Just over five years ago, Facebook’s connectivity plans took a huge blow when the AMOS-6 satellite was destroyed during a Falcon 9 rocket test fire. The global connectivity giant Facebook had planned to lease capacity off this satellite and after the failure, it never pursued a replacement.
While Amazon and SpaceX are taking part in the current space race, do not expect Facebook to join the party. Facebook’s Vice President of Connectivity Dan Rabinovitsj, who is responsible for making decisions about working more directly with the satellite industry, is unequivocal that he doesn’t see the company taking this route. He points to the fact there are already three companies investing a ton of money to put Low-Earth Orbit (LEO) constellations up, and Facebook has existing partnerships with the Geostationary (GEO) operators.
“We see no intrinsic value in us piling on. It is a fairly crowded field in LEO, and when you add the GEO world, investing in a constellation does not make sense for us,” Rabinovitsj says. “Investing heavily in partnering with satellite operators is actually critically important and part of our strategy.”
From the outside, it looks as though things changed after 2016 after the launch failure of AMOS-6, but Rabinovitsj says the company stands by its decision not to own its own satellites. While Rabinovitsj does not believe this failure changed Facebook’s view of the satellite industry, the thinks the emphasis shifted from developing core technology for satellite constellations to partnering with the satellite industry, because that is where Facebook now thinks where its largest contribution can be made over time.
“As we see so much investment on LEO constellations, there is going to be a lot of capacity. We want to help bridge that to the ground game. We think that ultimately that is where we can add more value to satellite operators. We need to figure out the best places to put capacity and then monetize that capacity and make it affordable to communities that are in the low socio-economic strata which are not able to pay the ARPUs that you have in other areas,” he says.
However, while the company is not looking to own satellites, Rabinovitsj says Facebook will look to get more involved in the space sector. He feels the company is in a very good position to partner with satellite companies, because it is not in direct competition with the industry. “We have very relevant experiences, tools and products that we can bring to the table,” he says.
Sale to Amazon Scales Up Ambition
In mid-July, The Information reported that Amazon had recently acquired a team of wireless internet experts from Facebook’s satellite connectivity group. Amazon is in the midst of developing LEO constellation Project Kuiper, which has FCC approval for 3,236 satellites in LEO. Amazon did not release a statement on the deal. Commenting on the deal, Rabinovitsj is unequivocal that this does not mean Facebook is scaling back its plans with the satellite industry.
“We viewed this decision as scaling up our ambitions in the satellite industry,” he says. “Sometimes businesses have to recognize that the best path to scale is outside the confines of their own domain. We definitely feel that with this transition, the impact of our investments will be 10 times more impactful.”
Now, Facebook can focus on scaling the other parts of its portfolio that serve the rest of the telecom industry, including its close relationships with other satellite operators. Rabinovitsj says Facebook remains committed to working with its satellite partners to expand connectivity through Wi-Fi, Magma (enabling satellite-based LTE and converged communications), OpenRAN and potentially other programs in the future.
The team in Northridge, California, that was sold to Amazon has commercial space heritage and expertise in designing, building, and testing advanced optical communications and radio frequency systems and solutions.
Rabinovitsj says the company never planned to launch its own constellation, but wanted to accelerate innovation in the satellite industry by focusing on technology that could dramatically increase the capacity of satellite systems, as a value exchange with satellite operators.
“After we began our collaboration with an industry leader, we realized that our team would have a much better path to realize the full potential of their capabilities if they were part of a company who were planning to build and operate a constellation of satellites,” he says.
So, was it a difficult decision to let such a talented team go? “All decisions that relate to people are difficult. But our decision to find a home for our space development team and site was taken with a people-centric perspective, to honor their work and to ensure that they had the best possible path to positively impact the satellite industry,” Rabinovitsj says. “We’re incredibly proud of what they have accomplished already and are excited to see what their future holds as part of one of the premier LEO satellite companies.”
Rabinovitsj believes satellite will be the only answer to some connectivity challenges, as it is going to take decades to build fiber out in some communities, and in other areas it is not possible.
