Another Hiccup on the Road to Broadband

For many homes and businesses, satellite is the only affordable broadband choice. Cable TV doesn't go to every house, much less cable Internet. Additionally, some cable companies, such as AT&T, don't offer Internet connectivity to businesses. Why, I'll never understand, but they don't. DSL has an inherent limitation that precludes anyone further than a mile or two from the phone company's central office (CO). With satellite, all you need is a clear view of the southern sky, something that most people can arrange even if they don't have it. However, other technical hurdles have crippled satellite's adoption as an Internet connectivity solution.

Now, companies and investors are folding up their tents and pulling out. Most notably, Bill Gates, Boeing, and Motorola, who were invested heavily in low orbit satellite company Teledesic, have jumped ship. This follows a botched attempted by Iridium to provide satellite phone and low speed data services. Meanwhile, Hughes (DIRECTTV and DIRECTPC) is trying to cash in its chips, selling out to EchoStar (Dish). They are battling the FCC, whose concern is that EchoStar would become a monopoly in the remnants of the satellite market.

So, what's wrong with satellite? Well, high orbit systems, such as those used by DIRECTPC and and Dish, are so far away that it takes a second or two just to bounce a signal off the high flying machines. This kind of lag is OK for one way communication such as TV. However, if you have to wait an additional two seconds every time you click a link or check your mail, you may think twice about using satellite for your Internet needs.

Like many good ideas, Iridium may have been a bit premature in its attempt due to technological limitations. In other words, they seemed to have the right idea but a few years to soon. Their satellites didn't move enough data to make them terribly useful for Internet related tasks. Their phones were too bulky to become a replacement for the latest cell phones. If Iridium were to try it again today, using advancements made in just the past couple years, they'd probably have better luck. Of course, hindsight is always 20/20.

And then there was Teledesic. Backed by Mr. Gates himself, how could it go wrong? Well, like most tech projects, which have a failure rate somewhere around 75%, it was a better idea on paper than in reality. They bit off a bit more than they could chew. Of equal import, it seems like they never really did anything. No matter how much you plan or talk about doing something, you eventually have to sit down and do it.

Though I can't really comment on what Teledesic actually accomplished behind closed doors, as far as I can tell, in 12 years, they only ever built two satellites, or rather, they had two satellites built for them. Their Web site resembles a hollow FrontPage template, absent the dreaded "under construction" sign on their barren "Technology" page.

If Teledesic, backed by some of the most powerful and wealthy people and companies in the world, couldn't make it, who can? It took 3 years for the FCC to grant Teledesic a license. It took Teledesic 12 years to build two satellites. With that kind of turnaround, it will be be years before we see another attempt at viable satellite Internet product -- if ever. Sure, we'll still have a few high orbit offerings like Dish, but their inherent limitations will relegate them to a niche market.

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