Monday, February 14, 2011

Satellite Internet provider targets U.S. exurbs as growth market

The notion that being disconnected from the Internet is a problem largely confined to rural areas isn't true. The latest evidence comes courtesy of Arunas Slekys, vice president of corporate marketing for satellite Internet provider Hughes Network Systems.

Slekys told The Washington Post that Hughes' best growth prospects aren't necessarily deep rural America but the outer rings of metro areas where telcos and cable companies haven't built out their wireline infrastructures to provide premises Internet connections. "These aren't people sitting on a mountainside in Idaho," Slekys told The Post. "They're actually exurban. You can go 20 or 30 miles outside of D.C. and there are a lot of areas where you can't get terrestrial broadband."

Indeed. Ditto for other metro regions of the United States. Living in the exurbs often means no Internet, which won't help property values recover in despite their typically upmarket homes.

Slekys makes a excellent point about the extent of the problem in the U.S. But his company's solution is, frankly, not a solution. Even on an interim basis until terrestrial infrastructure is constructed to serve these offline areas. Satellite Internet connections are notoriously sluggish due to the high signal latency caused by the 46,000 mile round trip to the satellite and back to the Earth's surface and are prone to frequent drop outs. Then there are the dreaded FAPs, aka Fair Access Policies. This fine print in satellite providers' contracts allows them to slow your connection to dial up speed -- often for days on end -- if the connection is used too much or for applications that use a lot of bandwidth such as video.

So those of you in the offline exurbs, forget about streaming Netflix films on a satellite connection unless you want to spend some time in FAP jail with your Internet connection slowed to a crawl. And if you're an executive who lives in an upscale exurban property or a small business owner/consultant, forget about using your satellite connection to videoconference with your offices or to exchange large files. The connection isn't sufficiently robust and stable to support it.

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