Satellite Broadband Providers Lobby EC For Funding

Satellite broadband providers gathered in Brussels on 24 May to lobby the European Commission to provide public funding for the rollout of satellite broadband across Europe.

At a conference held by the Association of Telecommunications and Value-Added Service Providers (VATM), industry stakeholders said that satellite was the only form of broadband provision to offer universal coverage, patching the holes left by other solutions, such as fibre optic networks and 3G.

The technology is therefore essential in meeting the key aim of the EC’s ‘Digital Agenda Action Plan’, to give every European citizen access to basic broadband by 2013.

“We have been working towards eradicating the digital divide since long before it became a political objective,” said Jürgen Grützner, managing director of VATM. “It will cost millions to get fibre to the entire population. With satellite it only costs when people say they want to connect.”

Subsidising equipment in under-served areas

One of the main drawbacks of satellite broadband is that the terminal equipment costs between €300 and €500, requiring a fairly steep initial investment on the part of the subscriber. VATM is therefore hoping the EC will subsidise this equipment, so that satellite broadband can be made available in under-served areas at an affordable price.

The US government bought into the idea back in 2009, investing $100 million in satellite technology to provide broadband in remote parts of the country. The investment meant that the cost of terminal equipment could be reduced by roughly $200 per subscriber.

“All we want is a level playing field,” said Grützner. “The public sector is pouring money into fibre. Satellite does not have a fair opportunity.”

According to Oliver Stehmann, the EC’s directorate-general for competition, satellite broadband should be eligible for European funding. However, current State Aid guidelines stipulate that public money can only be used to provide infrastructure that allows multiple operators to compete, in order to avoid creating a monopoly.

This caveat has meant that applications for public funding have been repeatedly rejected, because satellite broadband infrastructure tends to be owned by a single operator – such as Avanti or Eutelsat – with competition occurring at the service level.

Aarti Holla, secretary general of the European Satellite Operators Association, said that this was an example of a national tender that was “drafted to suit terrestrial network architecture” and does “not fit easily with satellite architecture”. ESOA will be campaigning for an updated set of guidelines at the Every European Digital event next week.

Satellite is part of the solution

There are signs that satellite is starting to be taken more seriously as part of the solution for closing the digital divide. During a recent speech in Cologne, Europe’s digital commissioner Neelie Kroes spoke of the importance of “using our investment in the EU space industry to ensure satellite plays its role in delivering broadband to remote areas”. Kroes also wrote to 21 of the EU’s 27 member states in February, urging them to remove the legal obstacles to the introduction of satellite broadband as a matter of “urgency”.

Avanti’s HYLAS1 satellite went live on 4 April, beating Eutelsat’s KA-SAT to the punch by almost two months. Both HYLAS1 and KA-SAT are Ka-band satellites, meaning they can provide two-way broadband services of up to 10Mbps. BT has already announced it will use HYLAS1 in its £132 million plan to get broadband to the remotest parts of Cornwall.

While HYLAS 1 is wholly owned by Avanti, all of the the infrastructure for the base station and the customer terminals is provided by Hughes Europe, a subsidiary of the Hughes corporation. In 2009, Hughes received $58.5 million in US government subsidies to help close the digital divide in America, and Hughes Europe is now hoping the EU will now move in the same direction.

“There is an urgent need to fill the digital divide, and that is a Europe-wide problem,” said Chris Britton (pictured), managing director of Hughes Europe, who also attended the VATM Satellite Day. “The next step is educating the market that there is a genuine alternative to digging up the streets. That has been our challenge from day one – getting the phone companies that are predominantly terrestrial to recognise that satellite is part of the solution.”

Overcoming the latency issue

Britton acknowledges that satellite broadband suffers from latency – a delay between requesting data and the receipt of a response. Compared to ground-based communication, all geostationary satellite communications experience high latency due to the signal having to travel 35,786 km to a satellite in geostationary orbit and back to Earth again.

However, Avanti’s chief operating officer Matthew O’Conner pointed out that 10Mbps is perfectly adequate for most day-to-day Internet applications, and only online ‘shoot-em-up’ games, such as Call of Duty, are really affected by latency. He said the emphasis that politicians put on headline speeds only exacerbates the digital divide, as operators are forced to focus on speed rather than coverage.

“As a satellite broadband provider, you can’t compete head-on with vast Gigabit fibre networks, so you need to focus on complemeting other solutions,” he said. “Our network starts where theirs stops. With satellite you have 100 percent coverage; without satellite you don’t. And I will argue with anyone, anywhere, that that is the case.”