“If you look at maritime and aviation, satellite is the only game in town. The satellite industry has something unique to bring to the table here. In the U.S., there are 30 million people that don’t have broadband Internet access,” says Rabinovitsj. “The FCC is re-defining what that speed is. It is astounding that we have this connectivity challenge in our own backyard. And if you look at emerging markets such as Sub-Saharan Africa, Asia Pacific, Latin America, you have many communities that are completely unconnected. They may not get the speeds they need without satellite.”
Tools to Reduce the Digital Divide
The goal of many companies, not just Facebook is to bridge the connectivity gap, and level up communities and societies in a digital sense. Facebook has products like Network Insights, which is all about harnessing data science to help service providers of all kinds to make better choices on how to spend their capital. The theory being if you have better data analysis with what is happening with traffic patterns and user experience, you will use your capital more efficiently.
“On the infrastructure side, we are very much into changing the core economics. In one case, you have money and you want to use it wisely. But, in another case, you look at the challenges that operators have, [they] are going to be in an interesting position. As these LEO satellite constellations come online, they are going to face some of the same issues that some of the mobile operators and fixed line operators have had to face for years with regulators in terms of how to close the ground game,” Rabinovitsj says.
Rabinovitsj admits life is not that easy when you are operating a service for connectivity. People assume that data is unlimited. Prices haven’t gone up. “What has happened to traffic is crazy. Once you have an unlimited bucket of data, people use it. So, all of these networks have become heavily loaded. To deal with that, you have to invest in infrastructure. We are trying to address the core CapEx and OpEx challenges in the industry,” he says.
As satellite players look to scale their networks and businesses, they might be thinking of networks shifting more functionality towards the edge of the network. “I think for the satellite industry, this has been a critical migration of where resources sit. Because if you think about it, if you have to pull the data plane all the way back to a central location, that is a lot of bandwidth being used on that satellite link where you really want that to be dedicated to the payload and for the users to get the benefit,” Rabinovitsj says.
Facebook has developed a cloud native distributed packet core. It has put this into the open source community, under the auspices of the Linux foundation. “When it runs at the edge of the network where you have a satellite ground station or user terminal, you can run a full Wi-Fi or LTE controller stack locally. What this means is that backhaul from the satellite dish is really being used to provide access and not all the management tasks. It is little things like this that will enable the satellite operators to move away from providing direct services to one households with a dish, and providing local communities LTE with a small cell or community Wi-Fi from a Wi-Fi access point,” says Rabinovitsj.
While many have had this laudable aim of connecting the world, finding business models that work has proven elusive. Often, companies have to provide services in communities with low disposable incomes, and these technologies, whether satellite or others, are often expensive to deploy. As an example, Google recently abandoned its much vaunted and talked about Loon project.
Rabinovitsj admits these are hard problems and if it was easy, it would already be solved. He believes that technology is not the critical gap anymore, a lot of the hardest problems when connecting the unconnected are business model issues. While he didn’t want to speak directly about failure of Loon, he added, “One of the things we have been working on is seriously developing playbooks around Network-as-a Service in the most challenging areas. Some of the problems we see in the telco space are a combination of regulatory environment, business realities, and figuring out ways to address the two together.”
Rabinovitsj believes there are many different ways Facebook can partner with the satellite industry, including challenging the idea of a ground station. “It is an edge data center in many ways. As a company we want to help the performance of that edge be really great for Facebook properties. But, we also want to push more of the telecoms stack closer to the edge. This will improve latency and reduce speeds. We are definitely very interested in collaborating on that infrastructure side,” he says.
And then when it comes to last mile access, anything Facebook can do to improve the experience and lower the costs for people getting onto those networks, the company is all in.
“This can include regulatory issues and clearing spectrum where we have been one of the most active companies in the world and getting spectrum allocated for higher altitude platforms, and really spending time with the ITU [International Telecommunications Union], and making sure there is as little as friction as possible as these constellations get launched. There will be a ton of complexity when you have to get inside some of these countries regulatory regimes. We are totally prepared to invest and partner with satellite companies here,” he says.
