Following the broadband money

Satellite operators play broadband card in Europe

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All the talk of delivering high speed broadband has thus far centred on fixed and wireless technologies. The result is that network buyers may easily forget the contribution satellites can make to providing access at reasonable cost to people who live in remote or hard to get to places.

The European Satellite Operators Association (Esoa) remedied that on 31 May, attracting not one but two European Commissioners. The day conference was nominally to discuss how to bridge the gaps in broadband coverage and funding, but in reality it was to remind everyone of satellites’ unique charm, and to hear how the US and Australia are exploiting satellites in their national broadband plans.

Satellites could be important in speeding up progress on the European Commission’s Digital Agenda targets says  Digital Agenda boss Neelie Kroes. In a progress report released the same day, Kroes said 65% of Europeans were now using the internet regularly, 26% have yet to go online, and progress on delivering high speed broadband access was slow.

Some 200 delegates at the Every European Digital (EED) conference heard that 10m households across Europe stand no chance of getting broadband without government support. Another 17 million families are unlikely to get even 2Mbps broadband under present plans. That leaves about 100 million voters without access to a service that is increasingly seen as a human right.

€12bn broadband investment

This is a problem for Europe’s political class. The European Investment Bank has already spent €12bn since 2000 on broadband. But Europe is still far short of its Digital Agenda’s goals of everyone on broadband by 2013, and for all to at least 30Mbps with 50% on 100Mbps by 2020.

The EIB’s Harald Gruber says achieving that will cost between €72bn and €200bn more. Of this the EIB might contribute about 10% at best. The rest must come from the private sector, but private and institutional investors don’t like the risk the sector presently offers, he says.

Edit Herczog, who sits on the European Parliament’s budget committee, made it clear that member states are unlikely to earmark more than they already have for broadband. Incumbent operators are already indebted, and regulators are driving down prices by insisting on things like lower termination fees.

The quest for other sources is now on, with Sweden’s regime of sticks and carrots looking appealing to some other countries. And although Gruber is too diplomatic to be explicit, it is clear that member states need to look again at how to make broadband infrastructure investment attractive to private investors.

Birds in the sky are worth it

In the meantime, satellite operators contend that they can already supply download and uploads speeds that are equivalent to UK national average speeds, about 6Mbps download, and 1Mbps upload, at the same price as the copper wire ADSL networks most use now. However, users’ upfront costs are higher because they need dish antennas and set top boxes to complete their connection. Satellite operators argue that they already provide the satellites at their own cost, so the state could and should subsidise end users under certain conditions.

In France, for example, fixed and mobile network operators have to say where they will not provide service for five years. People who live in those areas can get up to €600 towards the cost of the satellite kit and installation.

The Welsh Assembly makes available up to £1000 to get remote homesteads online, including via satellite. But Warwick University’s Chris Doyle questions whether the Welsh should continue to subsidise those whose second homes are in the valleys and hills.

Aarti Holla, Esoa’s secretary general, notes that a fixed wire installation in an Italian mountain village cost €3000 per household. Satellite could have delivered the equivalent service for €500, she says.

No-one argues that satellites are the only answer, or even a permanent answer. There is grudging agreement that some places are just too hard or costly to reach with terrestrial services.

Holla makes three points: satellite coverage is relatively cheap to deliver; it is instantly available, but most current requests for broadband tenders are written so as to exclude satellite-based solutions.

Europe’s politicians have a duty to educate member states on the potential benefits of satellite, and member states should remind their local authorities that Europe’s state aid rules permit them to use the money to subsidise end users,she says.


Written by Br0kenTeleph0n3

2011/06/01 at 09:07

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