a support contract also help. If an ISP is not satellite savvy, it should contract out the maintenance and operation of its earth station to a reliable third party, she recommended.

Beyond the capital costs, monthly recurring expenses include satellite space segment, teleport services and IP access. A 1 MB satellite-based Internet service at 256 Kbps costs around $10,540 per month, with the cost split among satellite space segment (67 percent), teleport services (24 percent) and IP access (9 percent), Sears said.

Costs also are affected by the kind of application a customer needs. An application should be assessed early to provide the most-efficient link, Sears said. A bank, a government institution or a company may require more than 128 kbps per session. Without finding out ahead of time the application, you cannot design the link, she explained.

“We learned this the hard way,” Sears said.

To avoid further unnecessary costs, a service provider should ensure that its interface is compatible with the interface of a customer, Sears said.

“Not all of them are – and not all of them can be overcome with special cabling,” Sears said. Discovery of an interface problem late in implementation can result in delays of a couple of hours or two weeks, she added.

A satellite link, unlike fiber links, can be designed to achieve a particular availability, such as 99.9 percent, Sears said. However, availability is directly related to cost.

“Know what your customer expects and design accordingly,” Sears said. “On the highest performing links – the costs associated in achieving that quality cannot be avoided.”

…Rapid Internet Via Satellite Growth Demands Efficient Delivery Technology

Rapid growth in demand for Internet services puts high importance on designing a link that is scalable to allow for technology enhancements, Sears said.

A recent DTT Consulting report indicates that satellite delivery of Internet services will grow 10-fold between the start of 1999 and the end of 2000.

“Much of this is organic growth is in existing circuits,” Sears said. “Plan for it. Design the link to handle it. Purchase the VSAT transceiver with the knowledge that your starting data rate will double in four months.”

The size of a VSAT antenna is another important factor that affects performance, Sears said. A shift from a 2.4-meter antenna to a 4.5-meter antenna causes a four-fold boost in antenna performance and allows for more efficient link design, she added.

Such a move can reduce the necessary bandwidth on the link by 35 percent, more than paying for the added capital cost of the larger antenna, Sears said. An ISP that plans to be in business for more than a few months should invest in the most economical link design for reducing the monthly recurring expenses. Ideally, a link design will optimize the throughput.

“In the case when you have a teleport on one side of the link with a large 16-18 meter antenna operating into a smaller VSAT, you can run a more efficient modulation and FEC scheme into the large antenna,” Sears said.

As modulation schemes have advanced, the cost has been lowered for delivering IP over satellite, Sears said. Modulation advances allowing 8PSK have made it possible to put 155 Mbps into a 72 MHz transponder. ATC deployed such a link in late 1999 between the United States and Brazil, after four months of link design and testing with the satellite operator, the customer and the U.S. ISP partner.

Further help in reducing costs could emerge if the existing satellite capacity shortage in North America and other regions of the world eases as new satellites are launched. “An onslaught of new launches will hopefully alleviate shortages and costs,” Sears said.

Key Ways To Cut Satellite Costs:

1. Use Advances in modulation to push the greatest number of bits through the space segment as possible to cut the cost per megabit.
2. Buy The space segment more efficiently to cut the cost per MHz.
3. Implement the two previous options in tandem to exert the greatest impact on the recurring costs of providing IP over satellite.

Source: Kay Sears, ATC Teleports