Broadband, Silicon Valley 'Digital DNA' Seen Driving Satellite Boom
Money has poured into the satellite world in recent years as the cost of entry headed quickly and inexorably down and commercial attractiveness of satellite broadband skyrocketed, speakers said Monday at Satellite 2016. Helping drive that has been a generational change of people involved in the satellite industry and "an influx of digital DNA" from Silicon Valley, and results have been more capital availability for such things as low-earth orbit (LEO) fleets, high-throughput satellites and more investment in earth observation ventures, said James Murray, a partner with investment bank PJT Partners. Whether those pocketbooks stay open remains to be seen, he said: "Either they'll play out well and more capital will come in … or someone's going to stub their toe." The industry is "on the cusp of dramatically reducing the cost of accessing space," he said, so back-end companies involved in new means of launch technology and satellite manufacturing are the safest investment.
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Lower manufacturing costs have driven some of the LEO interest, as has the growing commercial value of each person connected to the Internet, fueling the demand for broadband connectivity, said William McCombe, SSL senior vice president-corporate finance and strategy. But space carries "tremendous early stage risk hurdles many businesses do not," which can actually be an advantage, said Jeff Rath, UrtheCast executive vice president-corporate finance and strategy: "You've got substantial barriers to entry behind you."
Incumbent satellite companies could be in for tough times as startups spring up driven by economic trends, Rath said. "If I was in a business building satellites … I'd be wondering what my future holds. You can debate who the winners will be, but I bet you'll have a short debate at who some of the losers will be." He didn't name names. McCombe said the industry is "a bit more nuanced than one solution [dominating] all markets,
Some urged a better regulatory framework for space debris issues. Space Angels Network Managing Director Chad Anderson said many companies are working on solutions such as harpoons and static electricity, but none will come to fruition until a regulatory framework mandates fines and who pays them. A commercial solution "is very difficult because we don't know where the market is," he said. Internationally, debris regulatory environment "is mush," Rath said. "It ebbs and flows with the political dynamic of each country."
Many commercial solutions are underway for the separate -- and growing -- problem of network interference, speakers said. "Everyone in the value chain right now is working toward more effective ... prevention" and better mitigation after the fact, said David Hartshorn, Global VSAT Forum secretary general.
The growing number of earth stations being deployed increases the probability of interference, said Andrew Lucas, Harris CapRock chief technology officer. But mitigation can be hugely laborious, said Simon Gray, Eutelsat field support manager-system integration. He cited the four weeks it took the company to track down the cause of radar trespass into L-band communications -- a cause ultimately pegged to a single F connection in one terminal. Especially in the consumer very small aperture market, where mass numbers of terminals are manufactured, "the battle the industry faces is to go to the lowest common denominator," Gray said.
DOD hasn't seen major interference problems, but the growth of commercial satellite use and smaller antenna sizes mean more should be expected, said George Tong, DataPath vice president-global project engineering and technology. He said low-cost network components aren't inherently a problem as long as systems go through extensive testing.
On the future of laser communication technology, Rob Busch, Intelsat vice president-network engineering, said his company and many others are looking into the technology: "When it makes financial sense, we'll be there."