Bridging the Digital Divide with a High Quality, Low-Cost, Timely Solution

Tom Wheeler closed out his tenure as Federal Communications Commission (FCC) Chairman in a most surprising manner — releasing a call for more than $80 billion to build out fiber-based broadband services to the approximately 14 percent of the United States not covered today by fiber to the home.

It is indisputable that improving the nation’s digital infrastructure should be a significant part of any national infrastructure program because of economic and other upsides. However, an approach that relies on a single high-cost technology would be unjustified, not to mention uneconomical. Fiber is not the only solution to bridging the digital divide and providing broadband services at the FCC-defined broadband speed. In just a couple of months, Hughes Network Services will offer across the continental United States and parts of Alaska a new High Throughput Satellite (HTS) service that offers FCC broadband speeds, utilizing its recently launched EchoStar XIX satellite. ViaSat also plans to offer a similar service in a few months when its next HTS is launched and placed into commercial service. Other systems, including OneWeb’s non-geostationary satellite system, will follow.

In approving New York’s use of federal universal service funds, the FCC recently recognized the importance of including satellite and technology neutrality. “[We] require that New York adopt a support allocation mechanism … that is technology-neutral … [Satellite] providers must be given the opportunity to compete for Connect America support that is allocated in partnership with New York’s program,” the FCC said in a statement.

Satellite broadband service along with the introduction of new high-speed services means that quality broadband service will be available in the next couple of months to consumers across the United States, in even the most rural and remote locations, without the government having to subsidize service to the tune of $80 billion. Even as demand across the country increases for broadband services, the cost of placing additional satellites into service is only a small percentage of the cost to build fiber out to the homes of the final 14 percent of Americans not covered today.

In addition, consumers are well served by satellite broadband. Over the past few years, we have seen that even where higher speed competitors are available, a significant number of consumers select satellite broadband service, based on other factors such as price and quality. With the introduction of FCC broadband speeds on satellite systems across the country, we can anticipate that this will increase. This demonstrates that the market is leading to an economically efficient outcome where satellite broadband providers are most successful at winning customers where they have a deployment cost advantage.

Since high-speed satellite broadband service will be available in months, consumers in rural and remote areas are able to have service quickly. Fiber-based services would require significant advance deployment delays, and take years to build out — leaving consumers without service in the interim. In addition, the quality and price of satellite broadband is on par with terrestrial services. Consumers balance all of these and other factors in making broadband purchasing decisions.

The cost to build and launch a broadband satellite is high, but is in no instance anywhere near as expensive as to build out fiber to an equivalent number of homes. Once in service, the cost of providing satellite broadband is insensitive to factors such as distance and topography. It is thus the most cost-effective deployment alternative in areas where the cost of providing terrestrial broadband service is high, including very rural and remote areas.

Satellite broadband service is succeeding in the marketplace in a manner that is consistent with economic efficiency. As the president and Congress consider their plans to improve the digital infrastructure, they should ensure any approach they take is economically efficient and technology neutral, and of course, include satellite. VS