VSAT Satellite Internet News

Where is the Broadband Stimulus?

2009-03-05T10:11:00.003-08:00

President Barack Obama laid out his plan for a huge economic stimulus package, with broadband rollout, an Internet-based smart energy grid and computers for schools as part of the plan. The idea was to put this plan into effect within weeks of taking office....one little problem, Congress doesn't work quite that fast!

I personally know of several companies in the Vsat business who have lobbied for some of the hundreds of millions Obama has promised to the industry to bring high speed internet to every corner of America. Obama called on Congress to approve funding for rolling out broadband to unserved and underserved areas, although his speech did not provide details on how he wants it to happen. No beef yet!

Our new President is learning (I hope) that the position of President has power, but nowhere near as much as he envisioned or perhaps fantasized about. The evidence of this glitch in his gettalong for me is that we have seen the markets virtually ignore the passionate addresses Obama has made to the American public and to Congress recently. If anything, the markets have reacted negatively - as if putting him in his place as a bit too carried away with his own BS.

Like all industries, the VSAT industry could use a shot in the arm.......hopefully the stimulus will come soon.

Full Birds

2008-10-28T13:57:00.006-08:00

With the huge stock market swings we've seen lately you would think the satellite bandwidth folks (a pretty volatile group in their own right) would be in deep trouble. Not the case......the satellite bandwidth business is booming this year compared to many industries - why?...well, it isn't due to redundant backup demand (although that business doesn't hurt) or millions of folks begging for high speed internet in rural parts of the U.S. (which they aren't), rather it's due more than anything, to the surge in HDTV broadcasting. Every time I turn on the TV a new HDTV station pops up or the "locals" are switched over to HDTV broadcasting. I love it except when I see what it's doing to the cost of bandwidth for data transmission.

The major players, SES Americom and Intelsat, are booked up to very high occupancy rates right now and demand continues to exceed capacity. Even with new satellites on the drawing boards and under construction, the shortfall of bandwidth is alarming right now. HDTV signals require 4-5 times as much bandwidth for transmission as standard definition signals, even with sophisticated MPEG-4 encoding. In addition, our Internet communications bandwidth requirements continue to grow at about 50% annually. Staggering growth in such a turbulent market isn't it?

The success of HDTV well exceeds everyone's projections - the good news is really nice programming coming my way - the bad news, I rely on internet, not TV, to earn a living! I've seen bandwidth costs increase by 15% or more during the last 12 months. Additionally, Service Providers have been forced to throttle, employ access limitations (FAP) and cancel accounts that stress the network too much. It is a classic example of "needs in conflict" between satellite owners & ISP's, who want to maximize revenue - and consumers and entertainment producers, who want to use the internet in ways it might not be ready for....the next entertainment medium. Capacity over satellite will always be more expensive and limited than terrestrial counterparts; however, the growth of internet usage in general has accelerated so fast that something is bound to give....sooner or later.

There is a great deal of brainpower assaulting this shortfall of bandwidth that will become even more apparent in the next two years.......I hope brainpower wins the race on this one...slow internet is no fun!

Murphy's Law of satellite failure....

2008-05-15T13:44:00.019-08:00

So far in 2008 there have been some glitches in the "get along" for satellite owners.....

In March, SES Americom satellite AMC 14 (totally leased to EchoStar/Dish Network) failed to reach the correct orbit to have maximum useful life. The options are to use fuel on board to get to the right orbit (reducing the total life of the bird) or leave it where it is and reduce the number of HDTV channels it is able to handle. Both options are a setback to Dish Network, who is struggling to compete with DirecTV.

Another of the SES Americom satellites, AMC 4, has recently been slated to be taken out of service at it's original slot by an unknown issue with several transponders. SES Americom has moved AMC 2 into the "slot" taken by AMC 4 at 101 degrees W. and most domestic customers have service. Since AMC 2 is not as powerful as AMC 4, it has not able to accommodate all of the customers - ie some folks with smaller dishes and outside the U.S. are still in the dark.

Separately, IntelSat will be forced to move a satellite (G 18) over to the slot currently occupied by G10R at 123 degrees W. G10R has developed propulsion issues and will not be able to stay in geo-orbit much longer. G10R does have enough fuel to stay in orbit until this switch takes place, so this change will likely be transparent to customers (the changeover was successful on June 3, 2008). After the changeover to G 18, G10R will be shut off and allowed to crash into the sea.

These three situations point out how vulnerable these birds in the sky are to failure of components and the forces of the universe (geez, this is starting to sound like Star Wars 10 or something). It would be no big deal if it were easy to point customers to a different satellite...but it is a fairly complex and somewhat costly maneuver in most cases. In defense of the satellite owners......Intelsat launched G 18 on May 21 and had it operational 13 days later on June 3, which might be a record, and demonstrates how quickly problems can be corrected by satellite owners.

In the very near future there will be reasonably priced fixed-automatic dishes (Motorized Earth Station Antennas) available that will enable customers to switch satellites literally with the press of a button (and a quick phone call). The dish will be stationary in location, but capable of tracking a satellite and locking on. This will revolutionize bandwidth pricing for many and prevent long outages in the event a satellite has a problem. Satellites formerly relegated to the satellite "junk yard" that are on inclined orbits (orbits that require some tracking by the dish to stay locked on) will spring back to life at very low bandwidth costs for those utilizing this new type of satellite dish. I predict that those using fixed-automatic dishes will be able to surf for about 50% of the current costs. Pricing will be in the $3,500-$5000+ range depending on dish size.

Hughes Network Services Posts 2007 Financial Results

2008-03-06T17:16:00.012-08:00

"HNS delivered strong financial results in 2007," said Pradman Kaul,
president and chief executive officer. Revenues increased by 13% over 2006 to $970 million and our profitability in 2007 was also very strong.
Operating Income for the year was $90 million, a growth of 56% over 2006; EBITDA* increased by 28% to $139 million in 2007 over 2006, and Net Income increased by 161% to $50 million. All of the segments showed robust growth. The major revenue growth contributors were the consumer, international and the mobile satellite markets with growth rates of 13%, 11% and 77% respectively in 2007 over 2006. The consumer base grew to 379,900 subscribers at December 31, 2007, a growth of 16% over the subscriber base at December 31, 2006. Our North America and International enterprise groups provided a solid revenue base contributing in aggregate over half of HNS' total revenue in 2007. I am also very pleased to report that we were awarded a record $1.1 billion of new orders in 2007 representing a growth of 30% over 2006."

HughesNet, the company most satellite internet users are familiar with, has positioned itself pretty well to launch their new ka band product, SpaceWay . If successful, SpaceWay will enable HNS to rid itself of many of the expensive leases on Ku band satellite transponders it currently pays for. Profits will soar if Hughes can draw in many of the Enterprise buyers that want products like "point to point" internet - that is, direct (single hop) connections between a company's branches, as an example. It remains to be seen what Hughes will do to motivate commercial and consumer prospects to buy from them rather than the other options like Wildblue, ViaSat's LinkStar and iDirect products like the 3100 NB.

2008 is a year that I believe Wildblue will need to find a path to profitability or HughesNet will steamroll them out of the marketplace. Neither company has very good consumer ratings...in fact, both companies have a reputation for overcrowding, inept customer support and promises way beyond what is delivered. The difference is in profitability - and Hughes is taking care of business in that department. Wildblue is still spilling red ink according to my reading of the tea leaves. Stay tuned!

ViaSat hires Tom Moore to run ViaSat-1

2008-02-08T12:15:00.001-08:00

The ever aggressive and strong marketing always trumps substance boys at ViaSat announced today that they hired Tom Moore, the co-founder of Wildblue, to head up their ViaSat -1 program. The ViaSat 1 program includes the launch of their own ka band satellite as well as providing the underlying services to consumers and commercial accounts on a direct basis. They plan to bring a set of services to the market by 2010.

It's been bantered about by investment banker types that ViaSat would need a company like Wildblue on the same team with them to get the interest of the investment world for this $500 MM+ project. With the hiring of Tom Moore, who in essence was fired from Wildblue by the Liberty Media crowd, it sure doesn't look to me like ViaSat is going to be including Wildblue in their plans!

My own thoughts are this: ViaSat is not happy with the growth of ka band earth station and gateway equipment sales worldwide (which they have been heavily invested in since 2004) and are determined to make a go of ka band. By launching their own satellite, ViaSat can control the performance information that gets out to the field, and more importantly, to the financial community. Additionally, it will enable them to reap much greater profits if they can get the "bent pipe" approach to ka band to work as well as it does on paper. Regardless, they will be playing catch-up to HughesNet, who will make a far more advanced ka band platform (SpaceWay III) available to commercial and consumer accounts in a few months.

I have said more than once......the ViaSat approach to ka band is much less expensive, and it shows. On paper, bent pipe ka band looks terrific, with all of that bandwidth re-use ....but as the rubber has met the road, bottlenecks have surfaced right and left at the Gateways and "bent pipe" ka band has bloodied it's nose more than once. It remains to be seen if the "on board processing" approach of HughesNet's SpaceWay III will prevail......or if all ka band goes the way of the 4 track tape player....

Why stuff happens on satellite connections...

2007-11-28T09:09:00.000-08:00

If you are a customer of a consumer or even an enterprise satellite internet provider, chances are good that you have endured sudden slowdowns, disconnects, delays and a host of other annoying problems with your connection. What the heck is going on! Don't the satellite internet providers realize they are getting a terrible reputation by allowing this nonsense to continue?

Well, the truth is that indeed they do know you are not getting the level of quality that their advertising would suggest. After all, they produce the advertising like HughesNet puts on the air with the flirtatious red headed lady touting the greatness of the satellite experience....asking "What are you waiting for"?...well, for some of you, waiting has been a very good strategy! EVDO (cellphone technology), for example, has come to many areas close to the larger cities and as a result of much lower costs, rendered satellite internet obsolete.......at least for the present. But for most of you out in the boonies, it's either satellite internet or dial-up, with satellite internet usually providing the better experience....but at more than twice the cost of a phone line and service in most places.

So why is satellite internet (especially consumer service) so lacking in dependability? Here are the most common reasons for the problems and what gets consumers up in arms:

1. Overbooking of the network -
In order to have a chance at making a profit, satellite internet providers absolutely have to group a very large number of subscribers on the same resources (the same satellite transponder, for example)....creating a guaranteed bottleneck and slowdown during the times consumers use the internet the most - afternoons, evenings and weekends.
2. Weather -
There are two places that a weather issue can bring your connection to a standstill - your own outdoor unit or the main equipment at the uplink facility used by your internet provider. What causes the problems is heavy rain in the center of a strong storm just south of your location or at the uplink, wet heavy snow on your antenna or some types of heavy fog/rain mix. When you experience a sudden slowdown or complete halting of activity....you can usually save yourself a call to tech support - it's probably weather.
3. HOGS -
Most internet providers have implemented a number of measures to prevent a user from sucking all the "wind" out of a bandwidth pipe which is shared by hundreds or even thousands of users; however, it is still possible for around 5% of the users within a shared group to monopolize up to 75% of the bandwidth. This issue has improved a great deal by limitations to network access or Fair Access Policies (FAP) implemented by all consumer satellite internet providers and most enterprise operators as well.
Most who are labled "Hogs" by the providers and users who are affected don't appreciate the characterization and offer a defense of "I am entitled to every kilobit that I pay for." The notion of "lets all play nice" doesn't sit too well with a guy who just moved from the city where he had a 7000 x 512 kbps totally open pipe and now is paying twice as much for a 1000 x 256 kbps pipe that actually runs at 800 x 128 kbps on a good day.

4. Equipment failure or poorly aimed dish -
Although there has been a lot of noise on Wildblue and HughesNet forums related to equipment failure, the truth is, these are far less frequent causes of problems than items 1 - 3 above. Yes, Wildblue has had a problem with the manufacturer of its transmitters and HughesNet has had some modem issues in the past, but for the most part, the equipment is pretty dependable......as long as you get a quality installation.

