Subject: Broadband and (speed of) Light:Alcatel-Loral
Date: Fri, Mar 20, 1998 18:19 EST
From: Readware
Message-id: <1998032023192600.SAA23202@ladder03.news.aol.com>
For those interested in satcom broadband technologies, the problems, the resolutions, and investment standpoint:
As is well enough known, the commercial application of satcom technologies for broadband, for the promise of "Gigabit in the Sky", derives from NASA's ACTS and the US MILSTAR efforts of the late 1980s. ACTS' spotbeam efficiencies-- breaking up large broadcast cells into smaller honeycombed ones-- provided for the Ka band breakthrough that in the early 1980s was considered improbable. With the high frequencies (28GHz uplink, 18 downlink) of Ka Band
comes a decreased power need, and reduced antenna costs. Recent advances now enable subdivision of frequencies among these cells and their re-use in non-adjacent cells. To this advance was Ronald Maehl of Loral's Cyberstar referring in his recent comments at a New York satellite conference on "frequency re-use" as a cost per byte economizer. Spotbeam frequency re-use makes symmetric links commercially feasible. MILSTAR, of course, has now
opened up new broadband initiatives for V-Band and water band. Already Huges StarLynx and SpaceCast, Loral Cyberpath, Motorola M-Star among others have filed for V-Band access to the FCC.
The question now, as satcom telephony seems to be a resolved issue among original sceptics, is whether satcom technologies are viable for broadband in the presence of fiber? The constellations proposed by Lockheed, Motorola-Marconi, Hughes, and Teledsic will require an aggregate bandwidth of some 3 terabits/second-- the ground equivalent of 2 million T1 lines. Satellite powers, indeed, are moving with dispatch in their plans for broadband
provisions. Some estimates put their broadband services at 10% of the 2005 market, with 400 broadband satellites in orbit, and 1300 satellites to have Ka Band delivery alone by that year. Such robust numbers need to be viewed carefully. Still, satcoms, the advocates say, will move "beyond the trunks". This is the meaning of their role as "providing the last mile". Bandwidth on demand will be a commercial reality, that is, in areas where fiber is
commercially prohibitive. Stauncher advocates see satcom broadband services closer to home. Both Teledesic and Celestri argue for "speed of light" preference in markets just outside the urban areas in the US and Europe. To Celestri that is a market commanding $70 billion in revenues a decade from now. Skybridge has mentioned $34 billion by 2004, 05.
Investors, however, want to know what system architecture will win out? And when? A brief survey of the 1988 difficulties and advantages of GEOs and LEOs are probably, then, in order. And given the "disadvantages" what is being done to mitigate or eliminate them, And, more importantly, who is doing it?
Lockheed Martin's Astrolink is a GEO system exclusively. GEOs tend to be bandwidth constricted because of their altitude, and latency laden. Because TCP packets cannot travel faster than the speed of light, they experience a "delay" effect. GEO roundtrip latency can approximate almost a half-second delay-- about 10 times the latency of a typical Los Angeles to New York fiber hop. LEOs, the advocates of GEOs will respond, experience "jitters"
(variations in transmission delay and packet re-ordering), making them not invulnerable at all to the latency charge. While large memory buffers in earth stations can "equilibrate" this latency (make the delay constant, thus minimize its effect), the "buffer" technology does not serve email traffic. Buffers require large packets of bytes, while email is small. Inclined LEO orbital patterns, being pursued by Celestri and Skybridge,
greatly offset the "jitters" problem-- but at the cost of nonpolar coverage. Additionally, a large constellation of LEOs is required to minimize these "jitters"-- 48 will not do. GEOs will provide coverage, on the other hand, at both poles. LEO "jitters" are especially acute, the GEO advocates argue, if in internet packeting TCP cannot distinguish latency from a normal delay transmission. That is an issue yet to be resolved technologically, and will
have to be revisited as satcom providers come closer to actual broadband servicing.
