Fixed Wireless Business

Real Rural Broadband

If there's absolutely no other broadband option in your area besides satellite, ISAT Platform wants to be your partner.

by Alex Goldman ISP-Planet Managing Editor [March 18, 2004]

Mario Pino says that just because you cannot afford to build the likes of DIRECWAY, that doesn't mean you cannot afford to offer satellite broadband. Altamonte Springs, Fla.-based ISAT Platform, where Pino is founder and president, offers satellite broadband wholesale to ISPs.

The company is reselling satellites owned by SES-GLOBAL, which bought the satellites of GE America and renamed them SES-AMERICOM. SES-AMERICOM owns 19.9 percent of ISAT.

Pino says SES-GLOBAL's most advanced technology is deployed in Europe, where 93 million people receive video or Internet from the company's SES ASTRA system.

The U.S. network is not advanced, but it's relatively cheap. In fact, there's a key difference between ISAT's product and that of DIRECWAY: ISAT is one-way, and DIRECWAY is two-way.

To an ISP, however, Pino argues, one-way is better. A subscriber to one-way satellite broadband still needs a dialup connection, for uploading only. ISPs should also like the fact that their customers will still need them to provide dialup even after they've got broadband.

The subscriber gets the download speed of broadband (400 Kbps to 800 Kbps, with faster speeds expected later this year), but not the upload speed.

On the other hand, satellite has latency, and since most end users only upload small amounts of data, such as HTTP requests or e-mails, a low latency, low bandwidth upload might be better than a high latency, high bandwidth upload. Furthermore, this is a system that rewards normal ISP use but effectively prohibits bandwidth hogs from using latency-sensitive applications.

StarBand
But a more compelling argument is that two-way providers other than DIRECWAY are out of business.

We reach former Starband wholesaler Steve Klock, CEO of US Online. Working with Starband, he says, was not a pleasant experience.

"We spent two years negotiating an exclusive agreement with them," says Klock "Two weeks later, their TOS changed, and within a year they were contacting our customers."

StarBand eventually went bankrupt. Klock is interested in the ISAT Platform product but has not signed up for it. No longer in the wholesale business, his company focuses on portal development. "We're more profitable now than we ever were," he says.

ISAT wants you
ISAT Platform's smaller ambitions may therefore be comforting to prospective ISP partners. On its website, ISAT Platform says its target market consists of 3 million rural households that want access to broadband but cannot get it, out of a population of about 27 million rural households that have no broadband option.

Those 3 million households constitute a significant market, large enough to build a business on. But the number also suggests a business that will listen to small ISPs, and be willing to work with them.

The company calls its wholesale product SatXpress (it also has a product for cable operators called CableXpress). The SatXpress product is sold to ISPs wholesale at $28 per user per month, with an expected retail price of $49.95. The ISP must also pay setup fees that are in the range of $995 to $5,000.

Pino says the company also offers a 30 day test with a 100 percent money back guarantee, because a few ISPs simply cannot operate the system. "We've had four or five cancellations from 400 or 500 ISPs," he says.

ISPs that stay with the program can expect to convert up to 10 percent of their user base in the first year, Pino notes.

Part of the barrier is the cost of CPE, but CPE costs are going down. SatXpress CPE costs $159 per unit for USB kits and $99 per unit for PCI kits, with volume discounts available.

The dishes the company uses are bigger than the "pizza dishes" used by the satellite TV services. "We went with a 28 inch dish," says Pino. The larger dish is more reliable, he says.

USA Daily
Joe Sansone, president and founder of USA Daily, is a satisfied customer. He's focusing on building a news portal, and sees the ISP side of his business as ancillary. The idea is to have no churn by having customers who use both the portal and the access. He's pleased to leave the technical details to ISAT.

SatXpress offers him access to nationwide wholesale dialup plus satellite broadband. USA Daily sells satellite broadband starting at $49.95 per month, with equipment fees of $149.95 for the PCI unit or $249.95 for the USB unit, plus a $150 install fee, a $20 activation fee, and a variable shipping fee. The company maintains a Satellite FAQ page containing more information.

Sansone says that the company is working on perfecting its install process. "We've been working with ISAT Platform for under a year, since June, and we've been going slow. Logistically, it's tough to do installations covering the whole country. We're struggling to keep up logistically."

He's happy with the service, though. "They're doing product development. Nothing's perfect, but it works for us. They're providing the train tracks and we can drive the train as fast as we want to."

—End