A poor job of installing the outdoor equipment will not always reveal itself for several months.
For example, a pole mounted dish is set in concrete. The bottom of the pole is supposed to have a piece of rebar steel running through the pole so the wind load on the dish above will not loosen the pole at the bottom. This requires more work to get the hole large enough to handle the extra rebar. Imagine a very strong wind gust or sustained wind during a storm putting a very large load on the dish face of a setup without the extra rebar....over time the dish will be spinning like a top and a truck roll will be needed to repoint the dish.

So what can a consumer do about it? There have been many, many, many (I could go on for a bit) attempts to force satellite internet providers to provide an experience that is more like a terrestrial high speed setup. The efforts have been unproductive at best and a total waste of time and money at worst....why?... Satellite owners and providers have convinced Federal regulators that the industry is extremely risky and can't be compared to DSL, Cable or T1 connections. So far they have prevailed and to a degree they are correct - it costs a medium sized fortune to launch a satellite and keep it up and working....and the forces of nature affect satellite connectivity far more than a connection running underground.

VSAT Truth in Advertising?

2007-09-22T08:10:00.000-08:00

Sooner or later you will want to find out how your VSAT connection with XYZ company compares to ABC company, which seems to be offering the same service package for internet as your provider does...for about $100 less per month! How can you compare the two providers and packages apples for apples? Let me say that it is nearly impossible...Why? Too many satellite internet providers use very convoluted terms and vague statements to disguise what they are selling you. To put it more directly, some satellite internet companies misrepresent their products performance capabilities- plain and simple.

Here are the terms that are most often abused: contention rate or ratio, Fair Access Policy, Acceptable Use Policy, Terms of Service (TOS) and vague Articles in your Subscriber Agreement. Most businessmen and individuals alike don't check up on the companies they buy from, even if they haven't done business with them before! Why?...because most of us can't imagine how a company could stay in business very long if they were engaging in deceptive or unethical business practices. Well, I forewarn you now...check up on every satellite internet company you intend to do business with - for some reason, the industry draws in a better than average number of downright crooks! It might be the gross dollars involved or the fact that most satellite internet companies require prepayment for equipment and monthly service......I'm not sure, but I am certain this industry has suffered from a lousy reputation for many years.

Back to what you should watch out for:

#1: Contention Ratio or Rate - This is the single most abused term used in both satellite and terrestrial internet comparisons. The reason it is purposfully mis-stated is that there is a lot of room for interpretataion about what the actual contention is, where it starts and how it is figured from one provider to the next. A unscrupulous or desperate internet provider can actually "make" the results come out any way they need to show their service package in a better light than the competition. It would take weeks to explore all of the ways a internet provider can "sandbag" the contention ratio he claims to be offering, but here are some questions to put them on the defensive if they are the deceptive type:
1. Instead of asking what their contention ratio is for a package, ask how many other users you will be sharing the connection with. You will be surprised to hear the answers they can come up with. How, for example could any ISP know how many users will be behind a router? It is actually possible to know with the right software. Listen to the explanation they give and then call an expert that has some independence from the situation.
2. Ask them to allow you to speed test and ping test a connection. Both at their location and at a customer site. Since most customers of a provider expect to be able to use the connection without having a stranger come in to test, it might not be easy to test at a customers site.....but it's worth a try, and some customers are surprisingly agreeable to such tests. If they give you the name of a customer, you can always ask them to run a test on a site like testmy.net or visualware's sites and email the results to you. A company claiming a 25:1 contention ratio and a speed test shows about 50% of the "up to" speeds, is a strong suspect for not trusting!

#2: Fair Access Policies are gaining ground rapidly as the most abusive/convoluted method for Internet Providers to "pack 'em on the transponders." At this time there is no standard set forth by the FCC, to force internet providers to use similar or comparible fair access policies...making it nearly impossible to do "side by side" comparisons. One provider, HughesNet, has made the policy so vague that even long time pros in the industry are pulling their hair out in an effort to advise clients about how to avoid FAP penalties, or slowdown's, if you will. Some type of FCC standard needs to be enforced on all internet providers - we can compare the specifications of two cars can't we?...why shouldn't internet be held to a standard that permits accurate comparison?

#3 Terms of Service and Acceptable Use wording has evolved into a art form of deception among some dishonest internet providers. What they have done is use blanket wording that makes nearly ANY type of usage beyond casual email and browsing a potential "black hat" activity. In other words, the vague wording of these two sections of your agreement with a provider can give them ammunition to throttle your usage or even cancel you. This makes checking on the reputation of a company more important than ever. Make them give you at least 3-5 customers you can call as a reference.

It is my hope that enough pressure will be put on the satellite internet industry from regulatory folks as well as customers that by this time next year it will be much easier to compare internet providers apples to apples, understand what your speeds and performance will be without having to hire someone to sift through it all and know how much bandwidth you will actually be getting for the dollars you are spending.

2007 - The Year of the FAP Flap!

2007-03-30T14:56:00.000-08:00

I wondered when Satellite Internet Service Providers would finally pull off the rose colored glasses and get a grip on the realities of bandwidth cost.......Have they finally learned that you have to earn a profit if you want to stay in business? Most VSAT Service Providers have found out that allowing all of your customers to download or upload whatever, whenever and however they want on a "Shared Network," is a recipe for massive network slowdowns, customer complaints and ultimately, loss of revenue.

Until late 2005, the only major satellite internet provider with any type of bandwidth limitation for users was HughesNet (formerly DirecWay). They prevented bandwidth "gluttons" from bringing an already overbooked network to a screeching halt by implementing a Fair Access Policy (FAP). This policy slows down aggressive users for several hours to permit others on the network a fair "shot" at the available bandwidth. On a typical HughesNet transponder there are about 7-8,000 customers. If everyone assigned to that transponder were active at the same time they theoretically would be surfing at about 2-5 kbps, or around 1/10th of dial-up speed! Fortunately not everyone is competing simultaneously.

HughesNet did a pretty good job in the past of "balancing the load" - spacing out the time zones of users, moving users from one transponder to another, etc. But things have changed a great deal in the surfing world over the last 2-3 years. Content that people want to download has more graphics in it......so the formulas for network loading used successfully in the past by HNS and copied by others are not working as well today and a lot of customers are unhappy with the speeds they get, especially during the "prime time" hours of 5 PM to 11 PM. Since 2005 almost every satellite internet provider has implemented some type of FAP or traffic management scheme for all shared bandwidth (which is what nearly all users are on).
Update: April 29th, 2007: HughesNet has announced a new Fair Access Policy! The new policy is still actually being "implemented" and is subject to some continued modification, but essentially works the same way as the previous policy allowing you to refill an imaginary bucket as you use the service; however, the new "rules", if you will, put you in a near zero upload/download penalty mode if you actually hit FAP levels. Sound confusing?....it's supposed to!

Update: June 1, 2007: As a possible response to the criticism from many long time HughesNet customers, HughesNet "opened up" a period of FAP Free usage each day in the middle of the night. Basically from 3-6 AM Eastern Time Zone, you can download as much as you are able.

In 2006 the buzzword in the satellite internet world was "traffic shaping"....a fancy term for blocking undesired activity or managing the data packet delivery by a internet provider. An internet provider can prevent certain high volume activity like streaming video, gaming, voip phone calls and point to point downloading by blocking the typical ports used by those activities at the gateway or Network Operations Center, where the network is managed. Alternatively, they can prioritize the handling of data packets so that your latency skyrockets, but the overall speed (once you are "slotted") remains good. All of this is a form of curtailing usage outside of the FAP policies and is considered a "black hat" policy by many critics.
Many users have raised a good deal of fuss........saying basically, "I paid for X amount of bandwidth and expect to be able to use it any way I want to." Internet providers have either refused to admit they were actually traffic shaping, or told customers to re-read their Terms Of Service agreements, which are very one-sided in favor of the provider, stating that almost anything could be considered undesirable download activity and could be restricted if the network operator wished! These tactics have just galvanized the distrust many satellite internet users already have for Internet providers. The outcry from users hit with this so called traffic shaping, has been so overwhelming that many providers (especially iDirect uplink carriers) have been scrambling to put together a stated FAP policy in lieu of the perceived back-door tactics used in most traffic shaping schemes.

We are entering a era in which the desires and needs of internet users are on a collision course with satellite owners and resellers of satellite bandwidth (terrestrial bandwidth as well). People are using the internet more and the available content is more graphical, meaning big increases in demand ....unfortunately the cost of satellites, the cost of launch and the ongoing costs to deliver it to customers has stayed the same or increased.
I predict that by the end of 2007 the most ethical satellite internet providers will have a simple to understand Fair Access Policy and virtually all of this behind the curtain traffic shaping activity will fall by the wayside. Providers who aren't making very good returns on investments won't continue to do business the way they have in the past.......investors won't stand for it any more. It all adds up to increased costs for those wanting to do all the "cool stuff" that is coming our way like IPTV, more video streaming, games, movies and so forth.

What's New? Satellite 2007 in Washington DC

2007-02-24T10:46:00.000-08:00

My blistered feet tell the story......."Mr. Scott, the Convention Center is only 7 blocks away", the hotel desk clerk said.....I'm calling that the 4th big lie! The notion of a city block takes on a whole new meaning in D.C.!
Our company was an Exhibitor at the annual trade show dubbed Satellite 2007 this year and although the crowd was certainly not overwhelming in size, it was very high quality. It ran from Tuesday Feb. 20th through Thursday, Feb. 22nd and was directed at those who buy or sell "space segment", as satellite provided bandwidth is often dubbed, and the equipment used to transmit and receive it on the ground and in space.

The folks with exhibits, about 230 strong (organizers claim there were 270), spent a fair amount of time trying to strike deals with each other, as they do every year....and then competed for the attention of several thousand attendees......I'd guess maybe 3,000 or so of them actually toured the floor (organizers claim there were 8000 attendees).

The most talked about subjects on the convention floor included how ka band satellite internet is actually working out, how much of a real threat it will be to ku band offerings down the road and the reality check everyone in the industry did regarding the threat of EV-DO broadband in the U.S. to the satellite internet business. There are many very differing theories about what the landscape for high speed internet will look like in the underserved parts of the U.S. over the next few years, but most experts agree that EV-DO cell cards will play a pretty big part of the growth. The greatest drawback to this technology from my perspective is the high cost of wireless routers to move the high speed internet of EV-DO to multiple computers.....too few router choices and some of them cost over $500 - compared to $50-90 for standard high speed routers. The other obvious shortcoming is the lack of infrastructure in rural areas.......and the unlikely haste that it will be built out any time soon.

The early reports of how well ka band has been doing as a competitor to ku band aren't very encouraging to most I spoke to either. The wealth of "white papers" done on ka bandwidth reuse and lower costs associated with this platform are not showing themselves, at least with the efforts made to this point by Telesat, Wildblue, EchoStar and Intelsat to test or provide ka service. EchoStar has just begun to start using the huge amount of ka space it has on SES Americom satellites AMC 15 & 16. And that is for HDTV for the most part and downstream only. It was interesting to see and meet many of the Pioneers of the Satellite TV and Data era at the convention including one of the Founders of EchoStar and a legend in the industry, Charley Ergen.

Will EVDO knock satellite internet out of the park?

2007-02-06T06:10:00.000-08:00

2007 will be the year that Cell phone providers like Sprint, Alltel and Verizon push strong into Suburban and close-in Rural territory staked out by Satellite Internet operators and attempt to take market share away. Will they succeed?

When EVDO Revision A (and soon thereafter Rev B) comes out in Q3 2007, there will be a full blown skirmish between Cell operators and the Satellite Internet industry for available consumer and business internet accounts. The territories they are trying to claim are the areas where concentration of homes and business is great enough to build out advanced cell service, but not great enough for terrestrial providers like cable and dsl. These suburban and rural areas have historically been the territory for Satellite operators and some adventuresome WiFi businesses.

Current Status:

With the current levels of cell service available (EVDO rev.0), cell operators are taking a fair amount of business away from satellite operators in fringe suburban areas....why?.... younger users who want to stream video, trade music and video, play internet games and not have any limitations on usage. So far, the cell operators are filling the bill for about $50 or so for the "Aircard" and charging about $59 per mo. for high speed internet....well, sort of.