A Case Study in Connecting Peru
But, things are changing and companies like Facebook are looking to bring more creative solutions to the table. It was involved in an interesting public project in Peru, Internet Para Todos, an effort to bring mobile communications to rural Peru. Rabinovitsj praised the regulator in Peru calling them, “extremely progressive” in working out what was contributing to lack of investment here. There are some interesting challenges that Rabinovitsj points out. For example, if there are multiple mobile operators with buildout obligations in which they will get fined if they don’t deploy spectrum in certain regions, deployment may not make sense economically, as the operators can’t generate enough revenue to justify it.
“It is extremely difficult to put fiber in these areas. These mobile towers today are satellite backhauled. They are connected by satellite. So, instead of having a situation where operators overbuild or don’t build at all, we have created a very thin OpEx operator in Internet Para Todos in Peru to show how sharing assets amongst multiple operators can close the business case to serve rural areas. And Internet Para Todos are developing playbooks and principles that allow them to have the lowest operational overhead as possible and deliver services at the lowest possible cost. Operating in rural areas and underserved communities has to be sustainable,” says Rabinovitsj.
Facebook has metrics and targets for OpEx and CapEx which will lead to a profitable business for low ARPU customers. Rabinovitsj believes this experiment is going well, and a lot of positives are coming out it, both for Facebook, and the Peruvian authorities.
“It is clear when we added a second operator, and then a third, the economics gets better. We see the same thing for shared fiber assets. The sharing of assets is critical. If you switch this conversation to 5G which is a much bigger topic, it is very clear, if every operator in every market overbuilds 5G, particularly like millimeter wave which is a very small radius of coverage compared to low band, it is an unaffordable situation,” says Rabinovitsj. “It will be way too expensive. Sharing industry assets on towers will be really critical. This is one of the big areas of unlocking value for unconnected communities is figuring out how to reduce the total cost of delivering service.”
Like most companies, Facebook has had to adapt in the face of the COVID pandemic, which has highlighted the importance of connectivity in areas such as remote education and healthcare. Rabinovitsj says while the company has not changed its strategy, tactically it has had to adjust. “A lot of things we were working on, such as field trials and deployments have been slowed down because we can’t get people out into the field to work with partners. For example, the last few months in India have been heartbreaking to see what our partners are going through. The pandemic has forced us into some very interesting innovations. For example, we had the fortune to figure out how to do field trials virtually. We have set up environments and test beds to allow us to carry on even when we couldn’t get people physically in the field. That is a long lasting innovation,” he says.
Perceptions of Satellite
Rabinovitsj is not from the satellite world, and comes from the telecoms and semi-conductor environment. From his outside perspective, he believes the heavy investment and the fast pace of the LEO constellations has stimulated more competition and created an incentive for the entire industry to go faster, even though LEO is not the answer to all connectivity problems.
“The economics are starting to look a lot more compelling and interesting for the companies that are going to be operating them. [Yet] all of the capacity of these LEO constellations is not going to match terrestrial fiber. There are constraints with how much you can do with the satellite industry,” he says.
The flip side of this is that there is no other technology that can see everywhere on the planet. “There is a business mix that used to be heavily dominated by government and military, but now in the IoT [Internet of Things] space can add another layer of revenue which can help fund these constellations over the long-term, which means a much better business outcome for the industry delivering connectivity to people, but also creating a compelling business for IoT applications,” he says.
Rabinovitsj believes Facebook’s relationship with the satellite industry will get tighter, with all of the things Facebook can do to help the satellite industry that other parts of the telecom universe have made over time. “One of things I talk to satellite operators about is the next wave of satellite operator investments has a greenfield opportunity that can remake what their industry looks like and how connectivity is delivered,” he says. “That is really exciting. Things will be different in a five year horizon, and we are excited about being part of that journey. We are open to the idea that as opportunities come up in the satellite industry, we will be able to take advantage more in investing in the hardware and software solutions that will be required to deliver the service.” VS
Editor's Note: A prior version of this story incorectly described the cloud native distributed packet core.