Satellite broadband is about to go mainstream, offering rural residents true high-speed Internet and millions of suburban dwellers another viable option.
Within 18 months, it should be available in-flight for some commercial airline travelers.
Douglas County-based WildBlue Communications is behind the transformation of a service that for years has largely been relegated to subscribers in far-flung territories because of its slower speeds and higher costs.
WildBlue, a wholly owned subsidiary of Carlsbad, Calif.-based ViaSat, last week began offering 5-megabit-per-second broadband for $50 a month in Colorado, with 12 Mbps service starting at the same price slated to launch in February.
In comparison, WildBlue’s existing 400,000 nationwide subscribers are paying $80 a month for 1.5 Mbps service, which is faster than dial-up but hardly sufficient for bandwidth-heavy activities such as downloading music and movie files and streaming video.
WildBlue’s new service will soft launch in a few other states, including Wyoming and Nebraska, in the coming weeks and should be available nationwide by the end of February.
“Historically, satellite has been for the unserved — you have no other technology, then satellite is for you,” said WildBlue chief executive Tom Moore. “We think this will transform that marketplace. There are probably somewhere between 10 and 20 million homes that are either unserved or underserved.”
The new service, billed as delivering a “fast as fiber experience,” is competitive with standard offerings from CenturyLink and Comcast. But Moore acknowledges that it may be more compelling for customers who don’t have access to cable service, whose superfast Internet offerings are more widely available than those from telcos.
Adoption in urban markets may also be curtailed by installation fees of up to $250 and the lack of deep bundling and promotional discounts. The service requires a satellite dish similar to those used for pay-TV services from Dish Network and DirecTV.
“There is certainly demand for broadband delivery from satellites, not only in non-urban areas but also from airplanes,” said Walter Piecyk, an analyst with BTIG Research in New York. “The price that can be charged in those applications make them better target markets for broadband services than dense markets, which face more competition and potentially lower prices.”
ViaSat, which acquired WildBlue in 2009, is installing antennas on JetBlue’s aircraft for service expected to be available within 18 months. The company is also in early discussions with Continental Airlines, Moore said.
The new services will ride on ViaSat-1, a high-capacity satellite that launched in October. ViaSat-1 has 20 times more capacity than the two satellites behind WildBlue’s legacy service.
Satellite broadband rival Hughes Communications, acquired this year by Douglas County-based EchoStar, plans to launch a similar, high-capacity satellite in 2012.
Moore said the industry’s big change is not about the physics of satellites, but economics.
“If you can do something to change the economics, i.e. launch a satellite that’s larger than all satellites over North America combined at the same cost that we launched our prior satellites for, then all of a sudden you can transform that experience,” he said.
ViaSat spent $400 million on the launch and buildout of terrestrial equipment to support the service.
The new satellite can serve up to 1.5 million customers at the faster speeds. The service can reach 20 Mbps, but unlike wireline competitors, the company won’t charge based on speed, Moore said. Instead, the service will be based on data consumed, similar to 4G packages from cellphone providers.
The company is still refining policies related to data caps, but it “might start slowing down things that consume large amounts of data,” he said. Subscribers who exceed the cap will be able to buy additional buckets of data.
Andy Vuong: 303-954-1209, avuong@denverpost.com or twitter.com/andyvuong
Comparison of speeds and prices
During a brief test of WildBlue’s satellite broadband, the service held up well against my Comcast residential connection. Two speed tests, performed on speedtest.net and speakeasy.net, returned speeds of 10 megabits per second and 16 Mbps, respectively. Sites such as espn.com and eBay appeared to load at about the same rate as they do on my home service. Here’s a look at the cost of standard, stand-alone broadband in metro Denver:*
Comcast
20 Mbps service for $30 a month for first six months, increases to $45 for the next six months, and $60 thereafter; $7 a month to lease a modem, which can be purchased from an independent retailer; installation fee of $50.
CenturyLink
12 Mbps service for $30 a month for first six months, then increases to $50; $6 per month to lease modem or $100 one-time charge to purchase modem from CenturyLink; installation fee of up to $100.
WildBlue
5-megabit-per-second broadband for $50 a month; installation/upgrade fee of up to $250; pricing on leased and purchased modems not available. 12 Mbps service starting at the same price slated to launch in February.
*Promotional pricing subject to change and only valid for new customers; some restrictions may apply. — Andy Vuong
This article has been corrected in this online archive. Originally, due to incorrect information provided to The Denver Post, the speed of the
satellite broadband service currently available from WildBlue
Communications was stated incorrectly. WildBlue now offers 5 Mbps service and plans to
formally launch 12 Mbps service in Colorado in February.
