Artcle in Todays NY Times..There was also a chart comparing Cable, DSL, TI, Satellite...
November 30, 1998
Start-Ups Pin Hopes on an Internet Route Through the
Sky
By MATT RICHTEL
By the time an e-mail message reaches a resident of Grants, N.M., an isolated town 75 miles
west of Albuquerque, it has traveled where few Internet transmissions have gone before.
The town's primary Internet provider, Cibola Internet Services, is linked
to cyberspace by a satellite about 23,000 miles above the Earth. At
$1,700 a month, the service is not cheap, but the alternative was even
less appealing: Cibola's owner, Louis Uttaro, said he had waited six
months for the local phone company to install a high-speed line with a
monthly fee of $2,200.
Thousands of businesses, schools and Internet service providers in
remote areas have turned to satellite access to the Internet because land
lines are either unavailable or too expensive. Yet service by satellite is still
a small player in the Internet marketplace, and industry analysts are
skeptical that traditional satellite connections such as that provided to
Cibola will ever be affordable enough to play a large role in the overall
market.
Nonetheless, two California start-up companies say they have
engineered ways for more people to use the same satellite simultaneously
to gain access to the Internet and thus make the technology more
affordable and widespread.
The goal of these companies is to offer less expensive alternatives to a T1 line, the high-speed
connection that most Internet service providers and large corporations lease from local telephone
companies. A T1 line can handle 1.5 million bits, the smallest units of information handled by a
computer, a second.
One company, Tachyon Inc., based in San Diego, plans to begin testing its technology in Europe
within a month, offering high-speed access, equal in some cases to what is offered by a T1 line, for
$400 a month. The second company, Aloha Networks Inc. in San Francisco, plans to start a similar
service, called SkyDSL, within six months. Both systems cost several thousand dollars to install and
are aimed at businesses, not individual consumers, and at buyers primarily outside the United States.
"This works in Dubuque, in Mazatlan, in Dubai -- anywhere there is not good cable and good
service," John Koehler, president of Tachyon, said. "Our business is to provide communication links
from anywhere to the Internet."
The satellite companies do not plan to compete directly with dial-up access, digital subscriber lines,
cable modems or T1 lines, which can cost $350 to $3,000 a month, depending on how far the line
must be stretched.
"Land lines aren't going to go away," said Nicholas Negroponte, founder of the Massachusetts
Institute of Technology's Media Lab and a member of Tachyon's board. "If you want to move bits
from a specific point in Manhattan to a specific point in London, there is no better way than to
stretch a fiber line between them."
But he sees Tachyon's solution as having great potential in regions devoid of telephone and cable
lines. "I'm looking for ways that rural communities and developing nations can get Internet access
long before they can get wired or even wireless terrestrial structure," he said, "and this is the only
way of doing it for the next four or five years."
Analysts are skeptical, though, that the technology will
enjoy widespread success. Abhi Chaki, a senior analyst
with Jupiter Communications, a market research firm in
New York, projects that by 2003 at most 2 percent of
online households in the United States will use satellite
access to the Internet. And he says he does not think that
overseas markets will grow as much as the start-up
companies expect.
Chaki said customers would not be very likely to switch
from land lines even if the satellite technology improved, in
part because they would perceive it as unreliable. "If
technology alone were responsible for owning market
share, you'd see Apple and Betamax owning the markets,"
he said.
Even the proponents of satellite access acknowledge that the technology presents some serious
challenges.
The way satellite access works varies by company, but in general, when an Internet user requests a
connection to a Web page, the signal first travels through a land line to a satellite dish, typically on
the roof of the company or the service provider. The dish then transmits the signal at least 22,300
miles into space via radio waves to a geostationary satellite -- one that is always in the same position
in relation to the equator, so that the ground antenna never has to move.
The satellite sends the request back to Earth, where it is directed to the Internet. Once the
information is retrieved, it is sent by the same process back to the user. The whole process takes
only seconds.
But one drawback of satellite-based Internet access is that the data do not travel at the same speed
in both directions. Data sent from the satellite down to the user travel at speeds of 500 kilobits to 2
megabits a second, but the speed of information sent from the user up to the satellite is typically not
much greater than that delivered through a standard 56 kilobit-per-second modem.
Bigger satellites and more transmission power are required for a faster trip up, and most businesses
would find the cost prohibitive, industry analysts say.
The unequal speed coming and going, known as asynchronous bandwidth, may be fine for
individuals who typically send out, or "upload" to the network, only e-mail and Web page requests,
and it is common with some nonsatellite forms of Internet access. But it is a problem for
corporations that want to maintain Web pages.
A second sticking point with satellite access is that the distance the data must travel can cause
delays.
A third is that the geostationary satellites cost about $2 million a year to lease, yet can process only
a limited number of simultaneous data streams -- about 400 sources at a time, said Jim Omura,
president and chief executive of Aloha.
Omura said Aloha's technology could increase the per-satellite capacity to as many as 3,000
high-speed data streams, allowing overhead costs to be spread among eight times as many users.
He said the system would enable users to send out data at 64 kilobits a second, slightly faster than
by a 56-kilobit modem. But they could receive data at 500 kilobits a second, one-third the speed of
a T1 line. Omura said the company planned to charge $2,500 to install the system, plus monthly
fees ranging from $500 to $2,000.
Users in some countries in Latin America, Aloha's first target, now pay $2,000 a month for a
dedicated land line carrying 64 kilobits per second both ways, Omura said. "There is a growing gap
between the demand for Internet access and the ability of terrestrial networks to meet those
demands," he said.
Koehler, the Tachyon president, said his company had developed a way to fit 3,000 to 4,000 users
on a single satellite transponder. The system will cost $3,500 to set up, and the monthly fees will
depend on how much bandwidth the customer needs. He said the company planned to roll out the
service in the United States and Mexico on Jan. 2.
The satellite access market already includes several major players. One,
Hughes Network Systems, based in Maryland, offers a service called
DirecPC to about 85,000 individual and corporate users worldwide. Loral
Orion, a division of Loral Space & Communications, says it provides
satellite access to 60 Internet service providers, mostly in Europe.
Intelligent Communications, a Fremont, Calif., company, sells connection
by satellite to 60 customers, including remote schools and Internet service
providers. Cibola, the service in New Mexico run by Uttaro, is one of its
customers.
A week ago, Intelligent Communications announced that it had signed a deal to be acquired by
Softnet Systems, a small company based in Mountain View, Calif. Softnet will focus on delivering
high-speed access via satellite to small-town cable companies, which will then sell it to their
customers over cable modems.
All these companies use geostationary satellites.
An altogether different model is the much-publicized plan by Teledesic, a company owned in part
by Bill Gates, chairman of Microsoft Corp., to develop a satellite-based system it calls "Internet in
the sky." In a $9 billion undertaking, Teledesic plans to place 288 satellites into low orbit, about 850
miles above Earth.
Because Teledesic's satellites would be closer to the Earth's surface than geostationary satellites are,
the round-trip time of the data would be cut significantly. The catch is that users of Teledesic's
system will have to install antennae that can track satellites that move through the sky rather than
hang in one place. The satellites have not been built or deployed, and the service will not be
operational until at least 2003, the company says. |
