Satcom Stimulus
Good idea, rocket scientists. Get together and propose a joint solution for broadband stimulus’s $7.2 billion:
Hughes Network Systems (News – Alert) says it has a "shovel ready" way to wring lots of value out of broadband stimulus spending. Though nothing is formalized yet, it is likely Hughes Network Systems and WildBlue Communications will submit a joint proposal to the National Telecommunications and Information Administration for grants to underwrite the cost of end user customer premises equipment (which could include satellite terminals, receivers and installation).
Doing so would provide "an order of magnitude greater deployment if just the CPE is subsidized," says Mike Cook, Hughes Network Systems SVP. "That’s very realistic; we can move now." As HughesNet now has 400,000 or so customers, an order of magnitude potentially would represent four million new broadband subscribers.
By way of comparison, a recent wired broadband build cost $5,000 to pass a rural home. If you assume penetration is 60 percent (six out of 10 homes buy broadband), the cost per activated home is $8333. All of the CPE and installation and activation cost should not come to more than several hundred dollars per activated home.
"Our recommendation is that stimulus funds should be used to subsidize CPE," says Cook." What we want is for subscribers to get systems with no upfront capital outlay and just pay for their service plans."
Currently-available plans range from 1 Mbps downstream up to 5 Mbps downstream.
Given that HughesNet now is available in virtually every zip code, it doesn’t need to build infrastructure, or spend much time on demand stimulation. "Awareness is the limitation, not even so much demand," says Cook. "Frankly, we will have all the incentive we need to dramatically spend more marketing dollars if CPE subsidies are approved, because we get a good yield."
Going forward, as it builds and launches a new next-generation satellite, Hughes plans to offer faster speeds. One way of comparing potential end user bandwidth is to compare the current SpaceWay satellite service with the new satellite.
"SpaceWay delivers data today at 440 Megabits per second," says Cook. That data of course is a shared resource between some number of users, he says. As a financial matter, it is uneconomic to offer end-user speeds faster than 5 Mbps downstream, he says.
But future satellites have much-bigger capacity, allowing HughesNet to "probably can get into 20 to 30 Mbps on download speeds," says Cook, who says the advancements come from a variety of advances, including the additional spectrum, use of multiple spot beam, advanced coding techniques and higher-power transponders.
"If SpaceWay is a 10 Gbps platform, the new satellite will offer 70 to 100 Gbps," says Cook. "We are approaching an order of magnitude increase of capacity," he says.
Hmm. Gilat’s Spacenet is missing. What gives?