The speeds on most EVDO plans are about 400-800 kbps download and around 200 kbps upload. Much higher speeds are promised when Revisions A and B come in to play later this year and beyond.
Latency is around 200-350 ms - 50% lower or more than a satellite connection. This latency allows gaming without too many bumps along the way. For those who have been experiencing oppressive limitations from the satellite operators, it seems like heaven....but for how long?

Some of the providers already have a limit of usage each month and it's pretty restrictive (as low as 4GB per month - lower than the satellite operators are assessing). There is no decent data to report on what happens when the network begins to "load up" with users. I was in Denver's airport during a recent snow storm and the EVDO service was non-existent until you were several miles from the airport.....so it's not perfect, by any means. I personally believe that the cell operators are going to learn the same lessons that satellite internet operators have learned........bandwidth is expensive! You can lure people in with attractive prices and speeds, but when you can't maintain those speeds as the network loads up, you just become another one of those lying, cheating, false advertising no good internet providers that we have too many of already! Just kidding........it's not easy to balance a high speed internet network in this day and time.

Future:

When cell operators build out and offer Rev B. EVDO high speed internet service (about 2 years out), the landscape for service will be incredibly competitive. City, suburban and rural individuals and companies will have a lot of choices and the providers with foresight and innovation will be the one's to survive. It should be good for the consumer!

Trends in Satellite Internet 2006...

2006-12-27T07:03:00.000-08:00

As 2006 draws to a close, many in the satellite internet world will describe it as the year of consolidation by major satellite owners. It had to happen. There had to be a day of financial reckoning for this industry and reductions in overheads which will occur as a result of these buyouts. It will help give companies like Intelsat a chance to reach sustained profitability. The intermingling of stock ownership that goes on in this industry is downright incestuous!

Some others will call it the year that Satellite ISP's finally implemented effective curbs to what they have described as the runaway usage of bandwidth by a minority of very heavy users on most satellite networks.
There seems to be a collision of needs in the making between users and satellite internet providers during the next few years. Website owners want to push cool, trendy and bandwidth hungry "stuff" to the consumers out there. Consumers want to see and do all of the cool new stuff as soon as they hear about it....now the rub.... Satellite ISP's who want to make money, have to squeeze as much as they can out of as little bandwidth as possible. With expensive space segment bandwidth, the collision occurs.....now, crank up the blame game!

The effort to curtail usage is popularly referred to as "Traffic Shaping", which is a Network Operations Center routing effort to prioritize the types of packets ISP's are willing to allow to go at the fastest speeds, slower speeds or not allowed at all....in a nutshell, that's shaping. The decisions of what traffic will be given the green light, yellow light or red light are made by the folks paying the bandwidth bills to the satellite owners each month.

During 2006 the "hot button" traffic shaping issues revolved around peer to peer file sharing (like music and movies), Voice Over Internet Protocol (voip) usage and streaming video or audio devices or websites. Early in the year Internet Providers denied the use of traffic shaping, and some still do, but a very savvy group of consumers and business users have found ways to analyze the packet traffic and determine how a provider treats various types of packets and the ports they utilize....and the evidence is crystal clear! No longer a mystery.....your voip or movie sharing doesn't work because the Internet Provider doesn't want it to work!... especially during "Prime Time"...from 4 PM to midnight each day.

Common knowledge among providers is that shaping will be a big part of the future of most bandwidth offerings and pricing schemes. I've even suggested to some providers that taking on new customers should be a interview process much like dating services use (like "It's Just Lunch") and both parties must tell the truth about what they will do, what time zone they are in, how much bandwidth they will use and what time of day they will use it....and if they don't tell the whole truth, nothing but the truth...so help them....well, you get it......there will be consequences! By dealing with the difficult stuff up front, both users and providers can find some ways to allow folks to do what they want to do........even if it means doing it at non-standard times of the day.
This "collision of needs" will continue as a huge problem over the next 2-4 years mainly in the satellite internet world, but also a problem for terrestrial & EVDO providers, until new data/packet compression techniques will hopefully "ease the squeeze".

Contention isn’t what it appears to be…..

2006-12-09T16:48:00.000-08:00

Enterprise satellite internet providers have long touted the importance of the lower contention ratios their various plans offered. Many very knowledgeable IT professionals have long used this “ratio” as the yardstick to measure quality by. Anything under 25:1 contention ratio has traditionally been considered as “Enterprise Quality” and when you get down to 10:1 contention or lower, well that should be a Golden satellite internet connection, right?…..well, not so fast there….it sure doesn’t hold up as a good way to measure the quality or speed of your connectivity by my experience!

The BIG problem with contention ratios ( basically, the number of accounts connected on the same circuit together) as a measuring stick of quality is knowing the quantity of bandwidth used by those “contending” for it. You might have a better quality connection on a 40:1 circuit of light browsing & email users than you would with a 10:1 circuit of power users! What I am seeing more and more is a very low contention circuit (in theory) actually being sold to say 10 accounts…..but each account has 15 users …….if all users are on at the same time, the experience for all is pretty slow. A ISP can’t really control the number of users connected behind a router at any of these accounts.

A network that delivers close to what is promised has to be carefully loaded using some customers from different time zones, light users and heavy users blended together across time zones and a willingness to “just say no” to certain types of customers based on what they say they will do vs what they end up doing once connected.

Until we reach the day that satellite internet bandwidth is as cheap as terrestrial circuits (a day I don’t expect to come any time soon), power users will either need to “pony up” for a dedicated circuit or curtail their bandwidth hunger or find a different provider who will put up with their appetite.

Will the "REAL" Rural Broadband Solution please stand up!

2006-11-10T08:15:00.000-08:00

Over the last 3 years or so there have been several consumer products and services claiming to be the end-all solution to a lack of high speed internet in rural and "off the grid" areas of the U.S. So far, nothing approaching a true broadband experience at prices competitive to traditional land based products has emerged. Let's take a look at the current and proposed products and what the current status of each approach is today:

1. Consumer Satellite Internet:
There are three companies offering a consumer satellite dish approach to reach rural areas - HughesNet, Wildblue and Starband. All three offer equipment that is bi-directional (send & receive), so you don't need a phone line to get the service. At the service levels that compete in price with terrestrial services like DSL & Cable, the results are pathetic: much slower speed for uploads, extremely high "lag" or latency, no voice over IP capability and severe bog down during a 4-8 hour period referred to as "prime time"- the after work to late evening hours generally. In order to get speeds that are remotely close to terrestrial counterparts you have to spend upwards of $2,000 for equipment and about $200 per month or more.

The satellite industry's answer to providing competitive priced broadband to rural areas was supposed to be the introduction of ka band satellite internet, and that still might be the answer; however, the results thus far by the two companies offering it - Wildblue and Telesat, are mixed at best and many are dropping the service in the U.S. after giving it a one year trial. Once again, overcrowding has been the greatest problem - not the satellite (as is the case in most ku band satellite approaches), but the equipment on the ground not capable of dealing with growth. Wildblue Communications is launching their own bird in December 2006 and that should be better able to handle the growth they anticipate.
HughesNet plans to launch a ka band satellite in early 2007 which is a more complex approach that doesn't require the regional ground station equipment required in the Wildblue/Telesat approach. It remains to be seen if this effort will result in better performance once the network is loaded with customers.

2. WiMax Internet:
Hailed by the inventors (mainly Intel) as the cost effective answer for Rural America, this technology has been bogged down in Standards differences, extremely high cost of implementation and all kinds of problems shooting the microwave signals through anything but VERY open spaces! The notion that WiMax could cover a 20+ mile area with a single tower has been smashed by the reality that this technology is 50% better than what has come before and 50% vaporware. I don't know if it will be improved by going to lower frequencies or not, but the WiMax craze has quieted down and many don't see it as more than a big city solution for cell operators.

3. Broadband over Powerlines (BPL):
Another one of the "ultimate" answers for Rural America, BPL has encountered many of the same cost issues that plague widespread WiMax deployment. To keep the speed up to broadband levels, this technology requires LOTS of equipment on the powerlines they carry the broadband over. Even with the recent ruling by the FCC to make BPL more competitive with other types of broadband by changing it's designation to "Information Service", FCC Commissioner, Michael Copps, suggested that even with a level playing field there hasn't been much effort to build infrastructure by the Utilities. That doesn't even include the pressure that the Ham Radio operators have and will bring to try to stop this technology dead in it's tracks.

So what does this really mean? Don't look for anything better than what the satellite internet operators will be offering for the foreseeable future. Ka band internet might improve things a bit next year with two new ka band satellites going up, but my bet for Rural America for the longer term is on cell operators eventually extending the EVDO network out to rural areas. The Enterprise satellite solutions will still be the fastest solutions available, but at a cost most consumers would choke on.

Another one bites the dust.......

2006-10-10T18:04:00.000-08:00

Another satellite internet provider has apparently shut down all operations...not a giant....just a giant "wannabe" by the name of dataBahn. They sold franchises for purported "exclusive" territories for what originally was supposed to be ka band Surfbeam through Wildblue Communications. These franchises sold for around $30,000 ea. The people who took them up on this offer are very angry right about now. Wildblue never agreed to provide them service and dataBahn never provided the Dealers with the "millions" in advertising they promised during the sales pitch, so I'm told by more than one angry dealer.

What eventually happened is that dataBahn struck a deal with the ku band Surfbeam provider Unasat, headquartered in Wisconsin Rapids, WI. That relationship ended with a lawsuit about 12 months later. dataBahn sued and quickly repointed all their customers to SES Americom's ku Surfbeam service this summer. I've been told by former Dealers they forgot one detail.......to pay for the bandwidth. SES pulled the plug last week.

The brash CEO and founder of dataBahn, Ted Lindsley, has been quiet since the provider went dark. Big plans..... Seasoned veterans knew he was skating on thin ice from the get-go.

Satellite Internet Consumers have a rough summer.....

2006-09-25T12:02:00.000-08:00

This might go down as the worst year ever for consumer grade satellite internet quality. There isn't a provider out there who is exempt from heavy criticism in 2006. We've been saying for a long time that it is very difficult to provide consistent service on a satellite internet connection for less than $100 per month....and this year seems to bear that out more than ever.
Here is the "rap sheet" on the providers:
Starband:
Even with the introduction of new equipment and service levels (the Nova series) this company did so much damage to their reputation from 2003-2005 that they are toast and apparently just don't know it.
Now owned by SpaceNet, which is a subsidiary of Gilat, Starband is trying to re-invent itself (again) under the leadership of Andreas Georghiou. Georghiou was formerly with the very successful SES Americom as Chief Commercial Officer.
Too little to late? Yes. They are so far in the financial "drink" it would take a miracle to bring them to consistent profitability. They can't afford to take decent care of consumer customers and their speed packages are pedestrian at best.

Wildblue:
The big story in 2006 for Wildblue is headlined "Experience is everything....and we don't have enough".
This company grew in subscribership by leaps and bounds in 2006...but didn't plan for the growth worth a darn. They were bringing on customers right and left, but the "upfront" equipment costs were a good deal greater than what they charged customers in their effort to cut into DirecWay/HughesNet's market share.
As a result, Wildblue had to go to the well twice during the last 12 months to finance the losses they are sustaining as well as try to build out a network that will support the new satellite they intend to launch ( WB1) in November 2006.
They have found it necessary to change the rules for subscribers more than once to try to balance the network. The Fair Access Policy, which limits heavy users, has been adjusted twice to curtail the aggressive users who thought they were getting away from the onerous DirecWay FAP only to find a equally restrictive FAP at Wildblue. Several of the regional uplink gateways have insufficient routing and terrestrial connectivity to take on any more customers, even though the satellite they beam to has more than enough capacity.
Subscribers are currently complaining of very slow speeds during "prime time", packet handling errors which often result in dropped connections, inability to utilize voice over IP, and outages of durations which leave many with a bad taste for making the switch to this company.

