3/20/99 - IP in the Sky -- Internet Service Providers Look To Satellites To Supply The Missing Link
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Mar. 19, 1999 (LTH - CMP via COMTEX) -- Internet service providers (ISPs) short on fiber have another way to satisfy their customers' appetites for bandwidth: satellite. By 2005, the market for all satellite-based communication services, including multimedia and Internet access directed at carriers, businesses and consumers, could be close to $80 billion, according to Marco Caceres, senior space analyst at the Teal Group Corp., (Fairfax, Va.). Service providers are increasingly looking to satellites for supplemental capacity in two areas. First, in order to deliver services to business customers in locations with little or no fiber infrastructure, many international carriers buy Internet capacity from resellers of bandwidth, which is provided by satellite behemoths such as International Telecommunications Satellite Organization (Intelsat, Washington, D.C.). Telstra Corp. Ltd. (Sydney, Australia) is an example of this. Second, service providers see satellites as the most cost-effective medium to deliver some multimedia applications, such as broadcast video, that business customers are starting to demand.
For now, satellite Internet service is still used mainly by carriers that resell it to other ISPs, but the service may trickle down to business customers by year's end, according to satellite providers. Satellite capacity will increasingly be used by international providers looking for a way to deliver local content, says John Stevenson, technical manager of Internet communications and engineering systems at Intelsat.
In the future, ISPs could use satellites to provide their business customers with broadcasting applications such as delivering a chief executive officer's speech to a company's branch offices. Toward that end, Loral Orion Inc. (Rockville, Md.), a subsidiary of Loral Space & Communications Ltd. (New York), plans to offer a multicast news feed-over-satellite service at 2 Mbit/s, starting in mid-1999. Loral's executive director of Internet products, Carl Wu, says ISPs can buy its ability to deliver video and multimedia data to their points of presence (POPs) and then resell it to their own business customers.
But because of the higher cost of using satellite links, an ISP's decision to buy satellite service makes economic sense only for customers based in areas that have little or no fiber infrastructure. MCI WorldCom Inc. vice chairman John Sidgmore recently said his company, which includes business-to-business ISP UUNet Technologies Inc. (Fairfax, Va.), will probably use satellite services to deliver high-bandwidth Internet content to less-populated nonmetropolitan areas. He believes that customers within metropolitan areas are already well served by terrestrial fiber links and therefore won't need to be serviced by satellite. But just because a region has an urban population density doesn't necessarily make it a bad candidate for satellite service.
"In many countries, well-developed terrestrial links don't exist, and the transit charges are exorbitant," says John Stevenson, Intelsat's technical manager of Internet communications and engineering systems. With its system of geostationary (GEO) satellites, which provide speeds of up to 45 Mbit/s, Intelsat has been offering high-speed Internet protocol (IP)-over-satellite service links to ISPs since September.
"In southern Asia, Latin America, Africa and central Europe, satellite is the way to go," says Bob Collet, vice president for data services at Teleglobe International Inc. (Montreal). In most cases, satellite is used to complement fiber or overlay fiber, he says.
The amount of preexisting fiber, however, is not the only factor that ISPs need to consider. John Mattingly, president of satellite services at Comsat Corp. (Bethesda, Md.), which also resells Intelsat capacity, says satellite's asymmetric delivery makes sense for ISPs that need only a small amount of capacity for uploading requests to Internet sites and a large amount of capacity for downloading information like graphics-heavy data. Comsat's asymmetric speeds for Internet access range from about 2 Mbit/s inbound and 8 Mbit/s outbound up to 8 Mbit/s inbound and 34 Mbit/s outbound, says Susan Miller, vice president of engineering and operations. But ISPs looking at satellite to help serve international business customers using IP, frame relay and asynchronous transfer mode (ATM ) need to determine if satellite's asymmetric delivery works well with their traffic patterns.
For Teleglobe, another technical challenge of sending IP traffic over satellite has been the need to improve efficiency by buying new routers with sufficient memory to hold enough content and fill more of the pipe, Collet says. Teleglobe has not invested heavily in the technology needed to send frame relay over satellite, but the company plans to offer satellite delivery of ATM in the future. Comsat currently offers IP, frame and ATM over satellite.
ISPs must also evaluate the geographical and regulatory barriers to using satellite services, including the ability to put up an antenna. In Europe, which is rather deregulated, it's relatively easy for an ISP to site an antenna and offer service; in Latin America, where governments still control much of the telecom industry, regulations can make this very expensive, says Wu.
When such barriers pose little or no problem, however, small ISPs can use satellite to expand their consumer bases in areas where there's a huge unmet demand for Internet services. Network Computer Systems Ltd. (Accra, Ghana), one of Intelsat's first IP customers, started out small and has been growing slowly and steadily.
Caching most commonly accessed content in one location, then using point-to-multipoint technology to distribute that information, is an economic alternative to getting content from a server that sits thousands of miles away. While service providers in foreign countries mostly offer basic services like e-mail to their customers, more ISPs, such as Network Computer, also use satellite capacity to receive and transmit locally hosted content. Without using satellite, such ISPs would be forced to access U.S.-centric content via a fiber optic cable because they couldn't afford to access local content by building out fiber links to their own POPs. And by letting these service providers distribute local content over the Internet, satellite also helps them foster the development of that content-one more service that ISPs on a low-fiber diet can now offer their customers.
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