LEOs with satellite to satellite links have the tricky problem, GEO advocates hold, of absolutely precise beaming, a problem not as coarse for GEOs. And LEOs, because of their satellite to satellite handoff, are not as ATM-ready as GEOs are. The advantages to LEOs, though, is that effective hand-offs provide for greater speed than the cumbersome footprint controls hounding a GEO. LEOs, i.e., are more nimble in delivery because of the relative
smallness of their footprint. The GEO advocates response is their's is a simpler topology, with far less routing complexity than required for 64 LEOs.
It is the problem of latency though that the GEO versus LEO advocates press. For this reason a hybrid system-- a combination of GEOs and LEOs-- has been offered. GEOs are sufficient to answer non-latency sensitive bandwidth demands-- such as broadcast and IP multicasting (a one-to-many delivery of data, which conserves dramatically on bandwidth). While "spoofing" (acknowledging a TCP transmission prior to actual reception) is being developed along
finer lines for GEOs, there does not appear to be sufficient advance yet in the technology. LEOs then, it is believed, are more sufficient to videoconferencing and telephony/voice. They "mimick" fiber more closely.
There are two systems being developed, then, with the "compromise" of Low Earth Orbiting satellites and Geostationary. They are those of Motorola Marconi Celestri and Alcatel-Loral Skybridge. While Loral has only a GEO broadband system envisioned within Loral named Cyberstar, Skybridge is a Ku-band 64 LEO, 4 (tentative) GEO system that will use a bent pipe architecture throughout the fleet for broadband
delivery worldwide by 2002. Unlike Celestri, which will stay with the satellite interlink of its Iridium effort, Skybridge follows the Loral model of keeping as much technology on the ground as the system allows. This is a risk reducing strategy, and economizes on cost so as to appeal to a broader market. Celestri's interlink strategy, we do not believe, provides the same economic advantages. The Skybridge
Ku band is a distinct advantage for rain fade issues, even as microwave developments continue to reduce that even more. As conceived now, Skybridge must resolve the 20 millisecond delay its constellation will incur by its requirements to avoid GEO interference. We think that the above described memory "buffers" provide a long solution for that.
Loral's management has frequently spoken of Loral's intention of providing seamless services worldwide for information-intensive systems. A Loral-Alcatel collaboration in Skybridge could therefore provide non-fiber accessible areas of the globe with telephony through Globalstar, broadcast and IP multicasting through Cyberstar and Europe*Star, internet/videoconferencing on demand through
Skybridge, and Ku/Ka band (8 Ka transponders proposed) access through Orion. V-band protocols will need to be addressed once their usage becomes plainer. (Hughes, so far, has been the most vocal about V band).
As the technological issues of "latency", "jitters", and "spoofing" become increasingly resolved, the investor in satcom technologies sees an area of investment-- the broadband synergies of Alcatel-Loral-- as a seamless system of information delivery. While the various tehnological issues are debated throughout the industry, as technological advantages are seen in increasing industry consolidation-- which we expect to accelerate-- the
narrowband issue of telephony seems to moving towards its goal of providing global telephony access.The broadband market-- that same model of converting cold-war technologies to commercial use (with the military always at a one-leap advantage, of course)-- begins to emerge as an investable one. We think that the current satcom telephony market may provide the clue, the model, for investors as to the likelihood of success for satcom providers in
broadband.
More than commercial resolution of the larger satcom technological issues of broadband will be required for investor interest. Successful pricing (the beginning of return on equity) needs to be established. The T1 model is the one satcom providers face in the corporate market. In high density areas, the economics of fiber make T1 superior in every sense to satcom. It is in areas outside of urban traffic where pricing models for satcom providers
begin to take shape. Satcom providers must identify markets where time usage of the service has a billing advanatge over continual service billing. Also, satcom providers will want to software in their pricing automatically to the end user so as to conserve on personnel costs.
Increased beam efficiencies-- "frequency re-use"-- as a manifold cost reducer of internet bytes-- is, however, the principal for "return on equity" that will attract investor attention. Those efficiencies, linked to technological advances in the issues we mentioned above, are what satcom investors need to address as Skybridge and Celestri make their debut in late 1998, early 1999 for investor monies from the capital markets.
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