In the new communications satellite economy, the dominant religion is faith in the global network.
Executives at larger-than-life projects such as Iridium, claim that their services will be the norm because people are becoming increasingly mobile and therefore need a connection no matter where in the world they happen to be. To serve this peripatetic populace, providers say they must blanket the globe with a weave of smaller, low-Earth-orbit satellites.
Next to these ambitious endeavors, a proposal to use one stationary satellite to enable cellular users to call from anywhere within North America might seem misguided. But David Otten believes the satellite communications business is all about thinking -- and acting -- locally.
A wily veteran with more than 30 years of satellite engineering under his belt, Otten is developing a service he thinks will have instant benefit for companies building their personal communications system (PCS) wireless networks. "I can give PCS providers complete coverage in launching one satellite," said Otten, president of Celsat, the company he founded in the early '90s to build this service.
But Otten's project has yet to earn its wings �- a coveted FCC license. Otten has waited four years so far for 25 MHz of spectrum �- out of a total of 70 MHz available -� in the 2 GHz band, the erstwhile home of mobile television broadcasting units.
While these current tenants will be moved elsewhere along the airwaves, Celsat's proposal is going toe-to-toe with bids from giants including Globalstar, Iridium, and ICO Global Communications. These projects seek more elbow room to augment their current global projects or to build their second-generation networks. But Otten thinks they have enough spectrum already, and it's time to share the projected satellite communications wealth with smaller ventures like Celsat.
"Some of these [companies] have asked for the whole works, and that potentially cuts out cost-cutting competition [if the FCC grants these requests]," Otten said.
What Celsat wants is the chance to prove that smaller -- in some cases -- can be better if the technology/business mix is right.
Celsat promises to do for North America what a service such as Iridium promises it will do globally -� help wireless phone users go where their respective terrestrial networks don't. Where Iridium talks about the general wireless user, Celsat is more focused. It will help string together the various pockets of PCS networks scattered throughout North America to help this foundling service get off the ground.
Cost and service advantages
Started by the FCC auction bonanza of 1995 and '96, the PCS network is still in its early stages as service providers that are building out their systems. The idea of PCS is that it would provide competition in the cellular industry, a one-time cozy business. Traditional cellular was small as no market had more than two carriers, and this resulted in high phone rates. PCS is supposed to change all of this just by adding more competitors. But first it has to catch up in terrestrial coverage that has taken the traditional cellular industry 14 years to build.
This is where a service like Celsat comes in. Not only does Celsat claim it will offer complete coverage for PCS carriers instantly with a single satellite launch, it also can be cheap. Otten said his hybrid network, which he said will cost US$500 million to build, will bring wireless rates down to less than 10 cents per minute, including long distance charges. By contrast, multibillion-dollar systems such as Iridium talk about rates in terms of dollars per minute.
Part of what should make Celsat an attractive proposal for the FCC is the sophistication and simplicity of its technology, said Peter Karabinis, program director for new projects for Ericsson Inc., which makes cellular phones and designs cellular networks. Speaking on a cell phone from his hotel room in Paris, Karabinis explained how Celsat will capture the interests of increasingly demanding users in North America, no matter whether bigger projects begin offering service first.
"The US represents a very spoiled market [in wireless]. The end user expects quality," he said. "When they push in the numbers and punch the send button, they expect their call to go through."
This seemingly basic demand is one that will not be easily satisfied by satellite networks, said Karabinis, who is working on the development of a number of satellite communications projects, including the regional Celsat as well as its competitors Globalstar and ICO. The key for success in a wireless network is its link margin -- a quantity, measured in decibels, that governs how much mobility and freedom an end user will have with a service. Link margins, when high enough, can allow users to maintain connections when driving in a car, or calling from inside a building. The higher the link margin, the more freedom of mobility a user has. Many systems have a link margin of 10 decibels, and this doesn�t get a user much.
"With 10 decibels I could not talk to you right now," noted Karabinis. "Each time I go through a wall, I lose 10 decibels of link margin."
Celsat's system has a link margin of 16 to 22 decibels, which would leave a user with six to 12 decibels when calling from within a hotel room. By comparison, ICO�s is between eight to 10 decibels, and Globalstar's is a maximum of 8 decibels. None of these systems leave a user with much to work with, Karabinis said. "Voice quality is related to link margin. With a higher link margin, the better the quality," he said.
