Space-Based Shortcuts Advance in the Last-Mile Connectivity Race Against Fiber

Sitting on the stage of a crowded Denver Convention Center conference room, Dan Dooley, CCO of Washington D.C. metro-area based mobile connectivity company Lynk, tries to explain that the cell phone he’s holding in his hand will be able to connect directly to a satellite. The audience seems to collectively tilt their heads at this claim. They want to know where his network’s cell tower is located.

“The cell tower is in space,” Dooley tells the Connect (X) crowd, pointing his cell toward the ceiling. “It’s on our satellite. When my phone can’t find a cell tower on Earth, it looks for the satellite in space and connects the same way.”

There is a long pause before someone raises their hand and asks Dooley if his cell phone is a special-made device.

“Nope. Just a regular, consumer smartphone that you see everywhere,” he replies. “This is where we see the real value for our customers. We’re the last mile. People don’t have to buy special equipment. They’re going to be able to connect the phones they want to have.”

Many consumers are already familiar with the idea of a phone connecting directly to a satellite, like phones already do for everyday geolocation services. People within the telecommunications industry, however, understand how difficult it is to provide the same direct-to-phone pipeline for broadband internet and cellular service. Entire satellite systems have historically been dedicated to this type of connection in regions where satellites are the only option. These systems require special handsets and network hardware.

The satellite industry has made tremendous progress during the past few years in delivering “cell tower in space” capabilities to the consumer. Lynk successfully sent a text message from a satellite in space to an unmodified mobile phone on Earth in February 2020. Two years later, the company conducted connectivity tests using its own satellites to 6,000 devices around the world, including smartphones, tablets, IoT devices, cars, trucks, and even tractors, enabling direct two-way connectivity.

In March 2021, another D.C. area-based space connectivity company, Omnispace, successfully tested a 5G-via-satellite capability using a number of commercial-off-the-shelf devices in a LinQuest lab demonstration for the U.S. Navy and Marine Corps.

Omnispace is building a Non-Geostationary (NGSO) satellite constellation that will integrate with terrestrial mobile networks to bring interoperable “one network” connectivity to global end users and IoT devices. The company just launched two critical test satellites Spark-1 in April, followed by Spark-2 in May, and plans to test a global, mobile network with direct-to-device connectivity from its satellites.

Another company, AST SpaceMobile, is working to build a space-based cellular broadband network accessible directly by standard mobile phone. AST SpaceMobile will soon test its technology after the BlueWalker 3 satellite launches. Launch is currently set for September. Even though its technology is unproven, AST SpaceMobile says it has deals in hand with mobile network operators (MNOs) that serve more than 1.8 billion subscribers combined.

Larger global satellite service companies are getting closer to consumer mobile devices, too. As recently as this past June, engineers at Hughes Network Systems successfully connected 5G consumer smartphones to the internet using a Jupiter System VSAT gateway and high throughput satellite. Hughes says its platform is future proof and will allow customers to transition from LTE traffic to 5G.

Luxembourg-based OQ Technology is already pumping satellite connectivity into 5G hybrid IoT networks in the enterprise market. Even Amazon is getting in the game with a backhaul partnership on paper with Verizon that would link its future Kuiper satellite network to Verizon’s mobile service.

These accomplishments, combined with the public’s awareness of rapidly evolving satellite connectivity offerings from SpaceX, Viasat, OneWeb, and Telesat, have not gone unnoticed by the larger telecommunications industry. That’s especially clear at events like Connect(X) where Dooley’s exchange with a stunned audience about cell towers in space was only a few hours after Viasat Chairman Mark Dankberg gave the day’s opening keynote address.

“Satellites are definitely creeping more and more into conversations here about how to bridge the digital divide both in the world and even in the United States,” says GVF Secretary General David Meltzer just before he takes the stage to lead a ConnectX panel, which includes a discussion on how satellite services are perceived by MNOs and customers.

During the talk, Slava Frayter, Gilat Satellite Network regional vice president for North America, says that perceptions and reality in terms of what modern satellites can do and at what cost are still very far apart. Like the rest of the satellite industry, Gilat spends considerable time and effort on educating the market and explaining how these complex technologies can change lives for more people, businesses, and governments at a much lower cost than services requiring extensive terrestrial infrastructure.

“We’ve been saying ‘it is too expensive and sometimes physically impossible to bridge the entire divide with fiber’ for a long time, but today, we can now say that modern satellites are more than just only an option for a handful of scenarios,” says Frayter. “They are a very good option that can deliver a much more powerful service than the billions of potential new customers realize. Today, we can also say that satellites are your best bet for extending your network and reaching new customers.”

