Well Hyped Satellite Broadband Provider OneWeb Files For Bankruptcy

from the another-empty-promise dept

For years, we've been promised repeatedly that new broadband technologies would soon arrive to disrupt the broken, cable broadband versus telco DSL duopoly in the states. And for just as long, these emergent technologies, for a wide variety of reasons, have failed to materialize.

In the late 90s and early aughts it was the promise of broadband over powerline (BPL) -- an emerging tech that utilized utility poles and electrical lines to help deliver broadband to underserved regions. But while BPL was widely hyped and repeatedly used to justify rampant deregulation at the time (read: we don't need pesky consumer protections because this new competition will soon arrive to fix everything), the technology wound up being an interference-prone dud. All of the deregulation based on this emerging technology remained intact however, and the U.S. broadband competition problem in many ways got worse.

Cable enjoys a massive, growing monopoly over broadband across huge swaths of the U.S. thanks to phone companies that have effectively given up on upgrading or even repairing aging DSL lines across numerous markets. These days, instead of BPL, fifth-generation wireless (5G) is often used as the carrot on a stick panacea to justify industry deregulation, even if (1) such deregulation repeatedly tends to make U.S. telecom problems worse, and (2) 5G isn't going to be universally available, affordable, or as unrestrictive as fixed-line broadband for a laundry list of reasons.

Low orbit satellite broadband is also often used to justify endless deregulation of the sector and the steady erosion of U.S. telecom consumer protections. In part because the lower orbit means such connections should have lower latency than traditional, often crappy satellite broadband. But there too the hype, at least so far, has failed to live up to reality. For example OneWeb, one of several operations exploring the space, has been hyped for a few years as a deus ex machina that will soon fix much of what ails U.S. broadband. From a speech by FCC boss Ajit Pai last year, for example:

"Low-Earth orbit satellite companies like OneWeb have a sky-high ambition: to close the digital divide around the globe. Their technology holds special promise for bringing high-speed broadband service to those in rural, Tribal, and remote areas, connecting many who have never been connected before. This meshes well with the FCC’s twin priorities of closing the digital divide and promoting innovation."

But that excitement appears to have been put on hold with the news that the company will be filing for bankruptcy after COVID-19 (allegedly) complicated the company's quest to find additional financing. The project was one of several undelivered promises linked to Softbank and its founder Masayoshi Son:

"Son had often pointed to OneWeb as one of the cornerstones of an investment portfolio that ranges from ride sharing, co-working and robotics to agriculture, cancer detection and autonomous driving. The startup was working on providing affordable high-speed access anywhere in the world and targeting 1 billion subscribers by 2025. Son has painted a picture of a future where satellite networks cover every inch of the Earth and a trillion devices connected to the internet disgorge data into the cloud where it is analyzed by artificial intelligence."

There's certainly other low orbit satellite broadband providers that will hopefully have better luck. Most notable being Elon Musk and Space X's Starlink, which will hopefully help bring a new connectivity alternative to rural America (but not more populated markets where competition issues are also prevalent):

"Latency of less than 20ms would make Starlink comparable to wired broadband service. When SpaceX first began talking about its satellite plans in late 2016, it said latency would be 25ms to 35ms. But Musk has been predicting sub-20ms latency since at least May 2019, with the potential for sub-10ms latency sometime in the future.

The amount of bandwidth available will be enough to support typical Internet usage, at least in rural areas, Musk said. "The bandwidth is a very complex question. But let's just say somebody will be able to watch high-def movies, play video games, and do all the things they want to do without noticing speed," he said.

Again, though, we've seen so many promises of disruption in this space it's not unreasonable to only buy into the hype once you actually see a commercial service deployed at scale. And even then, you'll need to see what pricing (and usage caps and other restrictions) look like before declaring the U.S. broadband problem fixed. The public also needs to be continually wary of folks eager to use the remote promise of disruption to justify efforts to make life ever-more comfortable for entrenched broadband monopolies (read: less regulation, less oversight, fewer consumer protections), a cycle of dysfunction we've been trapped in for the better part of several decades.

Filed Under: broadband, competition, low earth orbit satellites, satellite broadband, satellite internet
Companies: oneweb


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  • icon
    Richard M (profile), 31 Mar 2020 @ 9:54am

    SpaceX looks better

    SpaceX might make it where others failed for a few reasons.