Another advantage Karabinis sees for Celsat is the communications interface between wireless ground stations and the satellite. Much of the cellular world speaks some dialect of the European-developed Groupe Speciale Mobile (GSM), including Europe, Asia, and a growing populace in North America. For a satellite communications system to mesh with a cellular network on Earth, it is better off using the same protocol.
At Ericsson, Karabinis and other engineers developed a derivative of GSM as part of their work in tinkering with dual-mode PCS/satellite handsets. As part of his work with Celsat, Karabinis has developed a version of this air interface protocol that will mesh with the GSM used in North American PCS networks. The results will make life easier for consumers.
"You'll go to buy a PCS phone, and the single- and dual-mode phones will look exactly the same," Otten said, noting that there is currently a 10 percent difference between dual- and single-mode handsets in Europe.
Regional vs. global services
Despite these advantages and the costs, some satellite experts point to the fact of Iridium's upcoming launch of service -� and the fact that Celsat has yet to get a license �- as evidence that Celsat's time may have already passed.
"They were ahead of their time when they first applied, but they will be usurped by Iridium and Globalstar," said Leslie Taylor, president of Leslie Taylor Associates, a communications consulting company.
Still, others see the smaller scale communications satellite glass as half full. Roger Rusch, a former colleague of Otten's at TRW -- a major communications satellite manufacturer -- is somewhat sanguine where global satellite networks of Iridium's ilk are concerned. "We are in a runaway financial situation where every wild idea gets taken seriously," said Rusch, who designed the now-defunct Odyssey communications network for TRW.
Odyssey, which was to use technology similar to that being used by Iridium and offer similar services, was not widely liked throughout TRW, Rusch said. "You have to have a willingness to throw money at a project," he said. TRW pulled the plug on Odyssey in February, citing a lack of cash.
At the time he worked on it, Rusch said he believed a global, roaming system would work if only because of the circumstances that existed in wireless communications five years ago. Rusch noted that back then, a lot of the world wasn't yet covered by cellular, and cellular was expensive. But now, the niche market for satellite �- to cover areas where cellular doesn�t exist -� is fast disappearing. And prices for service have plummeted to less than $1 per minute. Because of these two reasons, Rusch believes projects like Iridium will not make it.
"These guys will lose every penny they put into it," he said.
Economics aside, Rusch also sees technological hurdles in the path of these would-be world beaters, obstacles that existed five years ago and still remain today. "You have all these satellites sliding over the surface of the earth, continuously reassigning calls, and this presents a huge traffic flow management problem on Earth," Rusch explained.
This technological feat of coordinating and integrating intersatellite hand-offs could prove to be an Achilles' heel for low-Earth-orbit-based global satellite networks. Somewhere beneath the fanfare for these Star Wars-esque networks is a movement to make regional networks much like Celsat proposes for North America. Karabinis said he is working on similar regional projects for Asia and Europe. This latter project will tie Southern Europe wireless users together with those in the Middle East and Africa.
"The advantage of a regional satellite network is that the satellite stays put," noted Karabinis.
A geostationary satellite gives users a wide elevation angle through which to reach the satellite. Non-geostationary satellites, such as those used by Globalstar and Iridium, move swiftly and spend more time at the horizon. This means the elevation angle with the user will be lower, said Karabinis. The higher the elevation angle, the more reliable the link margi. This means a better-quality call, even if there is a few seconds delay with a satellite hovering 22,320 miles above Earth.
"I may not like the delay, but if you tell me my bill will be at least a third cheaper than non-geostationary satellite services, then I'll put up with the delay," said Rusch.
Celsat still must wait through two more years of FCC procedures to find out whether it will get a license to use part of the 2GHz spectrum. And there are those who believe regional systems are passe for communications satellites, particularly for this band of the 2 GHz spectrum.
"This is a global allocation for this service, and global allocations should go to global services," said Taylor. "A satellite service that covers North America only is a poor use of this spectrum."
Innovative technology doesn't necessarily get the nod in the free market system. In the computer software industry, the path traveled by small companies with innovative ideas is littered with road kill that dared to get in the way of Microsoft. Will the satellite communications industry be any different? Stay tuned.
