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In February, the FCC released<\/b> its third Measuring Broadband America report (MBA report). While previous MBA reports have examined fiber, cable, and DSL connections, this latest report is the first to give satellite broadband the same coverage. According to the report\u2019s introduction, the FCC was waiting for the current generation of high throughput satellites to come online before comparing satellite with terrestrial offerings. Testing for the latest MBA report occurred in September 2012 and, as a result, only ViaSat\u2019s Excede service is covered as Hughes\u2019 Gen4 offering was only introduced the following month. The next MBA report should cover both offerings as well as their terrestrial competitors.<\/p>\n
There are a number of interesting points raised by this report and they are not all in its data tables. The first, and perhaps the most important thing to be gleaned from this report, is the simple fact that the FCC (and therefore the U.S. government) is considering satellite broadband service on a par with wired broadband offerings. This goes a long way to establish satellite broadband as a legitimate offering in a governmental context. This sort of status should be useful to satellite broadband providers competing for subsidies, such as the California Advanced Service Fund (CASF) grant requests that ViaSat currently has in progress. All of satellite\u2019s strengths can become weakness in such competitions when the speed of deployment, universal coverage, and extreme flexibility, which come from satellite\u2019s ability to deploy service with a minimum of terrestrial infrastructure, are seen as weaknesses because satellite service leaves no permanent infrastructure behind it.<\/p>\n
Because of this basis toward infrastructure over service, anything that bolsters the case for satellite\u2019s capabilities is an important advantage. Furthermore, in the MBA report, the FCC further validates satellite\u2019s case by concluding that satellite broadband can do everything the terrestrial broadband technologies can. The report specifically states that the FCC feels that satellite broadband is able to support web browsing, VoIP, and streaming video, covering the full gamut of Internet services. Of the great satellite bugaboo, latency, the report says: \u201cWhile latency for satellites necessarily remains much higher than for terrestrial services, with the improvements afforded by the new technology we find that it will support many types of popular broadband services and applications.\u201d This is an important validation of satellite broadband capabilities.<\/p>\n
Another interesting piece of information in this report is the finding that the average speed of an American broadband connection was 15.6 Mbps, an increase of 20 percent from the previous year. In this context Excede\u2019s 12 Mbps speed is quite respectable. The report does not, however, go into the details of bandwidth caps and attempts various providers have made to limit the total bandwidth consumed by their subscribers. This is clearly the weakest part of satellite\u2019s broadband portfolio although satellite companies are not the only ones attempting to control heavy users. This 20 percent growth must also be kept in mind when considering future satellite acquisitions and it will be reflected in the gradual reduction in the number of users that broadband satellite can accommodate.<\/p>\n
For the moment, however, the MBA Report indicates that Excede is not suffering from a lack of resources. In fact, of all the providers examined in this report, satellite broadband is delivering the best service in terms of real vs. offered download speed. FCC finds that Excede leads the pack, delivering an average of 137.1 percent of its advertised download speed during peak usage periods. By contrast, fiber delivered 115.3 percent, cable 98.5 percent, and DSL 85.3 percent of its advertised download speeds. From a satellite marketer\u2019s point of view these rankings couldn\u2019t be better. Fiber and cable subscribers are unlikely to switch to satellite broadband but DSL subscribers are an important target market for both ViaSat and Hughes\u2019 new offerings.<\/p>\n
Overall then, the FCC\u2019s February 2013 Measuring Broadband America report is a very positive release for the satellite industry. In general it makes a case for satellite broadband while remaining tactfully silent on its greatest weakness. While such a document will not change the reality of satellite broadband capabilities, it should improve the public\u2019s opinion of it and, hence, its competitive position. It will be interesting to see the next such report when Hughes and ViaSat compete head to head with each other as well as with the terrestrial alternatives.<\/p>\n
\nMax Engel is an experienced satellite industry and telecom industry analyst and founder of The North Star Consultancy. He can be reached at maxnorthstar@gmail.com.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"
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