Broadband from the heavens

Satellite broadband to rural America has thus far been a niche business, but there are signs that it may be gaining traction. A new breed of competitive carriers is emerging as the cost of offering broadband over satellite falls and customers become more accepting of the idea of Internet from the heavens.

One carrier is making its way into rural communities by targeting nursing homes, retirement communities, small businesses and single-family residences where the only telecom service available is a dial-tone. World Communication Center is using two-way satellite feeds to link directly to rural communities and then distributing that broadband connection using Strix mesh networking gear, which supports more than 700 simultaneous online users.

Unlike other satellite broadband providers such as WildBlue or HughesNet, WCC doesn't own any satellites. It leases access from Iridium and Inmarsat, making it the satellite equivalent of a competitive carrier.

Chandler, Ariz.-based WCC became a subsidiary of the SatCom group when the U.K.-based company acquired it in July. It recently added Thuraya and ACeS to its list of companies for which it sells and distributes satellite services. Others include Blue Rocket and StarBand.

Although targeting rural telcos, WCC is proving itself in their markets with deployments such as the Florence Gardens retirement community in Florence, Ariz., which serves about 4000 snowbirds and retirees. It also deployed at Ocean Beauty Foods in Ketchikan, Alaska, and in bigger markets such as Seattle, Wash., where the Red Cross deployed its service.

WCC President Sam Romey said that the business case for satellite broadband has blossomed in the last few years as the cost of delivering broadband from the heavens has fallen and customer perceptions of satellite access have softened.

“Customers originally came to us because they exhausted every alternative,” Romey said. “They viewed satellite as an extreme alternative and as very expensive. But people are becoming more and more aware of satellite as viable alternative.”

The significant drop in cost of a satellite hook-up has aided that perception, Romey said. Though customers obviously sacrifice the lower latencies of a terrestrial service, satellite can provide significant capacity. WCC can offer 3 Mb/s on the downlink and 750 kb/s on the uplink to a customer for a cost $70 to $100 per month cheaper than an equivalent T-1 service, he added.

In fact, that cost reduction and new customer awareness are opening up markets to WCC that aren't necessarily in rural areas. Especially in light of recent natural disasters that have wiped out terrestrial communications, many businesses are looking to satellite as a backup to their landline service, Romey said.

WCC's customer base is still 80% to 90% rural. Businesses and consumers without access to traditional broadband and businesses with ready landline service are signing up, Romey said.

The recent appeal of satellite broadband is no surprise to Brad Greenwald, vice president of sales and marketing for WildBlue. That company started out as a partner with the National Rural Telecom Cooperative but has since seen its business grow to encompass 85,000 subscribers (The Independent, July, page 8). Greenwald said WildBlue is about to launch its second satellite on Nov. 30, tripling its capacity.

While satellite broadband may be on the rise, Greenwald warned that breaking into the market as a new competitor isn't an easy proposition.