Buy this satellite?
by Jeff Foust
|Buy This Satellite wants to raise money to buy TerreStar-1 in the bankruptcy proceedings and move the satellite to another geosynchronous orbital slot.|
The idea of satellite-based Internet access isn’t new, but has largely remained a niche business, serving rural and other isolated populations that aren’t reached by cable or DSL systems. Satellite-based systems have gained a reputation of being more expensive than terrestrial alternatives while offering less bandwidth. Still, ventures have poured hundreds of millions of dollars into new satellites, in some cases hoping to tie them with terrestrial networks to create hybrids that offer the best of both.
That investment has provided an opportunity in the eyes of one group. “Buy This Satellite” was rolled out last fall by a group of people as a spinoff of AHumanRight.org, an initiative to provide Internet access to underserved regions of the world. “We believe that Internet access is a tool that allows people to help themselves - a tool so vital that it should be considered a universal human right,” they state on the project’s web site. And they’re looking to provide that access by, as the name suggests, buying a satellite.
The satellite they’re interested in is TerreStar-1. Launched in 2009, the Space Systems/Loral-buit satellite was billed as the largest commercial communications satellite ever built, tipping the scales at over 6,900 kilograms. Located in geosynchronous orbit at 111 degrees west longitude, the satellite serves North America at S-band frequencies, using an 18-meter deployable antenna. That satellite allows it to provide voice and data services to phone handsets that look no different than normal cell phones; the satellite service is used when outside the coverage of terrestrial networks.
Unfortunately for the satellite’s owner, TerreStar Networks, their business didn’t develop as well as they planned. In October the company filed for Chapter 11 bankruptcy protection, continuing operations as it sought to restructure the company. Its largest creditor, EchoStar, provided the company with $75 million to allow the company to keep functioning as the restructuring process played out in bankruptcy court.
One company’s financial trouble is another group’s opportunity. Buy This Satellite wants to raise money to buy TerreStar-1 in the bankruptcy proceedings and move the satellite to another geosynchronous orbital slot. The group has gone so far as to identify a potential orbital slot registered by Papua New Guinea—a country with a very low Internet penetration rate—but currently unused. The group is looking to raise $150,000 in its initial phase to fund legal work, development of a business plan, and further technical details.
|There’s also the issue of taking on the cost and complications of operating a satellite when a number of other companies are already providing satellite-based Internet service, with more on the way.|
Many in the satellite industry, though, have seen this effort as a quixotic one, at best. To begin with, it’s not clear that the satellite alone is actually for sale. TerreStar is going through Chapter 11 bankruptcy, seeking to restructure the company, as opposed to Chapter 7, where a company’s assets are liquidated. A likely outcome is that the company would be restructured under new ownership or acquired by another company. Last week EchoStar announced it was acquiring a similar satellite operator, DBSD North America (formerly ICO North America), also in Chapter 11, for $1 billion. Industry observers speculate that EchoStar is interested in both DBSD North America and TerreStar for their spectrum to provide a mobile broadband service or similar applications.
Even if Buy This Satellite could raise the money to buy the satellite—as of early Monday the project had raised just over $37,000 towards its $150,000 goal, with a likely need to raise many millions more to go through with the sale—technical questions remain. Moving the satellite from one orbital slot to another is not an issue: satellite operators routinely move satellites from one geosynchronous slot to another to backup or replace other satellites or to serve different markets. However, with the satellite specifically designed to serve North America, it’s unclear its communications payload could be effectively reconfigured to serve other regions, like Africa or Asia.
Kosta Grammatis, the head of the project, said in an email interview last week that he wasn’t concerned about those technical issues. “The system was designed to reallocate resources based on demand and therefore maximizing the satellite’s capacity,” he said. “It is my understanding that this same technology can be used to reconfigure spot beams to serve a different geographic region. The outcome may be less than optimal but certainly feasible.” (TerreStar officials did not answer questions about these issues by publication time.)
There’s also the issue of taking on the cost and complications of operating a satellite when a number of other companies are already providing satellite-based Internet service, with more on the way. For example, O3b Networks is currently developing a constellation of medium Earth orbit satellites designed to provide Internet access to underserved regions of the globe (the company’s name is derived from the phrase “other three billion”, referring to the number of people with no means to access the Internet). The company is backed by a roster of investors ranging from satellite operator SES to HSBC Principal Investments to Google, and has raised $1.2 billion to date.
Wouldn’t Buy This Satellite, then, be better off partnering with O3b or another company? Grammatis said no. “They are simply a backhaul provider and we have different visions,” he said, referring to O3b’s plan to serve Internet service providers instead of going direct to consumers. He did not comment on other companies that either are, or are planning to, directly serve individuals, from global operators like Inmarsat to regional players like IPSTAR, which provides satellite broadband in the Asia Pacific region.
|“Many communications satellites do not operate at 100% capacity, and we would like to put that extra capacity to work improving the lives of many,” Grammatis said.|
By focusing on what some might consider a pie-in-the-sky quest to buy a satellite, some wonder if the project is missing out on near-term opportunities to help provide access. For example, Buy This Satellite benefited from some publicity associated with the Egyptian protests and Internet cutoff, but could they have helped restore access to protestors? “We reached out to the TOR project, who is currently fundraising to acquire sat terminals and had a plan of implementation. We also began a dialogue with leaders in the communication satellite industry in an effort to provide a free or cost subsidized service to the citizens of Egypt,” Grammatis said. He added, ironically, that the project had several contacts in Egypt “but due to the Internet outage we were unable to get in touch with them.”
Recently, Grammatis has suggested that the project might move past trying to buy TerreStar-1 to some kind of backup plan. “[I]t’s not certain this particular satellite will work out. It’s not completely out of the question, though,” he told Time in an interview published last week.
Grammatis said in last week’s email interview that satellite operators may be willing to donate unused capacity on existing satellites. “A beautiful outcome of the press we have been receiving has been the outpouring of support from the satellite industry,” he said. “Many communications satellites do not operate at 100% capacity, and we would like to put that extra capacity to work improving the lives of many.”
Donations of excess bandwidth may not be as attention-grabbing as trying to buy a giant satellite, but it may turn out to be a more effective and efficient way of serving their ultimate goal of helping connect people to what is becoming an essential resource in the 21st century.