LEO projects promise rural, remote broadband in just a few years

Three years after a number of big companies first announced they would launch global low-earth-orbit (LEO) systems that would provide internet connectivity to remote areas around the world, that space is getting crowded — including with some Canadian competition. If their plans work out, the state of rural and remote broadband in Canada could see a seismic change within five years. “They’ll get connectivity that is like fibre connectivity in the south in every remote community, along most of the major highways, in rural areas,” Michele Beck, vice-president of North American sales for Ottawa-based Telesat Holdings Inc., said in a phone interview. More than a half-dozen companies worldwide, Telesat among them, plan to launch low-earth orbit systems in the coming years. That includes Elon Musk’s Space Exploration Technologies Corp., or SpaceX, OneWeb, SES S.A.’s O3b mPower and LeoSat Enterprises, and another Canadian company with LEO plans of its own, Kepler Communications Inc. Traditional geostationary satellites that currently provide remote areas with connectivity are placed higher up in orbit, around 50,000 kilometres away, and essentially stay put because they rotate with the earth. In contrast, low-earth orbit systems use many satellites that are placed lower down, where they are constantly circling the globe. One benefit these systems will have over the satellite service that’s currently available is lower latency, allowing applications like gaming and video chatting. While some experts were skeptical about these projects when the early entrants first announced their plans in 2015, the idea got some support from the Canadian government in this year’s budget. The document allocated $100 million over five years to the Strategic Innovation Fund, “with a particular focus on supporting projects that relate to LEO satellites and next generation rural broadband.” “I think rural Canada is going to do well,” Larry Press, a professor at California State University, Dominguez Hills, said in a phone interview. He pointed out that in the United States, the Federal Communications Commission (FCC) requires providers to commit to serving the whole country. That means a company like OneWeb will be serving Alaska and the contiguous U.S. “Those same satellites, they’ll be flying over rural Canada, and there will be nothing else to do but serve people in rural Canada. So the pricing could be quite good for people in those rural areas,” he said. But those foreign satellite systems must follow rules imposed by Innovation Canada, which wrapped up a consultation on how to licence low-earth orbit systems in June 2017. To get ISED approval to operate in Canada, the rules stipulate that those foreign satellite service providers must coordinate with Canadian networks and must have the capacity to deploy services to Canadians, though a specific amount of coverage wasn’t set by the department. While multiple companies are working on launching their own LEO systems, they have different goals. “Every LEO system has its set purpose, so that’s what largely distinguishes many different players,” Mina Mitry, Kepler’s co-founder and CEO, said in a phone interview. Kepler, which said in a June press release it plans to launch up to 140 satellites that will provide service by 2022, has a long-term goal to provide internet connectivity in space. In the shorter term, it will use its satellites to provide connectivity on earth, with a focus on the Internet of Things (IoT). That’s in comparison to companies like OneWeb and SpaceX, which are looking to provide broadband services like consumer home internet, he said. “We’re building up a network like any wireless carrier would build up a network and in the interim we’re using this network to service applications that have a use case today,” Mitry said. Erwin Hudson, vice-president of Telesat LEO, agreed in a phone interview that there is differentiation between the different companies’ plans. “These systems are in different frequency bands, they have different architectures, and for the most part they’re focused on different markets,” he said. Telesat, for instance, is initially looking at serving governments and the enterprise market, though it’s designing its system to be flexible enough to serve consumers as well. His colleague Beck added the company will also be offering “trunk links and backhaul to telecommunications and wireless companies who will then be able to connect consumers directly, either via an LTE or 5G network.” It aims to have global service from its 120-satellite constellation in place by 2022. Erwin predicted there’s enough of a market to support three LEO systems, even if they compete in some areas. “I think that with the different market focuses it’s possible for multiple systems to be successful,” he said. Both Beck and Erwin were confident in Telesat’s ability to compete with the other companies working on similar projects, with Erwin pointing out it’s been in business for 50 years and is one of the five largest satellite operators in the world. “We’ve got the skill set, the capabilities, the knowledge, the experience, to compete on a global level, and to compete with the likes of Elon Musk,” Beck said. SpaceX’s ambitious Starlink project, which includes deployment of 4,425 satellites, received approval from the FCC in March, which specified that half of those have to be up by 2024 and the rest by 2027. OneWeb says on its website it aims to “start providing low latency broadband access as early as 2019 and fulfill its goal of “bridging the digital divide” by 2027. Its project involves an “initial production” of 900 satellites. O3b says on its website it plans to launch its mPower constellation, which includes “ seven super-powered Medium Earth Orbit (MEO) satellites,” in 2021. LeoSat, which is aiming at the “business-to-business” market, plans to start launching its constellation in 2019, which, according to its website, will use both LEO technology and high-throughput satellites. Roger Rusch, a satellite industry consultant, pointed out in a phone interview that satellite deployments tend to take significantly longer than forecast. That’s the case both with traditional geostationary systems and the first-generation of LEO satellites, when projects from companies such as Global Star Inc. and Iridum Communications Inc., which ultimately led them into bankruptcy, were delayed by a number of years. “I would think we are probably several years away, for sure,” he noted, adding that it’s not just about getting satellites in place, but that “it also takes time to work out the bugs in software.” Beck said one way the government can support these deployments is by being understanding when delays occur. “Recognizing that this is a big project, it’s a difficult project, it may not happen exactly on time. We’re looking for their support, and if things slip out then we would hope that they would support us and back us on that and give us the required time on the regulatory side,” she said. Indeed, Telesat already had one setback late last year, when it lost its first LEO satellite after a Russian rocket launch went awry. It also pushed back its target from offering service in 2021 to 2022. Rusch was skeptical about how profitable these systems will be, especially given the expense of getting them set up, and whether the companies will be able to manufacture the satellites as cheaply as they expect. But Press noted that once they are up in the air, the cost of adding new users is extremely low. “If they’re going to put up these , it’s obviously a really huge investment, but then once they’re up there, it’s a fixed cost…the marginal cost is zero of adding a new user in an unserved place,” he said. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

LEO projects promise rural, remote broadband in just a few years

News | July 27, 2018

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