WorldCom is now truly long distance. . service - New Services - Internet-over-satellite IoS - Brief Article

ISP Business, Dec, 2001 by Jim Wagner

Worldcom is taking to the skies with a two-way Internet-over-satellite (IoS) service geared for business use through Hughes Networks. Officials at the nation's most popular long-distance phone company are taking a chance that businesses will overlook some of the technology's performance issues to see the potential cost advantages of a satellite connection.

WorldCom's very small aperture terminal (VSAT) service connects a user to the Internet by sending data from a hub station to a satellite in geosynchronous orbit around the Earth, which is then "beamed" down to a transceiver on the user's house. VSAT normally handles up to 56 Kbps of bandwidth.

Technicians will not start installing the service until January 1, according to WorldCom officials. The service will be available in 600 Kbps, 800 Kbps or 1 Mbps download speeds, with 128 Kbps upload speeds. Service level agreements reached with Hughes virtually guarantee the 128 Kbps speeds will be maintained, according to Natasha Haubold, WorldCom spokesperson. "Of course, there's always going to be times when you won't see 128 Kbps all the time, but we're pretty confident."

Depending on the area of the country a business is in, a standard T-1 line from the telephone company can cost in the range of $3,000 a month. That price is just for the actual fiber or copper connection in the ground, not the services that make company's intranet run -- a virtual private network (VPN) service can run up to $1,000 a week. Reports show that WorldCom can cut that pricing nearly in half and still clear a profit.

Haubold said pricing will hold somewhere between the price for a business DSL line and getting a T-1 from the phone company. WorldCom, like many carriers, makes arrangements with companies for lower pricing and such dependent on a number of factors (like region), so putting an exact dollar amount is always tricky.

Ralph Montfort, WorldCom director of Internet services, said the service gives businesses another high-speed option that already includes digital subscriber line (DSL) service.

"WorldCom Internet VSAT is the new broadband access solution for businesses of all sizes, offering immediate primary connectivity and business continuity for reliable network back-up services, in any location," Montfort said. "Adding VSAT to our existing DSL and dedicated access offerings gives WorldCom the unique ability to give our customers exactly what they want and need -- individually tailored access solutions based on their business applications, network architecture, geography and budgetary requirements."

Hughes Networks has been testing and selling residential two-way satellite connections for almost a year now, first to Internet service providers (ISPs) who could resell the service and then expanding to residential customers. The service is tied to a customer's satellite TV service (DirecTV) and goes for roughly $60 to $70 a month.

Officials are mum on the numbers, but the price tag coupled with the ready availability of cable and DSL Internet access, points to a glum picture for residential satellite service.

Businesses, however, are more than ready for a low-price alternative to the telephone company, which has been steadily increasing their prices over the past couple years.

Officials promise download speeds of up to 1 Mbps, which is an optimal environment for streaming presentations and the like to a group of remote users. Satellite streaming is actually preferable to land-based broadband, since DSL operates on a point-to-point basis, where streaming by nature is a point-to-multipoint product. WorldCom is also touting the service for video-on-demand, distance learning, interactive TV, data- and multicasting, and similar applications which capitalize on point-to-multipoint communications.

But for critical business applications, the telling point in any high-speed offering is the latency of the network and the upload speed. Satellites hovering in geosynchronous orbit miles above the Earth have inherent latency, up to 250 milliseconds one way. That's 10 times higher than the lag from a fiber optics connection.

Haubold said the latency issue is a moot point since it only really affects a couple of business-type applications that are in demand today. "You're going to see some problems with (telephone) Net conferencing and you probably won't be able to get away with two-way multicasting," she said, "but the download speeds available work wonderfully for things like streaming media."

The true benefit to WorldCom's service is its ability to go anywhere in the US without installing fiber or other lines to the remote site. That's a step up from previous attempts to provide two-way satellite Internet. In the past, users could download from a satellite connection, but were forced to upload using a landline. Now, a remote user installs the proper software, points the satellite dish and they are up and running.

WorldCom and Hughes are relatively alone in the two-way satellite Internet market. Gilat-To-Home Inc., a venture created by Gilat Satellite Networks Ltd., Microsoft Corp., EchoStar Communications Group (of DISH TV fame), and ING Furman Selz Investments Inc., have their own two-way satellite service but have not launched business-class services to date.