HughesNet:
After what seemed like a great start, HughesNet has also fallen on difficult consumer times. They agressively went after the upstart rival Wildblue during the summer of 2006 and got a lot of business. They may have gotten more than they bargained for as the network has gone from tolerable overcrowding to unbearable speeds and pings at times.
They rushed a new modem onto the market (HN 7000s) which touted the new improved DVB S2 packet handling capability. This new modem was sold as a way to lessen the crowding of transponders and improve downloads by up to 30%. The problem is they only had ground equipment in place to handle two of the 9+ satellites they have customers pointed to! Many subscribers who "bit" on the upgrade or bought this new technology are reporting no improvements in speed, even on the updated DVB S2 satellite gateways.

Next year might prove to be different as both Wildblue and HughesNet plan to launch ka band satellites which are designed to provide a better consumer experience, but in my opinion, 2006 is a mess at best and a disaster at worst.
UPDATE:
PETAH TIKVA, Israel, Sept. 28, 2006/Satnews Daily/ — Gilat Satellite Networks Ltd., (Nasdaq:GILT) announced on Wednesday that its top creditor, York Capital Management, has exercised its option to convert all of its $70.4 million loan plus accrued interest of about $1 million into approximately 10.6 million ordinary shares of the company.....Amiram Levinberg, chairman and CEO of Gilat, said York’s decision to shift its position from a debt holder to a shareholder is a strong vote of confidence in Gilat and significantly strengthens Gilat’s balance sheet.”
This makes York Capital a 33% owner of Gilat, which in turn owns Starband. What does this mean? Well, they will lose 6+ million less per year, since that is the amount of interest each year that has effectively been forgiven with this move. Of course, I'm assuming they will fall back into the red after posting a nominal profit this year....stranger things have happened in this industry, so stay tuned.

HughesNet moves one step closer to ka band service....

2006-08-28T05:03:00.000-08:00

HughesNet announced lsat week that they have completed a extensive 30 day testing program on the capabilities of ka band internet on the Spaceway II satellite owned by DirecTV Group ( the former owner of Hughes). This testing came as part of the purchase agreement between HughesNet and the DirecTV Group unit of NewsCorp at the beginning of this year. HughesNet plans to launch their own ka band satellite, SpaceWay III, early in 2007 and be operational by late in the year.

“Completion of over-the-air testing on SpaceWay 2 is a significant milestone for Hughes and indeed for the satellite industry,” said Pradman Kaul, chairman & CEO of Hughes. “Confirmation of SpaceWay's fundamental technological advantages, namely on-board switching and ten times greater capacity than today's Ku-band satellites, means we now can plan our commercial service launch in 2007 with high confidence in its unique cost/performance benefits. We anticipate that SpaceWay will expand the addressable market for broadband satellite IP services by four times or more.”

According to Hughes, its SpaceWay architecture can scale up to two million terminals per satellite and will provide coverage with multiple spot beams across the U.S. including Alaska, Hawaii and Puerto Rico, as well as in selected areas in Canada, Mexico, and major cities in South America.

I believe HughesNet realizes that the U.S. consumer internet market is overcrowded and will be setting sights on the likes of Mexico, Central & South America, where infrastructure is still in early development. With the claim that a single SpaceWay satellite can handle up to two million customers, they will certainly be looking for new markets. Since the Spot Beams on SpaceWay satellites can be steered from one area to another, they can "chase" the market if they choose.......something the competition's bird, Wildblue I, is not able to do.

MotoSAT XF3 series mount

2006-08-03T12:32:00.000-08:00

Emergency Response Never Looked So Cool....

2006-08-03T12:23:00.000-08:00

MotoSAT, the most respected name in motorized autopoint satellite internet has just announced their new XF series mounts. Stronger, faster and more reliable than anything previously manufactured. Combined with a D3 Controller and a clear view to the south, this unit can have you sailing along the internet highway at 5000/768 kbps in less than 4 minutes.
You can find out about how to get one or a dozen of them by calling Randy Scott toll free @ 866-978-4613

FAP...the necessary throttle used by most ISP's

2006-08-02T18:21:00.000-08:00

FAP, or better known as "Fair Access Policy", is the action Internet Service Providers utilize to try to keep service levels as close to the advertised speeds as possible for consumer and low end enterprise satellite internet products. For those not familiar with this mechanism of throttling users who "use too much too quick", all users of the major consumer satellite internet providers, are made aware of limitations of daily use when they sign up...usually! There have been some providers, like Wildblue and Unasat, who found out that they either needed to change the limitations (Wildblue) or go from no FAP to a policy that implements FAP - after the fact, as in the case of Unasat.

Most users of the internet via satellite never have a problem with these limitations; however, some of the companies are more punative than others when you do go over the limitations. As a prospect of a satellite service, it is very important that you are completely familiar with the company's policy regarding FAP before you sign the dotted line.

As of August 1, 2006 the most punitive FAP on the market is Wildblue Communications...if you ever hit it. They have a fairly liberal monthly (only ISP to do it that way) allowance for internet activity, but if you go over that allowance, look out! You will be throttled back to 128/28 kbps for at least 10 days and possibly as long as several weeks. That is crawling!

Next in line is the Unasat ku band Surfbeam platform. They have decent enough daily allowances, but use the same refill rates (throttled rate) for a $59.99 per mo. service as they do for a $700 per mo. service....that is, if you hit your daily allowance you will be slowed down to 128 kbps download/ 28 kbps upload for the balance of the 24 hour period, regardless of your service level......not cool.

The best thought out FAP program on the market today is HughesNet, not that anyone likes it, but at least it allows a fair amount of downloading before you are slowed down, and is far less punitive for higher levels of service.

You can judge for yourself, if you can figure them out, by going to the following sites to see the actual FAP policies:
Wildblue FAP: http://www.wildblue.com/legal/fair.jsp
Unasat FAP: http://www.datasatplus.com/datasatplus/files/DataSatPlus%20Sat%20Service%20FAP.pdf
HughesNet FAP: http://www.hughes.com/HUGHES/Rooms/DisplayPages/layoutInitial?Container=com.webridge.entity.Entity%5BOID%5BBD8BE0839F414B4FB7CDDCA10EFA5369%5D%5D

HughesNet now in the Upload Speed Lead....

2006-06-26T16:32:00.000-08:00

HughesNet took over the upload speed lead in U.S. shared bandwidth service offerings recently by making the highest level of upload service, 1000 kbps, formerly offered only to Enterprise accounts, available to all of the 7000 series equipment they sell through Value Added Resellers. It requires at least a .98 meter dish and two watt transmitter to work at those speeds and a 1.2 meter dish is recommended for fringe areas like southern parts of Florida, Texas and California.

This level of service and speed is not cheap for the home user at about $400 per month (or more for mobile users), but for Small and Medium companies as well as Emergency Response units, it's the fastest thing short of $3000 per month on a satellite in the U.S. right now! It should enable users to successfully do Voice Over Internet Protocol (VOIP) with multiple lines and improve VPN connections by a fair margin. For those types of businesses requiring larger upload capacity, it will be fast enough to handle multiple surveillance cameras and even limited live broadcast remote capability for smaller Television stations.

Stay tuned......the competition for Business customers is heating up in the U.S. now and HughesNet is trying to lead the way... To learn more about the HughesNet Access 400 service, call Randy Scott @ 866-978-4613.

DirecTV & DishNetwork sign up with Wildblue....

2006-06-09T15:01:00.000-08:00

In a startling move today, Wildblue Communications landed both DirecTV Group's DirecTV and EchoStar's Dish Network to 5 year wholesale distribution agreements to offer their Wildblue "powered" ka band internet service to current and future satellite TV customers.

As both of the satellite TV competitors have previously indicated (or the rumor mill suggested), they want into the bidirectional satellite internet business. Why? With the upcoming boom in HDTV, both companies are counting on beating cable companies to the finish line with more channels, better quality high definition and higher dependability. If you are going to capture that much of the market (and I believe they will), why not include broadband and make money on it while you are at it?

Although the initial offerings will require two dishes (which will go over like a lead balloon), as soon as the two companies can transition all HDTV to the ka birds they both own (each has two right now), it will be pretty easy for either DTV or Dish to offer both services on a single dish with what are called multiple LNB's (the device that brings in signals).

I wouldn't look for either DTV or Dish Network to have services available until Wildblue 1 goes up late this year....there just isn't enough capacity right now and I don't believe Wildblue wants to share this bonanza with the folks at Telesat (owners of Anik F2....the current satellite used by WB).

This is turning out to be a very active year in the satellite internet business.......remember, HughesNet will also be getting into the ka band internet game early next year with SpaceWay III. I wonder if they can fashion a deal for TV with anyone?

Consolidation of Satellite Internet Industry

2006-05-07T03:27:00.000-08:00

The winds of change are blowing in the vsat satellite internet industry...again! During the next six to twelve months I expect to see a good number of buyouts of companies who are not able to keep up with the rapid changes in technology and the costs associated with staying in the race for satellite internet customers. The area of greatest consolidation should come to the Small Business to Enterprise sector, where providers are repeatedly failing to meet customer expectations of value for cost.

At the present time, most of the traditional resellers to small business, government and commercial accounts are in deep financial trouble or at best breaking even ......which should come as no surprise considering nearly all satellite owners are losing money. Why? Space segment is very expensive... and I really mean it! Only a very small group of enterprise level companies and government entities are able to afford the true high speed offerings. The companies willing to pay $1,500 or more per month for a high end service package will be happy with their performance, but precious few can afford to pay that for broadband.

There isn't enough demand relative to the competition for commercial vsat broadband outside this group, so all types of pricing games are being offered right now to entice companies to buy equipment and service either as a replacement for dial up (believe it or not, some companies still use dial up!) or as a emergency backup. Some of these offers are flat out "bait and switch" schemes and the companies offering them are destroying the reputation of the industry. Fortunately, they are the companies I predict will fall by the wayside later this year. Buyer beware!

Internet providers keep clinging to the notion that if they "water down" the platform with subscribers somehow they can sell satellite internet service for a price that is palatable. The "watering down" is referred to as contention ratio in the industry. The balancing act has historically been a roller coaster customer service ride, in which things start out fine for customers.......provider adds too many new customers so performance goes down hill........customers start screaming about bad service.......provider adds a new transponder.....everyone is happy again and it starts all over. It's a joke of a business model, but unfortunately, the only way people will buy in mass is if service plans are priced between $50-$200 and the only way a provider has a chance to make any money is to keep the contention ratios too high for good performance unless you are doing internet things at 3 AM!

Well, I've identified the problem.....so what is the solution? Good question. The only hope I see for better service at affordable prices for small to midsized commercial users of vsat internet in the next year or so is the introduction of DVB S2 packet handling (which promises to improve speeds/performance by 30%) and the more widespread deployment of Ka band vsat internet (which still has it's share of hoops to jump through) coming at the end of 2006 into 2007. Beyond 2007, who knows....maybe someone will find a way to overcome the speed of light....

Customer Is Always Right?

2006-04-05T06:23:00.000-08:00

In the satellite internet business there are countless specifics that affect the quality of installation, quality of signal strength, total cost of equipment, shipping and installation. Successful relationships always involve give and take. To get the most for your money, develop a "partnership" with the company you buy from rather than starting with an adversarial approach and you will be amazed at how well good satellite companies will work with you.

Here are some tips:

1. Don't "leave out" important information about what you need to do on the internet...thinking it will result in a lower monthly cost or less expensive equipment cost. You will end up short-changed in the end and only have yourself to blame. Outline all of your activities in advance of calling a good satellite company and then decide what you can afford to spend. You might have to stop doing some of the things you are used to doing on a T1 or DSL line in the city...but look at that view you have!

2. Tell the truth about where you are located. Satellite internet companies are used to shipping and installing in remote areas. A great way to save on shipping is to have the equipment sent to the installer in a decent sized city instead of bringing it all the way to your mountain retreat! To get a good installer to come to the middle of nowhere offer an incentive...it could be a good meal, money or use your imagination!

3. Don't demand that the install be done "yesterday"......it takes time to assemble the specific equipment needed for your situation, coordinate the shipping and arrival of a qualified installer. If you insist on instant gratification, you might wind up with a satellite TV installer who doesn't know squat about dishes with transmitters and how to correctly bring in the signal needed for two-way satellite internet. Additionally, you might get the shipment of equipment overnight, but it was packed so quickly that it has missing parts and you are back to square one. Patience is a desired quality when dealing with these type of products and the companies that sell and install them.