Frayter places extra emphasis on the word new and strategically directs his statement to MNOs, who are desperately seeking new customers after trading them back and forth between each other for a decade. In the United States, these new customers exist in states like Wyoming, with a population density of just 5.85 people per square mile – well below the density level that fiber ISP companies like Verizon, AT&T, and EarthLink have calculated to be the minimum requirement for an investment in fiber roll-out. That doesn’t even factor in household economics and determining how many of those 5.85 people would be able to afford the monthly services and fees.

Satellite service is one of several connectivity mediums in a race against time and fiber to connect the last mile. Fiber advocates see anything else as just short-term solutions, touting a fiber optic network’s ability to deliver the highest average connectivity speeds in the world. But fiber is, and has historically been constrained by high infrastructure deployment costs. It has also been plagued with inconsistent cost estimates.

Five years ago, the U.S. Department of Transportation compiled statistics that put the average cost of laying fiber in the United States at $27,000 per mile. That is somewhat consistent with a report published last year by the North Carolina Broadband Infrastructure Office, which operates in a state with more than 1 million people without access to broadband. The state put its average fiber deployment costs at between $15,420 and $21,588 per mile for deployment using the “stand and lash” method of attaching fiber to the communications spaces on existing telephone poles and between $23,647 and $33,106 per mile for trenching fiber underground.

The “stand and lash” method estimate does not include permitting fees, which range from $5 to $15 per attachment, per pole, per year. The report cites an example — “By using 22 poles per mile and a single attachment, $110 to $330 in fees could be incurred per mile each year.” There are also “make ready” costs to bring poles in compliance with local, state, and federal ordinances, and even owner specifications. Who owns the poles can make a huge difference in costs, as well as the condition of the pole.

U.S. telecom Consolidated Communications, like most terrestrial ISPs, likes to project its fiber costs by the home rather than the mile. Last year, the company claimed it could deploy fiber in the U.S. for as low as $450 to $500 per home, due to its ability to leverage existing telephone pole infrastructure. In a report publishing the company’s research, Consolidated President and CEO Bob Udell says those costs will increase as it moves into more rural areas without telephone poles. This was before inflation and cost increases due to supply chain issues and labor shortages. The latter is important to consider as Udell says labor alone accounts for about 55 percent to 60 percent of fiber deployment costs.

“Money alone doesn’t build broadband infrastructure,” says Nick Maynard, co-founder and CEO of US Ignite, a non-profit that collaborates with cities and smart communities to create research test beds for future connectivity solutions. “People build it. Someone digs the trenches for the fiber. Someone installs it and someone else plans all of that from a company headquarters or city hall. All of those people are in short supply right now.”

This leads to a conversation with Maynard about how few CTOs and CIOs there are at the municipal and state government level. “These are the people with the technical project management expertise that would help broadband service providers keep deployment costs in check,” he says. “But, local and state governments can’t pay these people enough and the job entails a tremendous amount of work. So, these CTOs and CIOs just end up going to work for the service providers.”

From a bird’s eye view at the federal lobbying level, the Fiber Broadband Association and other terrestrial industry associations estimated the cost of nationwide fiber deployment to reach 90 percent of American households at $100 billion above funding levels that existed before U.S. President Joe Biden passed a $1.2 trillion infrastructure spending bill. President Biden and congressional Democrats initially asked for $100 billion in broadband funding. Republicans in Congress agreed to $65 billion.

Of that $65 billion, $42.45 billion is set aside for the Broadband Equity, Access and Deployment (BEAD) program that will fund technology neutral connectivity deployments to areas that lack access to broadband service offering download speeds of at least 25 Mbps and upload speeds of 3 Mbps. Fiber advocates got a lot of money in the bill, but not as much money as they needed to build a fiber network that would connect 90 percent of U.S. households.

The Satellite Industry Association (SIA) hailed the technology neutral approach and said satellites can help terrestrial providers in reaching their goals by providing the connections between terrestrial network hubs.

This scenario creates an advantageous environment for satellite companies, which don’t have to deal with half of the headaches and costs described above. At Connect(X), attendees from the satellite industry say they are growing more and more confident in their longevity as a last-mile cost-saver over fiber infrastructure. Some companies like Lynk and AST SpaceMobile have business models that bet on fiber never reaching the true last mile, barring some major population shift.

“If it’s this difficult and expensive to get there in the U.S., imagine how difficult it is in Africa,” says Dooley. “The market for a direct connection to satellite will be there for a long time. The connection may not be as fast as fiber, but it will bring people who haven’t ever had any connectivity into the modern economy. The impact is huge. And, we can do this right now.” VS