Elon Musk’s Starlink low Earth orbit (LEO) network has been awarded US$885 million over 10 years to build rural internet access in the United States.
This amounts to an almost billion-dollar vote of confidence in a service that is at the preliminary consumer testing stage.
Why it matters: Better quality internet will help drive more adoption of field-level technology on farms.
For rural and remote Canadians, does this mean that competitively priced high-speed broadband access will finally be available anywhere?
For others, will new technologies compete against today’s cable industry and independent internet service providers?
The new low Earth orbit services are still one or two years or even more away from full-scale commercial operation.
LEO satellites are different from the GEO (geostationary) satellites that have been in service since the 1960s. They are also different from existing LEO networks like Iridium and Globalstar.
With thousands of satellites being produced, the unit cost of LEO types are projected to drop because they’re produced by industrial processes, whereas geostationary satellites are built one by one, making them comparatively expensive. As well, LEO satellites are launched just a few hundred kilometres above the earth, so launch costs are much lower.
LEO satellites also have much lower latency than GEOs because they’re much closer to Earth. Latency refers to how much time it takes for a signal to travel to its destination. LEO satellites are projected to have latency as low as terrestrial fibre networks and even lower in some situations. GEOs take more than 600 milliseconds to make the trip from Earth to the satellite and back.
The new LEO networks are broadband, providing much more capacity (higher speeds) than the earlier-generation Iridium narrow band capability that has delivered satellite phone service and short data messages since the 1990s.
Amazon’s Kuiper program and Starlink are getting most of the press but they’re not the only entrants in the broadband LEO market. O3B has been operating for several years in mid-Earth orbit (MEO), a little higher up than LEO.
These new entrants have added satellite-to-satellite communications, which should reduce costs by reducing the need for ground stations and double hops. An email going from Canada to China can go up to one satellite and then transfer to other satellites in orbit to arrive at its destination.
OneWeb is another player competing in this market.
Telesat Canada also has a major LEO system on the drawing boards and has launched several demonstration satellites. Canada’s federal government has invested heavily in this venture with cash and commitments to purchase service in the future.
There are four or five entrants (if you want to include O3B) chasing the same market with highly capital-intensive technology. Will there be more big bankruptcies like those in the narrow-band LEO sector in the early 1990s?
To remain viable, Iridium had to be reorganized and required a major commitment from the U.S. Department of Defense for future service.
OneWeb’s reorganization is an indication of the risks involved, even though it emerged successfully.
Mergers aren’t a practical solution to the problem of too many participants. They can’t merge because the technology of each company is incompatible with the others.
Although there are unanswered questions, these are exciting times in the satellite industry. The emerging LEO systems will shake up the traditional satellite industry and challenge terrestrial fibre-optic communications.
It could end the digital divide.
Roland Renner is a senior fellow with the Frontier Centre for Public Policy and a former employee of Bell and Telesat. This article was first published on Troy Media’s website. It was edited for length.