4. Do some homework before installation day. Read up on what a good installation should look like and what steps the installer should take to correctly mount your type of satellite dish. Be on hand to watch the actual install. Don't allow the installer to come on a bad weather day. Don't be bashful about asking why something that doesn't look right is being done.

Having done the above, your chances of a good satellite internet experience will improve and indeed, you the customer will be closer to "right".

HughesNet standoff with VAR's

2006-03-09T13:20:00.000-08:00

There is a big standoff underway between HughesNet (formerly DirecWay) and at least two of their long time VAR's - Skycaster's and Optistreams. Both of these VAR's have apparently stopped selling HughesNet products (DW 7000/7700 and earlier models DW 4020 & DW 6000). A letter went out to customers from at least one of these VAR's last week stating basically that service to their customers might be shut off on March 8th.

Well, as of Friday March 10, it hasn't happened.....yet. Is this a high stakes game of chicken, or will Hughes Communications, Inc. flip the switch and put some 3,500 customers in the dark?
Update: As of Friday March 17, no Skycasters customers have been turned off. I learned today that at least some of the accounts will likely be "transitioned" over to HughesNet.
It appears that Skycasters has made some type of deal with Hughes to hand at least some accounts over to them in order to buy some time to figure out a transition that won't totally cut off a large income stream they have enjoyed for several years.

In most of these VAR agreements, non-payment of outstanding bills by the VAR is the most common reason a company like Hughes Communications would threaten to cut service off and take over the accounts themselves. If you have service with Skycasters or Optistreams, I would suggest you develop a game plan to protect your connectivity to the internet.
If you need counsel or actually are cut off, call 866-978-4613 and you can get help from VSAT U.S.

Has Rupert gone "Daffy"?? Yes I believe so...!

2006-02-12T08:12:00.000-08:00

UPDATE:

DirecTV Group Inc. said on Feb. 7 fourth-quarter earnings more than doubled as the satellite television operator's subscriber base grew and it changed its accounting for set-top boxes. The company said net income surged to $356 million or 29 cents per share, in the three months ended Dec. 31 from $121 million, or 9 cents per share, in the year-ago period. Fourth quarter revenues increased 16 percent to $4.18 billion and operating profit before depreciation and amortization more than doubled to $915 million compared to last year’s 4Q.
....That's what I'm talkin' about! Why dump a money machine to get 16% back from Liberty Media? Strange thinking by my standards....

October 2006 Article:

Ok, I admit this isn't about satellite internet......but it's pretty interesting stuff if you have followed the NewsCorp rise over the last decade or so. Rupert Murdoch has built a powerful media company with newspapers, TV stations and satellite TV at the core of it all. Three years ago he bought all of the useful Hughes Corporation assets...DirecTV (satellite TV) & DirecWay (satellite internet). Then he turned around and sold off the DirecWay internet business to concentrate on the TV by satellite business?...Well, maybe not....

Rumors have been flying for about 4 months or so that he was going to sell out the DirecTV Group to John Malone's, Liberty Media, so he could get them out of his hair (they own between 17- 19% of NewsCorp). Actually, it's more of a trade of assets deal to circumvent a bunch of taxes....only about 2 billion in cash might change hands when all is said and done.....IF it is actually done. Both parties have been pretty quiet for several weeks now. Maybe Rupert has changed his mind?? Who knows, but with satellite TV kickin' some pretty good cable TV ass right now, I surely don't know why he's letting go of a money machine......
On the other hand, if I knew how Murdoch thinks, maybe I'd be a billionaire too!

The obsession all the big boys in this business have with the "Triple Play" and "Quadruple Play", where all of your communications billing comes from one company, seems to be completely over emphasized. I really don't think savy consumers care if they have a single bill......most are smart enough to do some shopping around and pay bills over the internet anyway....."So What", if you have to push the "Enter button" two or even three times instead of once to pay your Phone, TV, Internet & voip bills...especially if it saves you money!! As an example, I'm personally saving $50.00 per month by buying "a la carte".

Get to know your satellite!

2006-02-12T07:58:00.000-08:00

During the last 12 months or so there have been a fair number of satellite ownership changes , name changes of satellites and a few new birds coming into the picture....why should you care who owns the satellite you are pointed to and what it's history is? ...I'll tell you!

The risk of a total failure of most of the satellites in orbit over the America's today is actually very small; however, the performance of the satellites, earth equipment (Network Operations Centers for example) and ground personnel can vary greatly.

During the last few years a good deal of consolidation and financial turbulance has occurred in the ku band satellite world: Loral Space has gone into and out of Chapter 11 Bankruptcy, Satmex has been on the brink of Bankruptcy for over 2 years and PanAM Sat has been bought by Intelsat. Additionally, Loral has sold several satellites to Intelsat. The only major satellite owner covering the America's with a good degree of stability during this period is SES Americom and to a slightly lesser degree, Intelsat & Telesat of Canada.

There are several teleport operators who have "sprung up" during the last two years as well. A teleport operator is the company that actually links your satellite dish with the satellite you are assigned to and leases the "space segment" from a satellite owner. These operators vary in experience and quality of equipment. There are too many who are "uplinking" with antiquated equipment, inaedequate teleport dishes and NOC personnel with limited training or experience. It's a very good idea to ask your provider how long they have been in the teleport business before you sign up with them!

There are a few satellites covering the America's with what I'll just call "issues". Some teleport operators have chosen these satellites to put customers on because they can lease "space" on them for much less money than more stable birds ...and here is the list:
1. SatMex 5 - This is a decent enough satellite; however, the folks at SatMex don't have any money and have not done a very good job of load balancing, customer support or problem solving for the operators leasing transponders from them over the last year. They need revenue from SatMex 6 (not yet launched) or they will have even more serious problems.
2. Intelsat IA 7 - This satellite is operating fairly stable today; however, it was the satellite that suffered a total failure for about 24-72 hours in late Nov. 2004 which put thousands of Starband internet users in the dark. The satellite was partially recovered and is operating "ok" at this time....but the exact nature of the "anomaly" has not been well explained or understood and it could happen again.
3. Intelsat Telestar 14: This satellite failed to deploy one of it's solar panels during the initial setup and has never been able to operate at full capacity (only using 17 of it's ku band transponders). Although the transponders being used are functioning ok, there will always be power constraints on this bird.

As previously stated, it's a real good idea to know as much as you can about the Satellite Internet Service Provider you are dealing with, their satellites in use and how advanced their Teleport is before choosing them. In most cases you are bound by a 12 month service agreement and a wrong choice can be downright purgatory.

Voip & Consumer Satellite Internet: Does it Work?

2005-12-26T11:55:00.000-08:00

For a fairly small but growing group of individuals and small businesses, voip via satellite internet is the only phone service available for some areas of the U.S. and Canada. Regretfully it suddenly stopped working for consumer customers of DirecWay last summer and has never worked very well for Wildblue users in the U.S. The ka band users in Canada (Telesat Canada) seem to be able to connect some voip products without too much difficulty. Why does it work for some and not others? Why did it work acceptably for U.S. DirecWay customers for a couple of years and suddenly stop working in the summer of 2005? I think I partially know the answer - it's called maximizing profitability!

Yes, the most likely reason voip has suddenly gone kaput in the U.S. for DirecWay users has a lot to do with the way DirecWay has chosen to handle upload data packets. Without boring you with a level of detail that would likely get me in over my head, I believe that DirecWay (and Wildblue for that matter) have discovered that by increasing the "burstiness" and packet handling (dropping more packets and not resending them) of the upload or inroute traffic and making some other changes at the Network Operations Centers that completely elude me (Wildblue calls them Gateway's), the two internet providers can all but eliminate voip traffic. Additionally, they can probably give users a bit better speeds during "prime time" usage. Whether it was done purposefully or by accident remains unknown and no one to my knowledge has been able to give a detailed reason or for the sudden voip crash. Theories abound, but that is another article and better done by Engineers.

Both companies have stated publicly or privately that they don't support voip traffic; however, DirecWay has indicated they are going to offer a "proprietary" voip product sometime in early 2006...very interesting! No public word from Wildblue, but they are in fierce competition with DirecWay for market share and are probably working on some type of offering as well. How will they do it? They will likely "route" this proprietary voip traffic that you buy from them through different equipment at the NOC's or Gateway's so it will not be subject to the degree of burst and jitter that is now present.

There has been a lot of energy expended by former voip users trying to get some product to work over a DirecWay or Wildblue connection. The only products that are remotely successful are outbound only calling products which use the Crystal Voice ( http://www.crystalvoice.com/ ) technology. It seems to be more "adaptive" to rapidly changing conditions of a satellite connection. They have their own product available and sell the technology to Net Zero and perhaps some others...all are outbound only as far as I've seen so far.

If you are buying satellite internet in order to get telephone connectivity to a remote area the only satellite connections I am sure will work with outbound/inbound calls are all considered "Enterprise" connections. Satellite Ground Stations like ku Band Surfbeam, iDirect or the DirecWay 7700 series will work with most any voip solution out there. You can get more information about all of these solutions here: www.vsatus.com , email: randy@vsatus.com or call Randy Scott toll free @ 1-866-978-4613.

Ku Band Surfbeam - It Works Well...

2005-12-20T12:10:00.000-08:00

I have been testing a Ku Band Surfbeam groundstation for a fairly new entrant in the vsat world, Unasat Communications LLC for the last 4 weeks. They are affiliated with one of the largest independent telephone companies in the U.S. - Wood County Telephone Co. out of Wisconsin.
The standard vsat internet setup is a 1.2 meter dish, the Surfbeam SM-1000 modem and either a two or four watt transmitter. I have tested both the 2 watt and 4 watt setup's and must say they are impressive. The speeds are dependable, pings are enterprise quality over 80% of the time and voip works flawlessly.
The 4 watt setup is downright enterprise speed and quality. I have 5000 kbps downloads and after some adjustments now see uploads in excess of 600 kbps regularly.
This is not a setup intended to compete with consumer products in price, although the most expensive equipment can be purchased for less than $2,000 and installed for about $500 or so. The two watt setup is priced around $1,250 with similar install costs.
The service ranges from a Small Office setup (500/128 kbps) to the Enterprise setup I have (5000/768 kbps). Monthly cost starts at $49.95 and tops out at $629.99. The service has no monthly limitation on usage; however, they do have the right to throttle you if you are an abusive customer. The nice thing about this approach is that for those who need to download an update to their operating system, the service will accomodate you without any throttling.
The satelllite used for this service is Intelsat's IA 8 which was launched last year and is state of the art ku band technology. The modem and uplink equipment is manufactured by ViaSat. This is the DOCSIS technology of packet handling which is proving itself to be a competitive, stable and dependable alternative to Digital Video Broadcast methods used by most of the ku band internet providers including iDirect.
For more information about this new product, contact Randy Scott at 1-866-978-4613 or email Randy
at randy@vsatus.com

Wildblue Communications....Ka Band Chaos?

2005-12-19T08:00:00.000-08:00

The faithful early adopters of Wildblue Communications new ka band satellite internet service are trying their best to make the best of it these days. Seems the fledgling new satellite internet provider and first company to offer the long awaited ka band satellite internet service is having more than a bumpy “rollout” of new service – it’s downright chaotic right now by some users comments I've seen.

Customer equipment is failing after only 1-2 months in service; Regional Network Operations Centers are adding, replacing and upgrading due to inaedequate gateway equipment capacity; the installers for Wildblue have not been adequately prepared for the issues they have encountered in the field and the new customer base of just under 25,000 is growing impatient about the job being done by the NRTC and Wildblue to keep it all glued together.

With outages more frequent than the chief competitor DirecWay has seen in a while, a good number of new users of the Wildblue ka band approach are second guessing themselves right now. There are a few folks who changed to Wildblue’s new service and kept their DirecWay or Starband dish setup's having to rely on those connections now for connectivity during outages.

One of the original Master Distributors not related to the NRTC effort, RS & I , decided to pull out of distribution of the Wildblue products back in September and the CEO (and co-founder) of Wildblue has been replaced with a operations oriented executive from Liberty Media. He has his hands full…as problems are cropping up faster than the Wildblue staff can solve them. Customers are posting dismal upload speeds on the Wildblue user forums, reporting daily outages of 5 min to 5 hours and complaining of “clueless” tech support personnel and installers who don’t follow established procedures during installations.

