Presented to:
Alaska Broadband Task Force
Open Skies Program - Next Generation
by Spacenet
August 01, 2012
Agenda
• Spacenet Overview
• Satellite Broadband for Rural America
– StarBand Open Skies Overview
– StarBand Presence and Experience in Alaska
• Open Skies Program – Next Generation
• Next Steps and Q&A
2
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Our Passion
• Managed Network Services Provider
– Design, Implement and Manage Data, Voice and
Video Networks
• Tailored Managed Network Services to Meet
Customer’s Precise Needs
– Access, Security
– Full Lifecycle Solutions
– Value-Added Services
• Technology-Neutral Approach
– Satellite, Broadband, MPLS, DSL/Cable, 3G/4G
• Serve 4 Primary Markets
– Enterprise (Large, Multi-site Business Networks)
– Government (Public Safety, Emergency Management
Agencies)
– Industrial (Oil & Gas, Utilities)
– Small Office/Home Office (StarBand High-speed
Internet)
3
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Our Network
•
•
•
•
•
4
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Nationwide MPLS &
Satellite Network
130,000+ managed
sites
1.5Gbps of B/W
across multiple
satellites
60,000+ Broadband
circuits provisioned
On-Site Field
Services
www.spacenet.com
Satellite Broadband
• Ubiquitous Communications Delivers
Broadband Virtually Everywhere,
Irrespective of Distance
• Established Technology that Can
Deliver Broadband Instantaneously
(No need for build-out)
• Measurable Commodity (i.e.: TRUE
Cost of Delivery is Exactly Known)
• Scalable and Reconfigurable
• New Generation Satellite can deliver
10x the speed of current technology
5
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StarBand Open Skies Alaska
• $100M Set Aside for
Satellite in Broadband
Initiative Program (BIP)
– Funded by American
Recovery and
Reinvestment Act
– Administered by Rural
Utility Service (RUS) of
USA
– Spacenet Awarded
$6.2M for Alaska –
handled by StarBand
– Allows for ~4200
Households in Alaska
– Grant Expires
September 2013
6
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StarBand Presence in Alaska
• History
– StarBand was the First Company to Offer 2-way Broadband Satellite
Internet Solution in 2000
– First Customer Installed in Alaska in 2001
– 3,028 Active Sites in Alaska
– 198 Alaskan Communities Currently Served
– Over 40 Dealers and Installers
• Open Skies Accomplishments To Date
– 2,074 Open Skies Sites in Alaska To Date
– 141 Alaskan Communities
– ~$1M Contributed to State Economy through June 30, 2012
• Installation, Commissions, Shipping, Advertising
7
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StarBand Experience in Alaska
8
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Presented to:
Alaska Broadband Commission
Open Skies Program - Next Generation
by Spacenet
August 01, 2012
Technology Approach for 100% Broadband Coverage
• Tiered Strategy
– Terrestrial (Fiber/DSL) Coverage for ~70% of Alaska Population
– Wireless - Last Mile to Reach Additional 10-20%
– Satellite-Only Economic Option to Reach last 10-20%
• 20K Households in Villages with Density of < 300 Households
• Estimated 30K households (10%) in Areas Covered by Terrestrial,
but Beyond the Last Mile Reach
• Similar Model to Australian Next Generation Broadband Network
Strategy
– Alaska Has Significantly Higher Percentage of Isolated Population, but
Similar Tiers of Cost Analysis Would Apply
10
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Technology Approach for 100% Broadband Coverage
11
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Satellite Economic Models and Considerations (ROM)
• High-Throughput Satellites (HTS) Typically Provide 100Gbps Capacity
– Via Multiple Spot Beams and Earth Station Gateways
– Typical Spot Beam Capacity ~ 250Mbps – 1Gbps:
• Approx. Number of Spot Beams for Alaska = 8-16
• Approx. Number of Gateways for Alaska = 1 – 2
• Total Capacity for Alaska= 4Gbps – 8Gbps
• Support 10/3 Mbps Service to 50K Subscribers
– ~$400M per HTA Satellite to Serve 500k subs = $800 Satellite Capital Cost per
Subscriber
• For 50k Alaska Subscribers, Est. Cost is $40M
– Alaska Gateways Estimate: $10M
– ~$500 CPE Cost
• For 50k Alaska Subscribers, Est. Cost is $25M
– TOTAL for 50k Subscribers Capital Cost Estimate:
• $75M Capital Cost
• $1500/Subscriber Capital Cost
– New Technology Designed to Allow for Self-installation and Maintenance
12
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Satellite Economic Model (Cont.)