    SpaceX already has five times the satellites the Oneweb, so much closer to where they need to be.

    SpaceX has a cost advantage that no other company is going to be able to even come close to. Being able to get your satellites in space cheaper than everyone else is a huge advantage.

    SpaceX is already making a profit from doing launches. While it may take longer than planned it is not such a that big a deal like companies that make zero income until they are up and running.

    And last but not least Elon Musk did not build SpaceX and building Starlink to get rich. He has a dream of us being able to go to mars, and building Starlink is the way he plans on financing his dream. This motivation gives him an advantage over people/companies just in it for the money.

    reply to this | link to this | view in chronology ]

  • icon
    afn29129 David (profile), 31 Mar 2020 @ 11:19am

    bandaids and rationed bandwidth

    The only real longterm solution is the deployment of lots and lots of fiber. Fiber that goes all the way to user. The demand for bandwidth will only increase and the current (non-) solutions like satellite, 5g, are not the way to do it.

    reply to this | link to this | view in chronology ]

    • identicon
      OGquaker, 31 Mar 2020 @ 8:48pm

      Re: No profit in overstock.

      Soon after the 1994 'deregulation' of the 1934 communications act, Wallstreet sunk $billions into fiber, every R.R. right of way, every NG pipeline, every State highway, sometimes two ventures, multiple polyethylene ducts on each side, and DitchWitching every street in Downtown for plastic tubes in 2000.
      My brother's house sits between a 70 year old underground Federal/DOD coax right-o-way, now privatized, a 30inch interstate pipeline, and with fiber running up his driveway/easement for a mountaintop transmitter site without any electric utility in his canyon, dialup, and spotty cell service.
      Crash, in 2000, AT&T and a few others grab upside-down 'Investors' fiber assets for 1c/1$, of course Jon Postel had died of a heart attack so the internet was now a tiered profit center.
      The US is swimming in fiber & the telcos have abandon their last mile, their REGULATED POTs lines.
      A shortage of bandwidth is one more Capitalist marketing ploy.
      US hospitals went from municipal and charity to for-profit in the last 40 years: Sha-zam, we have half the beds of any other first-world nation and Just-in-time medical equipment. Trump is sending 22 aircraft to China to pick up equipment this week.

      reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 31 Mar 2020 @ 12:28pm

    Even forgetting the old problems..

    With Sat and how weather and other things between the sat and your receiver..
    Lets ask how secure this is. Broadcasting a Signal that spreads out over distance to your home, and A Good 40-100 mile area??
    Then lets suggest that the NET companies WOULD NOT allow you to only have a Basic setup to connect, they would REQUIRE you to have a Box that Scrambles and de-scrambles the Data...Digital encoding and then add the scrambling.
    Then comes the BIGGEST problem(IMO) LEO sats have to keep moving. There are other tech also being added. but the interesting part tends to be Ground based, controls. There is A TON of stuff up there and allot of it is old and dead. Can we setup a 1-4 sats to handle 1/2 of the people in the USA? There are some companies AS the one mentioned, that wanted Sats around the world. to Cover all of the internet, with over 1000 sats.
    But we will still have some problems related to the Old type sats. Weather, and atmosphere can cause many problems. As well as delay. This isnt Laser tech, and at most Microwave wide band. With digital tech it should work, but the cost of getting it up there and USABLE..isnt going to be easy.

    reply to this | link to this | view in chronology ]

    • identicon
      teka, 2 Apr 2020 @ 6:11am

      Re: Even forgetting the old problems..

      Dang, you are right.
      We better tell ol' Musky to de-orbit all those wasted satellites, he should have considered the problem of digital encoding and that things move up there.
      I mean, how embarrassing that they never considered any of that, right?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Mar 2020 @ 1:08pm

    Until the greedy fuckers in Congress are stopped from taking 'favors' from the main telecoms/broadband suppliers and those same suppliers are held to account for creating the greatest monopolies/duopolies just about anywhere on the planet, stifling every other company and town from doing their own thing, this wont be the last of the smaller companies that folds. Such a shame when the service they give up to the point of collapse is so much better than the 'big boys'!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Mar 2020 @ 7:02pm

    Your economic analysis of whether the wireless network is more or less available is off. Wireless is cheaper and the "deregulation" of it usually means "criminal but we get away with it".

    5g is the same as 4g is the same as 3g based on my observations.

    reply to this | link to this | view in chronology ]


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