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