Wildblue and the NRTC appear unable to solve the problems with several "beams" and in a rush to quell the criticism are sending technicians out to swap out transmitters, modems and cabling...it's beginning to look like they may not have an effective game plan for dealing with inevitable "issues" that occur in this industry. In their defense, Wildblue has been quick to admit to the issues and maintain they have a plan to straighten things out as quickly as possible...a most refreshing change to what has gone on for quite some time in this industry, but it remains to be seen if they can deliver advertised speeds and continue the rollout of this new service at a pace competitive with other service providers in the market now and those coming online soon.

On a separate but equally important front, Wildblue Communications is operating at a significant loss right now with so few customers and will need an influx of operating capital very soon to continue the introduction of services and handle the replacement and upgrading of so much field equipment. I would expect an announcement soon about Telesat or Liberty Media injecting capital or perhaps merging the company into their own…….I would be surprised to see any more money coming from the NRTC – the membership Coop's are also losing a lot of money on this venture and are not likely to be happy with how things have gone so far.

Stay tuned….this is an emerging story.

iDirect Faces Competition from Surfbeam & DirecWay...

2005-10-12T05:30:00.000-08:00

For the first time since introduction about 3 years ago, the highly touted iDirect Enterprise Satellite Internet platform is being challenged by two less expensive platforms: DirecWay's DW 7700 and ViaSat's Surfbeam ku band setup. But can these lower cost solutions actually deliver? Here is the early comparison:
1. Cost:
The iDirect setup traditionally has cost in excess of $1,800 for equipment (1.2 meter dish and two watt transmitter) + installs ranging from $499-$799. There are a few companies offering it for less, but with fairly long terms on the service to make up the difference.
The DirecWay 7700 is selling for about $1,600 plus install of $500 for the 1.2 meter dish setup with 2 watt transmitter. You can buy the DW 7000 Business Internet version for about $1,000 (attains the same speeds, but a few frills are missing) .
The ViaSat ku band Surfbeam setup is selling for about $1,600 for the 1.2 meter dish and a 4 watt transmitter plus install of about $500, the lowest price of all offerings in this comparison given the more powerful transmitter is included. The 2 watt setup sells for less than $1,000 plus installation (provides up to 256 kbps uploads - so not evaluated).

2. Latency:
The only vsat product on the market today that can compete with iDirect in this area is ka band Surfbeam (Wildblue Communications). The DirecWay setup is fairly close, but still running some 75 - 150 ms behind the iDirect figures which are pretty consistent in the 575-700 ms range.
The Surfbeam ku setup hasn't been on the market long enough to compare; however, I should have a test system very soon and will post results. Since it uses a modem much like the ka band Wildblue setup, it might prove to be a worthy competitor in this area.

3. Shared Bandwidth:
This is where things become very confusing for most Business Grade vsat buyers. The least expensive monthly service options are "shared bandwidth", which for all but the U.S. Government and giant corporations, is all that is realistic to talk about. Dedicated bandwidth is extremely expensive and very few opt for it. The problem with shared bandwidth is not all shared bandwidth is created equal!
This is the most convoluted and often misrepresented area of the satellite internet industry. Most satellite providers are very reluctant to tell you exactly how many folks you are sharing the bandwidth with. It's called the contention ratio or contention rate and it's crucial to how well your satellite service will perform. Most experts regard anything below 20-1 as true enterprise grade shared bandwidth; however, with the efficiencies that have resulted from both DirecWay's new 7000 series platform with DVB S2 technology and the DOCSIS platform utilized in ViaSat's Surfbeam ku modem, some are saying that contention ratios up to 60-1 will work competitively with the iDirect setup running at a 20-1 rate.
Tthe iDirect platform needs the lowest contention ratios to perform competitively with other setup's from my experience. This is where the competition really begins for iDirect...it only works great when lot's of bandwidth is available...and that can get expensive. There are several companies trying to push the limits of contention ratio out there right now with the iDirect setup and the customers are screaming about slow speeds and high latency.
The DirecWay DW 7700 has the most concurrent TCP/IP sessions to the internet than the other packages in this comparison. The DirecWay connection will not "degrade" as fast as strictly IP type connections, so more users can be on the net simultaneously...a nice advantage for DirecWay. To further understand this complicated area of satellite internet, call a professional vsat sales engineer with a reputable company.

4. Monthly Cost:
Since we are limiting this discussion to shared bandwidth, I will compare the products using the most popular speed requested: 2000 kbps download and 512 kbps upload speeds.
A. iDirect: The least expensive monthly service with acceptable contention ratio I'm aware of runs $599 per month with no usage limitation. There are many "low ballers" out there, but you are strictly limited in the amount of usage per month or the costs literally soar. One package is $350 per mo, but has a limit of 3 GB per mo. total usage and .09 cost per MB thereafter.
B. DirecWay Business Internet: $199 per month. There is a 1250 MB threshold (FAP)- so you are slowed down if you do a very large amount of downloading in a short period.
C. Surfbeam ku band: 3000/512 is the closest plan I could find and it runs $350 per month. It has no limitation on usage per month at this time.

5. VPN & VOIP:
Since the iDirect setup has the lowest latency of all systems tested, it will handle IPsec vpn the best. The Surfbeam ku setup might be equal when thoroughly tested, and it's a pretty safe bet that the DirecWay 7700/7000 series will come in third due to higher latency, although better by far than anything they have offered in the past. Keep in mind that no satellite internet setup will do a great job at an IPsec vpn tunnel. Expect 50-70% degradation.
The folks needing Voice over IP will get very good results over a iDirect or Surfbeam setup (by satellite internet standards) and will not be able to use DirecWay's setup for voip at this time.

Business Internet has improved over the last three years for those who can't get terrestrial service, but it has limitations that can still provide plenty of frustration for users. Which setup you choose will depend a great deal on your needs and budget....to get straight answers and the right fit for your company, call a professional who is not "married" to any of the providers.

-by Randy Scott - Owner VSAT U.S.
http://www.vsatus.com/

Playing Hardball... Consumer Satellite Internet Competition

2005-09-28T10:19:00.000-08:00

DirecWay took the gloves off and came out swinging at Wildblue over the last few weeks. With the experience of over 10 years of satellite internet under their belts combined with the sloppy rollout of Wildblue through the NRTC to exploit, DirecWay's new DW 7000 is selling like hotcakes.
The new DirecWay 7000 is strong competition for the fledgeling Wildblue for several reasons:
1.It has faster speeds (albiet more expensive per month).
2.Similar low latency...at least by satellite standards (usually under 800 ms).
3. Compatibility with many voip products (which Wildblue hasn't been able or willing to support).
4. Availability of static IP addresses (required by a good number of vpn teleworkers) - Wildblue doesn't offer them.
5. Immediate availability (Wildblue won't be available to much of underserved America until the end of 2005 or even early 2006).
6. An Installation group with many years more experience than the NRTC recently trained installers for Wildblue.
7. A Network Operations group with 10 more years of experience than Wildblue has.
8. The 7000/7700 series equipment can be mounted on vehicles for mobile internet anywhere in the U.S.. The Wildblue setup cannot be used outside of it's original "beam" without cancelling account and recommissioning.
The new Network Operations Center constructed for the DirecWay 7000's is in Las Vegas, NV. It is state of the art and in a weather friendly part of the country (vital for high uptime). The gateways are specifically designed for the 7000 family of equipment now sold by DirecWay and they utilize the recently created Digital Video Broadcast S2 (DVB S2) packet technology which improves effeciency by up to 40%....not as efficient as ka band internet, but very close. What this means is that DirecWay can deliver faster speeds with the same number of customers they historically have to put on satellite transponders to make a profit.
The bonus for DirecWay is the fact that the equipment involved in the rollout of the DW 7000 series (7000 is consumer and 7700 is for Enterprise) is Ka Band compatible. When (or should I say "if") DirecWay's Ka Band SpaceWay III is launched, much of this equipment will work with the new satellite and technology.
Will the DirecWay rollout of DW 7000's spell doom for Wildblue? I rather doubt it, but Wildblue needs some working capital pretty soon from all indications and this is a fairly hostile high tech investment market right now. DirecWay(SkyTerra) is slightly profitable right now and in a better position to market their new offering than Wildblue.
What Wildblue has going for it right now is a U.S. based Customer Support group with a very good attitude and distinct English is spoken. This could always change as the number of customers increases (currently at about 8,000 compared to DirecWay's 250,000 or so).
The next three to four months should be very important to both companies in the competition for the consumers unable to obtain Cable, Wireless or DSL high speed internet connectivity.

Direcway 7000 Series and DVB S2 Technology

2005-09-07T13:26:00.000-08:00

Direcway has started delivery of all 7000 Series products with a new satellite, new uplink center and new packet technology - DVB S2. It promises to utilize bandwidth as much as 40% better than standard DVB S and allow Direcway to compete with iDirect platforms in the enterprise area and ka band offerings like Wildblue in the consumer sector.
Download and Upload speeds are much higher than Direcway has ever offered...up to 2000 kbps downloads and up to 1000 kbps uploads are offered with the DW-7700. Latency is also lower - in the range of 600-750 ms (compared to 675-1200+ ms on DW 6000 offerings).
Additionally, Direcway has rushed the consumer DW 7000 to the market in part due to the slow rollout of Wildblue Communications ka band product. The DW 7000 has download speeds up to 1500 kbps and uploads to 500 kbps at prices similar to Wildblue.
The new satellite they are uplinking to is Intelsat's IA-8 which was launched this spring and has a footprint over all of the U.S. and the Caribbean. The uplink center is state of the art and located in Las Vegas, NV, where weather is far better than the facility used up to now in Germantown, MD. for most of the Direcway services.
Early adopters have reported very good speeds with .74 to 1.2 meter dishes. Latency is higher than Wildblue for the consumer products in the early tests, but not enough data has been gathered to give a clear picture yet.
There will be more new vsat offerings coming during the next 12 months or so with more speed and features, but for now, enterprise and consumers not able to obtain terrestrial high speed internet will certainly get more for their money than has been offered in the past.
For additional information on the Direcway 7700 & 7000 see:
http://www.vsatus.com/Direcway%207700%20Service.htm

Tom Moore Steps Down as CEO of Wildblue Communications

2005-08-23T16:50:00.000-08:00

In a somewhat surprising move today, Tom Moore stepped down as the CEO of Wildblue Communications. The rollout of Wildblue has been slow and many have said a bit too bumpy. There are only about 5-6,000 customers on the books since the first customer was brought on board in early June.
Here is what Tom Moore had to say: "My contribution has always been in formulating ambitious dreams and starting things from scratch...WildBlue now needs a world-class operating CEO to drive the company to the next level of success."

Here is what Bob Phillips, President of the NRTC (big investor in Wildblue) had to say: "I interviewed and voted for David Leonard for the position of chief executive officer. Leonard’s forte is business operations, and I am confident that he will provide the focus necessary for successful operation of the company."

Here is what Mark Carleton, Sr. VP of Liberty Media and Chairman of Wildblue said:
"We look forward to his continued involvement at the board level."

Here's what I have to say: "The boys at Liberty Media and the NRTC got together and decided the Wildblue Internet rollout was not going well at best and a near disaster at worst. They wanted to try to stop Direcway from cleaning their clock with the DW 7000 introduction Sept. 1st and knew a change needed to be made quickly to get the momentum going again." - remember, I wasn't invited to the board meetings and none of the participants have called me to illuminate....so I am just tea leaf reading here! David Leonard was a top executive of Liberty Media.

Stay tuned.....it's getting more interesting each week!

Direcway & Wildblue set to square off this fall?

