Satellite’s Golden Egg

A golden goose is waltzing around the heads of the satellite industry and its about to lay a golden egg, a Ka-band egg that will be ultimately worth billions of dollars.

It’s no pipe dream.

Neither is it a dream that will become a reality overnight. It’s going to take months and years for satellite broadband to capture the 15-30 percent market share that is being projected.

So what do we do while we await this windfall.

Two things come to mind. And by doing one, we do the other.

The first is to learn as much as we can about providing services directly to the commercial and consumer mass markets. (The telephone and cable companies obviously have a huge head start, but they also carry a lot of heavy baggage.)

The second is to use current satellite technology and broadcast bandwidth right now to offer on a smaller scale the kind of value-added services we’ll be offering when the first generation Ka-band satellites are finally deployed, especially into the commercial market, which will be the early adopter.

A firm foundation

Satellite starts off on a very firm foundation.

VSATs have performed well in the commercial communications niches it occupies. They have a track record.

Satellites are used to deliver signals to terrestrial television transmitters, studios, cable head ends, and from news and sporting events back to collection or editing points. They’ve proven they’re reliable.

Broadcasters are using satellites to deliver entertainment across vast geographical areas (and have done so for many years). In fact, one could argue that satellite broadcasting has become ubiquitous. So it’s not afraid of a little competition, and can effectively penetrate and service a basic mass market.

The digital advantage

Satellite broadcasters were among the first to embrace digitization when the large potential cost savings offered by compression became apparent. Those versed in satellite broadcasting know how to get ahead of the technology curve.

And now the Internet, coupled with IP, DVB and other open global standards, has made it even easier to compress content, and to offer cost-effective solutions for the delivery of data by satellite.

In fact, with the low cost, high volume chip sets developed for the mass market, communication at high speed over Kuband satellites, at an acceptable price point, is already possible. Now what is needed is for broadcasters, ISPs or others with vision to step forward and offer audio, video and data services via satellite to a customer base that is more than willing and able to pay for them.

Getting up and running is surprisingly easy. With an existing digital uplink and a minimum of extra hardware simply take the data from a data transmission source and format it into an ASI data stream. This can then be injected into a video multiplexer and transmitted over satellite. If the multiplexer is a statistical multiplexer, a few Mbps can easily be opened up for the data services. Where the uplink has an older mux without statistical multiplexing, the bandwidth of several video channels can be reduced slightly to free up the bandwidth for the data, without impacting video quality.

All that is required for data reception is an appropriate antenna with LNBF, a run of cable and an indoor unit (IDU), which would typically consist of a satellite receiver with an Ethernet or USB interface for connecting to a PC or network, or a receiver card that is mounted inside the receiving computer. If interactive (full two-way communications) services are contemplated, a satellite interactive terminal (SIT) with appropriate transmitters and modems would be required, but that’s another money-making idea for another time.

Data can also be delivered into the Internet backbone for reception via a standard Internet connection.

Services that can easily be offered

Having squeezed out the available Mbps, the next question is, what are they good for?

While most proposed broadband services are expected to be interactive, one-way broadcast-multicast offers some potentially profitable opportunities, such as the following.

Audio distribution: Every month production companies produce background music and other content for corporate customers to play back at hundreds of stores and businesses. Currently, the content is pressed on CDs and distributed via Federal Express, or it is transmitted via the Internet or other channels. Transmission via IP over MPEG2-DVB can reduce costs for the end user and/or increase quality.

Live streaming of audio content (web events): By using a satellite uplink with multicast to multiple points on the Internet backbone, or to a data reception terminal as described above, live audio content can be distributed, avoiding net congestion and reducing costs for the promoter.

Streaming video: Live video events such as stockholder meetings, corporate briefings, conference calls, etc. are already being carried over MPEG2. However, the infrastructure costs are too high for most corporations. A less costly approach is to send the video feed via the Internet directly to an uplink site and then broadcast (MPEG1 or 2 video over IP over MPEG2 transport stream) for direct reception at viewer sites.

And then there are the less glamorous possibilities:

Multicast data: Satellites still cannot be beaten for applications where large amounts of data must be sent to large numbers of remote sites. A good example is the distribution of inventory and pricing databases to point of sale computers. A single file of data can be broadcast to all computers in the network. If there are regional differences in pricing or product lists, the data can be directed to a group of specific computers or terminals. In a network, a terminal — which can include anything from point of sale cash registers to handheld scanners to portable or fixed MP3 players to PCs – can be a member of multiple multicast groups as well as having an individual address. Thus the MPEG2-DVB infrastructure can be utilized to broadcast new pricing information to all stores, while uploading a new operating system to a backup computing facility in the Midwest.

Webcasting: In many regions of the world, access to the main Internet backbone based in the United States is poor. By setting up a webcasting system where popular content is broadcast and stored on local caches, users in distant regions can be given faster response time to popular content (since their request will be in the local cache vs. going through a slow connection to the backbone).

Potential customers

Who is going to buy all these wonderful services?

In many organizations the MIS department is also responsible for the telecommunications facilities used in the corporation. Unless their business is telecommunications, most MIS departments are woefully understaffed, and have a great deal of difficulty finding fully qualified staff. In most cases, they don’t go looking for solutions that will add to their workload, and they usually don’t replace what is already working unless there is a compelling case to do so.

So a simple phone call won’t cut it.

The key is to present a full solution, and to bring the necessary partners who can install and service the technology. Then hammer home your story of cutting edge-technology coupled with cost-savings. A simple comparison of the cost of various types of telecom facilities to service a variable number of remote locations is quite compelling. The diagram shows a rough comparison of network cost for frame relay, ADSL Internet, ISDN dial up Internet and satellite transponders.

It is clear that with satellite, the recurring costs of the communications facilities (the satellite) are fixed — no matter how many remote terminals are receiving the signals. Telecommunications costs are being reduced all the time, as is access costs for Internet. However, with satellite, not only can costs be lower, but the throughputs achieved can be higher since Internet congestion will not be a factor.

What’s this bandwidth worth?

If the satellite industry is to thrive as a broadband provider, gain that 15-30 percent of the billions that will be spent, it needs to learn as much as possible about providing services directly to the commercial and consumer mass markets. Pricing is an element of that lesson.

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