Europe turns to satellite in U-turn to heal digital divide

Healing the digital divide is proving elusive in Europe as in other regions partly because it is a moving target with the bar continually being raised. In the European Union (EU) that bar is currently set at 30 Mbps for 2020, defined as the threshold of “fast broadband”, currently deemed the minimum for participation in the “global digital economy”. The EU’s target is for 100% fast broadband coverage by 2020 but only one of the 27 member states, or 26 if and when the UK departs, is on course to meet that mark. That is Malta, as average EU fast broadband coverage stands currently at 80%, with France and Poland anchored at the bottom well behind all the others at around 50%.

This has all come to a head recently as the EU came to realize its current strategy of pushing fiber roll out had no chance of meeting that target, even though it had succeeded in bring many urban households above the next threshold of 100 Mbps defined as “super-fast broadband”. Ironically the strategy has failed partly because it has allowed countries too much local autonomy in technology and the financing model, so that many states have gone full out for FTTH (Fiber to the Home), while Germany is notable for its extensive use of vectoring technology to increase speeds over copper. Germany did this precisely as a quick fix for the digital divide by raising bit rates for existing DSL subscribers and ludicrously this was criticized by the EU for retarding fiber roll out and hampering competition. In fact, use of vectoring can dovetail neatly with fiber roll out by increasing speeds over ever shorter copper wires. Rather than being just a stop gap measure vectoring can be part of a coherent fiber roll out strategy.

The problem though is that large numbers of European homes are too far from the nearest fiber termination point for vectoring to be possible before the 2020 deadline and for that reason the EU has belatedly turned to satellite to plug the gaps. This has caused confusion because the EU had been opposing satellite and hardly mentioned it in strategy documents addressing the digital divide. This was still the case in the Commission’s response to the 2018 report from the European Court of Auditors entitled “Broadband in the EU Member States” carrying the strapline “despite progress, not all the Europe 2020 targets will be met”. Again satellite was not mentioned. Yet this has not always been the case, recalling that just in 2013 the then European Commissioner for Digital Agenda Neelie Kroes declared that “availability of satellite broadband in all EU member states is an essential stepping-stone for making a Connected Continent a reality.”

But then the EU seemed to conclude that the bit rates available over satellite would not keep pace with the upgrading in definition of fast broadband. There was some truth in this since satellites are not conducive in terms of capacity and economics for large scale interactive unicast communications. But the economics changes radically as population density decreases. Although fiber-based communications are always cheaper once the cable has been laid the cost of rolling it out becomes prohibitive at very sparse populations over large distances. The same applies to an extent for cellular communications which is why, especially in mountainous terrain, 4G/LTE is not cost effective either for delivering fast broadband to remote communities.

Given this background the EU has brought satellite back on the agenda, to the surprise it seems of the industry itself. There was bemusement last week at a European Space Policy conference organized by Business Bridge Europe, a lobbying firm focusing on the EU, when the current European Digital Economy Commissioner Mariya Gabriel declared the commission was fully backing the deployment and use of high-throughput satellites for the remotest regions of the continent to fill the much-criticized broadband digital divide.

Gabriel indicated that the target for ubiquitous coverage by 2020, as well as the next goal to achieve total 100 Mbps penetration by 2025, had prompted this rethink. Eutelsat’s CEO Rodolphe Belmer was then quoted by Space Intel Report calling for a coherent regulatory position rather than any specific measures such as subsidies for remote broadband provision. The implication here is that given the right regulatory framework satellite internet communications can just about be made to break even at least. Of course, the payback period for fiber roll out becomes very high and almost effectively infinite in very sparsely populated areas, while for satellite there is a fixed cost per user dependent on the amount of bandwidth consumed, offset by any subscription.

The immediate challenge though is to meet those coverage deadlines and in response to Gabriel’s comments, Evert Dudok, president of the EMEA Satellite Operators Association, pointed out that even in a wealthy country like Germany, where significant investment had been made in fiber alongside vectoring, there was no chance of connecting all citizens in time via either fiber or terrestrial mobile.

The main challenges on the satellite side are in the economics, capacity and latency. The big satellite players in Europe, chiefly Eutelsat, Inmarsat and Intelsat, have for years been arguing they have a big role to play in healing the digital divide but have failed to articulate a clear compelling strategy. One problem is that geostationary satellites orbiting the earth at 36,000km impose a signal latency up to 700 milliseconds, which is too great for many interactive services including video conferencing.

Various efforts have been made to reduce latency and bandwidth costs by deploying smaller lower orbit satellites, with one of the latest and most promising initiatives called OneWeb emerging in 2015 with backing from Intelsat, Qualcomm, Airbus and Coca-Cola, alongside various investors including Softbank, which stumped up $1.2 billion. Airbus was charged with building OneWeb satellites costing less than $500,000 each and weighing around 140kg. Orbiting at just 1200 Km latency has been cut to 30 ms.

The full constellation comprising almost 900 satellites is expected to become operational late this year or early 2020. But it has already run into challenges that may be more than teething troubles, such as the increasing overcrowding in the low orbit zone within which space is more limited and consideration has to be paid to decommissioning after operational life is over. Other challenges include interference with earth-bound transceivers and opposition to coverage from some countries, notably Russia which fears they could be used for espionage, or to bypass state censorship of Internet content.

In fact, China has been in discussion with Russia’s Roscosmos state space corporation over creation of a joint global satellite communications system as a direct response to OneWeb, suggesting low orbiting constellations will split along geopolitical lines. At any rate the EU’s volte face comes at a time of flux in satellite communications and raises as many questions as it answers. There is little doubt that fiber is the long-term answer to provision of high bit rate interactive services to rural communities while in the meantime satellite and digital terrestrial broadcasting should sustain TV services.