• User Populations: Different Needs and Abilities to Pay (Overall
Solution Can be Profitable)
– Alaskan Rural Residents
• Need Coverage to Bridge Digital Divide, but Cost is Significant
Factor
– Alaskan Tourism Industry
• Remote Lodges and Destinations Need Coverage to Satisfy Highend Customers
– Commercial Interests
• Mining/Oil & Gas/Pipeline Customers Require High Reliability,
100% Coverage
– First Responders
• Significant Bandwidth Available for Critical Situations with No
Restrictions on Location
(13)
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Satellite Economic Model (Cont.)
• Ownership/Division Models
– State Could Purchase Partial Satellite
• Partnering with Another Party Interested in CONUS Coverage
– State Could Agree to Long-term Lease on Partial Satellite
– State Could Purchase Entire Satellite
• Distribution Options
– State Could Provide Service Directly to Residents and Commercial
Interests
– State Could Wholesale Service to Multiple Providers (Australia Model)
(14)
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Satellite Economic Model (cont.)
• ROI for the State:
– Assume a wholesale model of $15/sub/month charged to the ISP
– Assume the ISP charges market rates of $40-$50/sub/month
– Assume 50k subscribers
• Total Revenue/Month to the State
– $750k/month
• ROI for a $75M investment: 8.33 years, IRR 9%
• Typical life of a Satellite: 15 years
(15)
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Conclusions
• Goal of High Speed Broadband to ALL Residents in Alaska is an
Absolute Paradigm Shift
• Tiered Approach is Most Practical Way to Achieve Goal
– Fiber to the Home in Densely populated Areas
– Fiber to the City mixed with DSL/Cable/Wireless for the Last Mile
– Next Gen. Satellite for Rural, Last Mile Fill-in, and Emergency Response
• Next Generation Satellite Costs will Allow for 8-10x the User
Experience at Lower Costs than Current Satellite Technology
• Commercial Satellite Providers have not seen Alaska as
economically viable and will not focus on it without the
influence of the State
• Spacenet, and it’s parent Gilat, are Uniquely Qualified to
Provide Alaska the Experience and Technology to Realize the
Next Generation Satellite Option
16
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Appendix
Starband Open Skies Alaska Promotion: In Print
Newspaper Ads,
Inserts and Direct
Mail
18
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StarBand Case Study: Northwest Arctic Borough
•
Centered out of Kotzebue (not eligible)
–
•
Keys to Success
–
–
•
–
–
19
In Region Support
• Long-time Dealer has Mentored Village
Positive Word-of-Mouth
Impacts
–
Ambler
Significant Penetration: 50-60 % Considered Saturated Buckland
Facilitates Small Businesses
• Inventory Management, Sales
Enables Inter-village Communication
• Via Facebook, email
Teacher Satisfaction
Deering
Kiana
Kivalina
Specialists Kobuk
Noatak
Noorvik
Selawik
Shungnak
Total
Housing Units
StarBand Units (2010 Census) Penetration
23
75
31%
38
98
39%
14
44
32%
27
101
27%
24
85
28%
5
36
14%
37
114
32%
35
153
23%
68
186
37%
62
3
5%
274
954
29%
© 2012 Spacenet Inc. Not for redistribution without permission.
www.spacenet.com