The Net space race

Before the lightning growth of the Internet economy and before Yahoo went ballistic, a race was started. The race was to build a broadband Internet in the sky.

Now the tech-wreck is upon us, now the Internet has changed how we do nearly everything, and that race is still going.

The promise is simple: broadband connectivity wherever you need it. The benefits are clear: while today's Internet is predominantly an office workers' intelligence tool, wireless broadband Internet, accessible anywhere, will allow communications to achieve more.

Some examples are obvious. Mobile telemedicine could make possible the evolution of global super specialists. The time and cost of mining could be reduced as scientists get instant results on tests at mine sites. Surveying teams could connect directly to central databanks where live survey data analyses readings as they are taken.

The ideas are only limited by imagination - oh, and, of course, cost. And cost has been the biggest issue of them all.

The need to provide high bandwidth, coupled with the spectrum available to service providers, has resulted in companies that want to launch broadband satellite services choosing low earth orbiting (LEO) satellites. LEO satellites cannot cover the same footprint as satellites at higher orbits - consequently, to achieve full coverage it's necessary to launch more satellites. And satellites are not cheap to launch.

Two competing systems likely to come into existence - SkyBridge and ICO-Teledesic - plan to launch 80 and 288 satellites, respectively. Costs for just getting these satellite systems off the ground run into the multiple billions of dollars.

This financial barrier is combined with the need to work across political and corporate barriers, where countless agreements must be made with governments and market-dominating telecommunications companies. So far, the successes have not been overwhelming.

A report dated 14 March on the SpaceDaily Web site (www.spacedaily.com) quoted Craig McCaw, ICO-Teledesic Global's chairman, who said, "The mobile satellite industry has failed spectacularly in delivering on its promise to users. Creative changes in both the customer proposition and service-delivery philosophy are clearly necessary to deliver on the potential."

Teledesic is probably the best known of the two systems because of the company's high-profile backers. McCaw, chairman and investor in Teledesic, ran his own cellular communications company before selling it to AT&T. McCaw and Microsoft's Bill Gates were founders of Teledesic in 1990.

McCaw helped London-based ICO Global Communications out of Chapter 11 bankruptcy in May 2000, which saw ICO Global relaunched as New ICO. ICO Global Communications had been preparing to launch about a dozen medium earth orbit (MEO) satellites in the third quarter of 2000, to be connected via a global ground telecommunications network for voice and low-speed data services. New ICO and Teledesic now both come under the control of holding company ICO-Teledesic Global. A merger of the group is on the table.

SkyBridge, though less talked about, is undoubtedly a qualified competitor. This partnership, led by Alcatel, includes Loral Space & Communication, EMS Technologies, COM DEV, Mitsubishi Electric, Sharp, Toshiba, SRIW, CNES, SNECMA and THOMSON multimedia.

The SkyBridge system works by passing the communications stream to a land-based gateway without processing it. These gateways - around 200 in total - will be connected to ground-based networks. While the building of these networks is a highly technical and expensive undertaking, the real problem is whether or not they will be viable commercially.

For voice-oriented satellite providers, it has definitely not been smooth sailing. In January this year Globalstar Telecommunications suspended all debt repayments and in 1999 Iridium filed for bankruptcy. Nevertheless, these systems are both running and have customers, with Iridium picking up a two-year US Department of Defense contract worth $US72 million late last year.

And although there are clear differences between broadband and voice satellite offerings, it's unclear whether the difficulty in finding customers for voice-oriented satellite networks will also plague providers of broadband data over satellite.

These projects are some of the most significant communications developments we are likely to see in the next few years. They have the potential to change the way we do business, and how services are delivered to remote areas. If we can afford them.

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Ben Gerholt

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