2005-08-01T04:58:00.000-08:00

There is a cat fight brewing between Direcway LLC, Starband and Wildblue Communications for the large number of people in the U.S. who can't get some type of broadband internet and are willing to pay $50 or more to get better speeds. The combatants are telling investors that there are 20-30 million "potential users" out there in rural or under served America...true, but the historical fact of the matter is that up to now, only 500,000 or so have been willing to pay as much as $50-$100 a month for the "so called" high speed services offered by Direcway, Starband and now Wildblue.
What has changed to stir all the press and advertising hubub by the companies? The claim is that both the Wildblue ka band and new Direcway 7000 offerings will finally give consumers a more DSL/Cable-like internet experience...ie lower latency and higher upload speeds. They expect that tens of millions of rural Americans will flock to their doors to pay over $50 per month to be "connected". To a degree they are right. It has become virtually impossible to function as a business without broadband internet and it is more and more difficult as a consumer to do without it. Even retailers (who obviously target consumers) are building sites that are very difficult to navigate unless you have a fast connection to the net. Pictures chew up bandwidth.
More and more people have found it less expensive to buy over the net...after all, we are nearing $2.50 gas now and who knows where it will end up. Imagine the cost of going to a store in a rural area in a vehicle that is getting 12 mpg (pickup with a V8) with $2.50 gas? Quick math says it would run you about $16.00 for an 80 mile round trip.....do that three or four times a month and buying at home from your easy chair starts looking pretty good. And you have time left over to plow a few fields if you like. Pretty easy picture to get. The problem is that all too many rural Americans already figured that buying from home is a good thing...they just do it by the old reliable U.S. mail order system. No computer or internet required.
The marketing effort by the "combatants" needs to focus on how much better the experience will be over the net. Perhaps they can throw in some instructions on how to overcome the fear of computers and typing as well. This is what I believe is hampering the efforts to reach rural America by satellite internet...fear of the potential user of new ways of doing things. This is a generational thing...younger rural folks are going to find the internet the only way to travel in the future, but by then WiMax should cover most of rural America with cable/dsl-like speeds and pricing. The point of this piece is to warn investors....don't make a long term bet on Wildblue or Direcway! They will provide a temporary bridge to up to 1,000,000 or so under served rural consumers, but they will never reach the vaulted numbers they strive for and try to interest investors in, and thus, never make much money.

Randy Scott

SatMex Woes Reflect State of Satellite Internet Industry

2005-07-20T05:14:00.000-08:00

Mexican satellite operator SatMex filed for bankruptcy protection in its home country a few weeks ago even as its creditors continued to pressure the company to make a similar filing in the US. SatMex filed a voluntary "concurso mercantil", a type of bankruptcy filings in Mexican courts, citing a burden of over $500 million in debt. Whether the Mexican filing will preclude any Chapter 11 moves in the United States remains unclear. A bankruptcy in Mexico gives Satmex more protection because the company isn't liable for back interest payments. Under U.S. bankruptcy law, the company is liable for such interest payments.

Stories of satellite operators losing big money are common in the satellite internet industry these days, in fact, not a single satellite owner operating in the U.S. is making a profit other than SES Americom, a wholly owned subsidiary of SES Global, located in Luxembourg and possibly New Skies, another European operator with CONUS coverage. The other operators in the America's are spilling red ink all over the place.

There is a curious fight underway between Direcway LLC, Starband and Wildblue Communications for domination of the U.S. satellite internet consumer market. No company has ever been able to show a consistent profit in this sector and yet they keep coming with one new offering after another. Rupert Murdock and News Corp saw the writing on the wall and got out, selling 1/2 of their interest and gave up day to day management of HNS which owns Direcway. Starband has financial problems and no one seems to want to own it (Spacenet has it now). I believe Wildblue is on a very short string with investors and needs to show well this fall and winter in order to keep afloat. The break-even for ka band internet is said to be over 200,000 subscribers (Direcway has 250K ku band customers and has just turned a profit I'm told). It will be interesting to see who is standing this time next year in the Consumer marketplace.
The Good News in this piece is that early tests of both Wildblue and Direcway 7000 series consumer satellite internet are very encouraging...very good speeds and much lower latency (the deal killer for vpn & voip). New adopters have been able to do most anything they could do with a DSL or Cable connection with these new systems and if the speeds and low latency hold up over time, people will buy.

Randy Scott

Wildblue - Direcway 7700 ...you call this a rollout?

2005-07-12T16:00:00.000-08:00

Some things never change...Satellite Internet Providers have a history of Alligator Mouth Syndrome. Both Wildblue and Direcway have managed to stir up all the anticipation that press releases will allow and touted the "roll-out" of both services..."Where's tha Beef"?
Wildblue apparently has equipment problems.....if it isn't the modem, then it's the dish, or the NRTC installers inexperience, or is it the transmitter? Who knows... I've only found a few folks able to use WB yet...granted, they aren't lining up at my door to let me know how it's going (I only dream about having my ears that close to the ground), but there haven't been many reports on forums or press releases by anyone to indicate very many have the service up and running - and this is 30 days into the "rollout" - if you dare call it that. I did see one posting today saying the basic WB service was running at 512/100 kbps on the users first day, but not verified through one of the testing sites typically used by experienced users.
Update: July 19, 2005:
Wildblue had to fly it's technical folks out from HDQ to at least one install this week as a result of the NRTC member installers' inability to accurately point the dish and utilize the right cabling. I don't understand why WB is relying on a group that could screw up a one car funeral...Give a hand to the Wilblue boys who understand damage control as well as anyone.

Direcway has shipped equipment to several Direcway Value Added Resellers....but it it can't be commissioned yet! They haven't given the VAR's any commissioning details and a modem recall is rumored ....so guess what, no installs for at least a week or more.
There are several other companies making noise that they too have new improved satellite internet products coming to the marketplace in coming weeks or months (including Surfbeam ku band, new ka band competitors and a DOCSIS product by Telnor from Norway).......will the Alligator Mouth Syndrome continue?....stay tuned.

For vsat satellite internet solutions that are dependable and available today, call VSAT U.S. @ 866-978-4613 or email sales@vsatus.com
http://www.vsatus.com

Bleeding Edge or Expensive Enterprise Satellite Internet?

2005-06-23T03:53:00.000-08:00

For those businesses unable can't get T1, Cable or DSL service for less than half a year's Gross Profit, vsat (very small aperture terminal) satellite internet is about the only way to obtain decent internet speed. Over the last two years or so many companies have advertised about upcoming solutions to this issue...after all, the internet industry is huge and growing by giant leaps each year.

Let's take a look at what is currently available and what is on the way:

Available Ku Band Enterprise Systems
This is a "catch all" phrase covering the more expensive equipment and service offered by several large uplink comapnies. It is characterized by larger satellite dishes (typically 1.0 meter or larger), more powerful transmitters (at least 2 watts) and less populated transponders than the "residential" or "small business" setup's available from Direcway, Starband and Wildblue. The result is more consistent, faster service.....what most businesses expect.
There are two general avenues you can take regarding speed and throughput: Shared or dedicated bandwidth - and the difference in price is staggering. For most business applications, shared bandwidth (the less expensive choice) will work fine - giving a company 1.5 kbps downloads and 256 kbps uploads over 90% of the time for prices in the $400-$1500 range. The crucial element of ANY offering is the "contention ratio" - how much they oversell the product or the number of concurrent users they allow on a transponder. Any company that does not put the ratio in writing is not worth doing business with - period...and any company with a contention ratio above 20-1 is not offering you true Enterprise service. With dedicated service (Guaranteed speeds) you will spend over $1,900 per month (up to several thousand per month), but will have service that is nearly bulletproof.
The most tested and dependable Enterprise setup available today in N. America is centered around a modem designed by iDirect Technologies http://www.idirect.net. This is a proven system that will give you what you pay for.
Other systems are coming into the marketplace like the ViaSat Surfbeam DOCSIS setup, a DOCSIS product from Telnor and the Direcway DW 7700; however, this is very new technology and certainly qualifies as "Bleeding Edge". Only four companies have the equipment to make it work right now and there are bumps in the road. Surfbeam and Telnor's big promise is a better utilization of available ku bandwidth, but no field results have confirmed this yet to my knowledge. Direcway has some beta equipment in the field right now producing strong results on empty transponders - not a good indication of long term results.
If any of these solutions can produce competitive results over time, it will force iDirect to rethink modem pricing as the DOCSIS and Direcway setups can be installed for about $500-$1,000 less.

Wireless and Satellite Internet Technology On The Horizon

The Satellite Internet world could be turned on it's head in the coming years as WIMAX emerges. It is a grand plan by Intel and others to cover very large areas of the world with a brand of microwave technology capable of sending data extremely fast to small antennas at homes and businesses. The big difference between WIFI and WIMAX is the distance covered by the main antenna.....the claim is 15-30 miles! Talk about bleeding edge....many of the "Big Boys" including Nokia and Cisco have abandoned plans to invest in it and speak of it as a bad business model to try to replace DSL. They point out that there are currently over 15 "standards" for the technology, not exactly a harmoneous start!
Ka band satellite internet for Enterprise has some real promise. The ability to "reuse" bandwidth, if the concept works, will enable companies to have T1 speeds or greater at any business location for much less than a T1 cost. A unit of SkyTerra Communications - the company managing Hughes Network Systems now, is working on advanced ka band spot beam technology to that end.
The greatest challange facing the satellite internet industry during the next 24 months is figuring out how to make profit.....in the absence of someone finding a business model that can show consistant profit, all of the transponder space allocated to internet will quickly be redeployed to HDTV or other types of profitable communication....bet on it!

Randy Scott
Owner VSAT U.S.
"Providing proven satellite internet solutions to business and consumers"
http://www.vsatus.com

Consumer and Business Satellite Internet News

2005-05-30T20:16:00.000-08:00

As the summer of 2005 arrives, several new vsat internet companies have launched products and made promises that are frankly too optimistic and in some cases just plain untrue. In other cases, they have backed off initial upload speed predictions, downgraded the capabilities (such as voip & vpn) and pushed back program launch dates. What started as a very optimistic year for the deployment of faster and less expensive satellite broadband for underserved parts of the U.S. has begun to fizzle.
On the Consumer front, the product offering this year with the most publicity, long anticipated Ka Band spot beam internet, has started to roll out in Canadian markets and will soon begin limited installs in the U.S. by Wildblue Communications. The early users of Ka band in Canada are reporting acceptable download speeds, but the upload speeds are pedestrian by any standard...not very encouraging. The saving grace is that the service is less expensive than offerings like Direcway and Starband. The early tests of Wildblue customers in the U.S. have not been verified or widely published, so we will have to wait a bit; however, the service is coming from the same satellite used for Canadian customers, although it is a different set of spot beams.
The greatest problem for the consumer sector is the inability of providers to earn a profit. This must change in 2005 or providers will abandon the market. SatMex, the Mexico based satellite owner and provider of a good deal of the consumer ku band service in North, Central and South America, was forced into Chapter 11 Bankruptcy court last week by creditors.
On the commercial front, there have been two new types of "Enterprise" priced services emerge this year. Ku Band Surfbeam internet (a ViaSat product- very similar to the ka band modem but for Ku satellites) and a DVB-RCS product from Telnor out of Norway. Both offerings promise faster speeds for less money than their rivals. There haven't been any reliable test results offered by these companies yet to validate the claims. I've seen limited speed test results and nothing earth shattering has come to my attention thus far. There seems to be one thing missing from all of these less expensive commercial products - low contention ratios* - the key to consistent fast service.
*the number of concurrent users on a transponder, put in it's simplest terms.
For those who can't get terrestrial service, whether consumer or commercial, the equation hasn't changed - it still costs money to be guaranteed fast service! The kinds of things many people and companies want to do on an internet connection - connect to home office, use the internet for telephone calls, send or receive large files or stream video and transact business over the internet - remain difficult to do without a $2,500 + setup and monthly cost in the hundreds, when all the dust settles. I don't see that changing too much for two years or more... but I sure hope I'm wrong on this one!

Randy Scott
VSAT U.S.
1-866-978-4613
http://www.vsatus.com

Miraxis -The next great thing?

