When Industry Canada committed last year to giving every Canadian access to high-speed Internet services by 2004, satellite industry executives must have been rubbing their hands in glee.
The reason for this excitement? In many isolated communities - and many not-so-remote areas as well - a satellite connection is the only game in town for broadband access to the Internet.
Shane Donally lives in one such locale. The cattle rancher, whose country home is located 15 kilometres from the village of Chaubin, Alta., says he can't access cable or DSL high-speed Internet services. That's why two months ago he signed up for DirecPC Satellite Edition from Bell ExpressVu. "For high speed, it's our only option," says the on-line gaming aficionado.
Mr. Donally, 43, says he likes almost everything about the service - its speed, reliability and ease of use, especially compared with his sluggish dial-up service.
Travel a few minutes outside Barrie, Ont., and satellite is also the only high-speed option. Freelance writer Peter Walpole says cable or DSL services aren't available for his rural home office.
So he jumped at a recent free offer to review the DirecWay service from C-Com Satellite Systems Inc. "If I want broadband, I'm never going to get cable or DSL. So satellite's the answer."
The only thing Mr. Walpole doesn't like about the service is its $150-a-month price tag. Even though DirecWay made him more productive, he says he'll have to cancel the service when he has to start paying for it. "Once they get the price close to what DSL or cable costs [around $50 a month] then I could justify it. But still, I don't want to see it go."
Because satellite broadband is relatively expensive, operators admit they can't compete head-to-head against terrestrial Internet service providers. That's why they now focus almost exclusively on markets not served by cable or DSL.
However, supporters say satellite broadband will get cheaper and more reliable with the launch of new "birds" that support the more efficient Ka-band transmission technology - satellites such as Telesat Canada's Anik F2, slated for launch in 2003.
The Ka-band is higher frequency - 18 to 31 gigahertz compared with 10.9 to 17 GHz for today's Ku-band. And the new satellites will also exploit improved receiver and terrestrial network technologies.
"Once we get to Ka-band systems, the capacity gets a lot less expensive and we'll have a lot more throughput," says Paul Bush, vice-president of corporate development at Ottawa-based Telesat, which operates some of the satellites that transmit Web traffic.
Mr. Bush says direct-to-user, two-way broadband Internet access could be priced in the range of $50 a month with Ka-band satellites, which would put it at least in the same ballpark as cable and DSL.
With C-Com's DirecWay, Canadians pay from $1,300 to $4,000 for an antenna and modem, a $50 annual activation fee, plus $150 a month for unlimited, two-way Internet access at a maximum speed of 400 kilobits per second - about the same speed as residential DSL.
DirecPC, which uses the same antenna that brings in ExpressVu's digital satellite TV signal, costs about $50 to $60 a month for the service, plus the cost of the satellite modem and installation kit (around $300). However, the service only receives data (at about the same speed as DirecWay). To browse the Web, subscribers must pay an extra $20 or so a month to connect to a separate ISP over phone lines.
But the direct-to-user services that C-Com and ExpressVu offer represent just one way to use satellite broadband technology.
The other is to provide a single, high-capacity link to a remote community. From there, bandwidth can be distributed through terrestrial links to consumers and businesses.
It's this model that most interests planners in the National Broadband Task Force, the group charged by then Minister of Industry John Manley with making good on the government's broadband commitment. The Task Force set its sights high: It is not just recommending that every Canadian have access to faster-than-dial-up service - it's also recommending 1.5 Mbs to every office desktop and home.
In June, a private-sector task force told Minister of Industry Brian Tobin that such an initiative would cost up to $4-billion. However, Mr. Tobin responded at the time that, if Ottawa paid only to bring the technical infrastructure to remote communities and left the private sector to take care of the delivery of Internet services to individual households, the cost would be more like $1.5-billion. Mr. Tobin has since received preliminary approval for a proposed $1-billion broadband access spending program.
While high-speed Web access for isolated communities is the most obvious market for satellite broadband, there are lots of other, more populated places where a lack of cost-effective alternatives allow the technology to compete.
As in the case of freelance writer Mr. Walpole, more than a few suburbs still are not served by DSL or cable Internet links. And since the cost of dedicated lines can reach into the thousands of dollars, satellite broadband players say their services offer a viable alternative.
"When you look at it that way, satellite is very inexpensive," says Leslie Klein, C-Com's president and chief executive officer.
C-Com also recently announced a mobile broadband access service based on new self-aiming satellite antennas mounted on vehicles and construction site trailers. When a vehicle stops, the antenna can automatically lock into a signal.
With files from Beppi Crosariol and Adam Bisby