2005-05-16T21:54:00.000-08:00

Miraxis is a little known ka band satellite internet company which is owned by the same company that owns 1/2 of HNS LLC (Direcway)- Sky Terra Communications. They have developed a "next generation" of Ka Band satellites and technology which they maintain will enable their partners to offer TV, bidirectional satellite internet, ultra fast vpn, on demand entertainment and about anything else you may have dreamed of over satellite for a good deal less than what current, as they call them, "generic ka band satellites"(Are they referring to Wildblue?) now provide.
Sound like science fiction? Maybe not. These guys have very strong pedigree's at the top of the company and have ties with SES Astra, which has ties to SES Americom, which has two ka satellites in orbit over the U.S. right now....starting to get the picture? This may be part of what Sky Terra was after with the purchase of Direcway....a customer base of some 250,000 consumer & small business subscribers they can whisk away to this new technology and team up with Intelsat(launching this summer) or SES Americom to deliver a hefty blow to the efforts of some of the other ka band internet efforts. Anything that happens in this industry would not surprise me!
Their site: http:www.miraxis.net/services.html

Where is Echostar's ka band internet program?

2005-05-16T09:58:00.000-08:00

During the last 6 months, Echostar, who's primary product is Dish Network (a consumer satellite TV product), has leased an enormous amount of ka band spot beam transponder space from SES Americom ( all of SES Americom 16 and a good bit of SES Americom 15). What are they doing with it? Nothing.....they might not be able to afford to do anything right now. This company is in debt "up to their eyeballs"...as the commercial says. With total debt of 8.4 Billion dollars and a deficit net worth (1.8 billion @ 3-31-2005), they could use some serious credit counseling!
It's unclear what they are up to, but it's been said they would come out with a ka band internet product to compete with Wildblue during 2005 and additionally use the ka band space to launch new HDTV channels. I would bet on the HDTV play and not a ka band internet program.....they can't afford it. To me it appears that Wildblue will be the only ka band internet option for the near term...unless, of course, Echostar defaults on the leases to SES Americom.....then look out Wildblue, a giant will be unleashed! SES has made noises they want to enter the ka band internet market, but unless they "buy-back" transponder space on the leases with Echostar (or Echostar defaults), what will they use for a satellite? This mystery will all unfold by August 2005 I predict.

"Heard on the Satellite Street"

2005-05-14T16:15:00.000-08:00

Here's the latest news from two big satellite internet companies:
Direcway
HNS LLC (Direcway) has announced the "Enterprise" service levels for the DW 7700 product they advertise that will be available in June. The speeds are impressive, but at what cost? From my investigation, none of the Value Added Resellers, a big part of their sales effort, have costs or any more information than the Press Release from HNS on May 2nd. I think it is ambitious, to say the least, that they will have everyone "spooled up" to provide this new equipment & service by June....we'll wait and see. The service levels are here: www.hns.com

Wildblue
The NRTC member coop's will get "first crack" at signing up new Wildblue customers. The rumor on the street is that only customers of a Co-op utility will be sold service until it is more widely available through the two master distributors later in the year. The greatest problem NRTC has right now is getting enough installers trained to handle the nuances of Ka band internet. I'm told the NRTC requires specific training which is slightly different than standard Wildblue training and ONLY NRTC trained installers can do NRTC member installs....sounds a bit strange, but that's at least one NRTC member's story. Another member said that was hogwash.....so who knows?
The training of installers, the somewhat limited supply of Surfbeam Ka band modems and some last minute concerns about the wattage of transmitter needed to provide advertised speeds seem to be dragging things to a slower start than late May-June rollout....we'll just have to wait and see on this developing story.
Wildblue waiting list here: http://www.vsatus.com/page13.htm

Rocky

Waiting for WiMax? You may have a long wait...

2005-04-30T07:24:00.000-08:00

There has been a lot of "buzz" in the internet community for some time now about service coming in the near future that could enable Internet Providers to use high powered WIFI (termed 802.16) to provide high speed internet over a 30 mile radius in the best conditions. This approach would eliminate latency, which has dogged the growth of satellite internet (the mainstay for access to rural America) for years.
The bad news is it is very expensive to build out infrastructure....very expensive!
I don't believe it will become universally available for many years. There will be efforts to install 802.16 in densly populated, but underserved, areas and that will be about it - for a good while.
If you have been "holding off" until wimax comes, it might be time to investigate some of the new satellite offerings which we should see in 2005: Ka band internet, Surfbeam Ku band internet, the new Direcway 7000 series modems/gateways and the iDirect platform are the best bets for the next three years or so.
More information about these solutions at http://www.vsatus.com

SkyTerra purchase of 50% of Direcway completed

2005-04-25T10:59:00.000-08:00

April 25, 2005 The DIRECTV Group, Inc. (NYSE:DTV) and SkyTerra Communications, Inc. (OTCBB:SKYT), an affiliate of Apollo Management, L.P., a New York-based private equity firm, today announced the completion of transactions that resulted in SkyTerra acquiring a 50 percent interest in a new entity, Hughes Network Systems LLC (HNS LLC), that in turn had acquired substantially all of the remaining assets of Hughes Network Systems, Inc., a wholly-owned subsidiary of The DIRECTV Group.-courtesy Business Wire.
DirecTV Group received about $246 million in cash and 300,000 shares of Sky Terra stock. DirecTV group, as previously stated in an earlier post, will carry the 50% ownership of HNS LLC as an investment and the management of over 1,300 former HNS employees will be handled by SkyTerra.
“Today, with the completion of our new ownership structure, we start an exciting new chapter in the history of our company,” said Pradman Kaul, Chairman and CEO of Hughes Network Systems, LLC. “Our management team continues and we welcome the new ownership structure, which brings two major players in the satellite industry to join with DIRECTV as our owners, SkyTerra and Apollo Management.”- what else could he say?.....he has a new boss as of today. I give it 6-8 weeks before major management and direction changes occur.

Hold on...Direcway's last gasp? The DW-7000 series is coming!

2005-04-18T11:20:00.000-08:00

In a 8K filing with the SEC on April 5, 2005, Hughes Network Systems (soon to be managed & 50% owned by Sky Terra) let the cat out of the bag and revealed the upcoming introduction of the DW 7000/7700:
"We will continue this tradition with the release of our DW7000 terminal, scheduled for mid-2005, which is expected to increase our customers’ in-route data speeds by as much as 600% and expand service functionality while lowering their hardware costs."
Wonder what expense weary DirecWay customers will have to endure to get what they should have gotten in the first place - high speed internet! Undoubtedly they will have to buy the "box", traditionally costing $500-800 or more(unless you agree to a multi-year deal), change the satellite they are pointed to- usually a $200 charge for a re-point and agree to at least a new 1 year deal....hmmm...sounds a bit risky considering DirecWay's past record of not delivering new services on schedule, not living up to the speed promises they have made in the past and charging more than WildBlue has advertised (unless, of course, they drop prices to compete). Guess we'll have to wait till "mid-2005" to find out!

Rocky

For the latest prices on WildBlue service slated for late June delivery, go to: http://www.vsatus.com

Telesat Reveals Ambitious Roll out of Ka Band Service in Canada

2005-03-30T10:00:00.000-08:00

It looks like the folks in Canada will receive Ka band internet service before American's get it. Telesat announced this week they are rolling out service in April 2005 through Barrett Xplore, one of Canada's largest internet service providers. They provide service under the trade name Xplornet(formerly LincSat).
Details on the service packages and pricing for both residential and business customers will be made available over the coming weeks. If they are planning to have service available in April (two days from now) and making pricing available "in the coming weeks", when is it actually going to launch? It sounds like the sales department might have a touch of the "Alligator Mouth" syndrome. We'll see.... they say they are working hard to make it happen on schedule.
April 21, 2005 UPDATE: Well it appears Xplornet did get a bit ahead of themselves...now service is slated to begin in July 2005.

Satellite 2005 Convention in D.C.- InfoComm 2005

2005-03-29T16:28:00.000-08:00

Attendance at the convention was up some 20% over last year, over 450 exhibitors were on hand and 6,000+ visitors......maybe the industry is in for a decent year after all. (stats courtesy VPO online)

One of the attendee's of the convention told me today that a "sales representative" of WildBlue claimed their Ka band setup will have a 4 watt variable BUC (transmitter)......for $300-$500 equipment cost? ....I don't see how they can do that. Hopefully WildBlue will clear this up soon by being a bit more forthcoming about the details of what they WILL be providing to consumers when the product is launched this summer.

Meanwhile, the NRTC has finalized it's agenda for the InfoComm 2005 Convention in Las Vegas starting April 25, 2005. The most significant news coming from NRTC from my perspective is that the CEO of Wild Blue, Tom Moore(as well as the COO, Ken Carroll), will be on hand to update everyone on the testing and roll-out plans for Ka band internet. Additionally, and somewhat surprisingly, NRTC will also update it's members on the progress of what I consider their "Backup Bag", an update on Broadband over Power Line...a project they are pursuing with Cooperative Research Network and launching May 1st....just in case?
Hope they aren't betting too heavy on BPL....the American Radio Relay League has managed to shut down three BPL tests around the country so far and seem to be ready to fight BPL until a filtering solution is agreed to....More as we learn about it..... see updates on Ka Band here: http://www.vsatus.com

Wild Blue first to offer Ka Band Internet in U.S.

2005-03-06T12:48:00.000-08:00

Breaking News 2-28-2005:
"The only Ka game in town in the near future will be WildBlue who will begin service in June. Their Western Gateway is now operating and the other 4 are being installed. June should be a good date. Telesat has some capacity in the US but will not compete with their “customer” WildBlue." This quote came from a very reliable industry leader.There you have it. Any company offering Kaband service in the U.S. will have to come through Wild Blue it appears.
Wild Blue will offer 3 Ka Band internet plans: 512 kbps download speed - $49.95 per mo.; 1MB download speed - $69.95 per mo. and 1.5 MB download speed - $79.95 per mo. The upload speed has been stated by a WB official as ranging from 128 kbps to 256 kbps, but no word on whether that applies to all of the plans or not.

Ka Band News

2005-02-28T08:33:00.000-08:00

Ka Band VSAT* satellite internet technology has enormous possibilities for telecommuters, rural locations and eventually for Motor Home users around the U.S. - if it works! Ka Band satellite internet is an all new approach to sending and receiving internet traffic from space (satellites used for internet are at least 23,000 miles from Earth). *Very small aperture terminal.

The key improvements in Ka band technology from the “blanket” approach used up to now are:

Ka Band employs “spot beams” rather than broadcasting over an entire Continent….a far more efficient use of the available bandwidth resulting in lower monthly service cost to end users (as low as $49 per mo.).
Ka Band doesn’t require a very large dish (the dish is about the size of a trash can lid) to produce high speed internet in either direction (downloads & uploads are very fast), resulting in a lower equipment cost to consumers.
Ka Band uses technology that drastically lowers latency (the “lag” created by data traveling all the way to space and back) allowing users to successfully do things like Voice over IP, VPN and video conferencing.

When available, Ka band will enable remote teleworkers and consumer users to surf, work and email successfully at speeds approaching DSL & Cable for roughly $450-$650 for equipment and $49.00 to $95.00 per month for service. Users can expect download speeds at roughly 1500 kbps (kilobits per second) and upload speeds from 128-256 kbps, more than enough to handle most any work or leisure scenario. The cost is higher than DSL and Cable but when you can’t get anything but dial-up, the cost might well be worth it for the 20,000,000 or so folks out there with nothing but a phone (if that!). Another benefit of this technology is users will now be able to take advantage of Voice over IP (using the internet to make regular phone calls). Current satellite technology (Direcway and Starband) has too much inherent latency to allow successful VOIP, unless you are willing to say “over” like a walkie-talkie connection, after each sentence! I currently make unlimited calls Nationwide for a flat cost of $25.00 per month and nobody can tell the difference in voice quality. I can call Europe for about $.03 per minute or less! The savings are big, but for some rural homeowners it might be the only telephone service they are able to get.

The service will initially be offered by Wild Blue Communications, a Denver based company, owned by several major Media outfits. Two other companies, SES Americom and Echostar have indicated they will join in the fray by next year. Wild Blue is planning to start offering service sometime in the 2nd Quarter of 2005…….but I don’t expect it to be universally available until late in 2005. I will have monthly updates on the progress they are making at: http://www.vsatus.com/ . If you have been waiting for super fast internet service, your ship might have finally come in!