Lighting Up the Sky The Future of Satellite Communications
by Harry C. Stonecipher, President and Chief Operating Officer, The Boeing Company,
Satellite 2001 , conference, Washington D.C. Convention Center, March 29,
Thanks, Jim. After a stirring introduction like that, I really
feel that some sort of disclaimer is in order before I even attempt to convey
my view of the future in satellite communications.
With that in mind, I
will tell you a story about one of the real heroes of science, James Clark Maxwell,
the greatest theoretical physicist of the nineteenth century. This is a story
with a touch of stardust and romance.
Using equations determined by simple
laboratory experiments with electric and magnetic fields, Maxwell was able to
calculate the speed of light which had been previously determined through various
means of measurement. In doing so, Maxwell apprehended the nature of light. He
realized that light consists of electromagnetic waves within a particular frequency
range. Such waves activate electrical antennae in the retina of the eye, with
the lower frequency waves appearing as red and the higher frequency waves as violet.
To this day, we are indebted to Maxwell for his explanations of the phenomena
of light and accompanying optical properties.
On the evening of his great
discovery, Maxwell took a stroll in the garden. A young woman was with him and,
when she remarked at the beauty and wonder of the stars, Maxwell told her that
she was walking with the only person in the world who knew what starlight really
was. And so, amazingly enough, he was! We must assume that she believed him,
for the woman became his wife.
Unlike Maxwell, I do not have a brilliant
blinding insight to impart to this world, or this audience. I would be taking
you down a different sort of garden path if I pretended I did. What insights
and observations I have to share with you are those of a businessman with a reputation
for being a tough, results-oriented son-of-a-gun. And maybe that is the right
approach at this juncture.
When I think of our technology-blessed but, all
too often, bottom line-challenged industry, theres another story that comes to
mind. It is of a less exalted nature. It comes not from the gold-embossed pages
of high science, but from the spools of celluloid that define popular culture
Many of you, Im sure, remember the scene in Raiders of the Lost
Ark where Indiana Jones is confronted with a technically advanced member of the
saber-twirling class. This bearded marvel puts on an awesome display of swordsmanship.
It is preliminary to the main event, and it is aimed at impressing everyone in
the vicinity. However, before he can strike a blow, Indiana Jones, quick to
adapt in any situation, pulls out a simple pistol and shoots him dead.
you twirl sabers or satellites, the moral of this story is that those who live
by the sword will be shot by those who dont. And that, it seems to me, is what
happened to some of the companies that have failed or run into deep trouble in
offering satellite-for-phone services. As a result of being overly enamored with
their own handiwork, they didnt pay attention to what the other guy might do
. . . with a simple little device like this (pull a cell phone out of your
pocket and hold up it for all to see). Nor did they pay enough attention
to what the customer or consumer really wanted.
Viewed from a business perspective,
satellite communications is just one of several possible ways of transmitting
voice, data and images over long distances. No one who pays for the service really
cares how it works . . . only that it does work . . . meaning it is cheap, instantaneous,
and clear as a bell.
Once upon a time, satellite communications had every
advantage. Unlike most of you, I can remember what trans-Atlantic telephone conversations
were like in the pre-satellite era. Not only was it very expensive, but there
was lots of static on the line and the transmission wasnt quite instantaneous
either. You would speak into the phone like this, then hold it away from your
ear for a moment, while you waited for your words to carry not optically, but
electrically across the ocean.
Then along came the first communications
satellite in 1965. James Maxwell, who understood light, also understood that
all forms of electromagnetic radiation not just visible light, but radio waves,
microwaves, even X rays propagate at a speed of 186,000 miles per second, or
the speed of light. He would have instantly appreciated the advantage of using
satellites to relay radio signals at light speed from one place on earth to another.
For 20 years or more, satellites enjoyed a huge advantage over cable in
performance-for-cost in carrying messages over long distances. As one of NASAs
historians recounts, and I quote, In 1965, when EARLY BIRD was launched, the
satellite provided almost ten times the capacity of submarine telephone cables
for almost one tenth the cost. This cost-differential was maintained until the
laying of TAT-8 (the first trans-Atlantic fiber-optic cable) in the late 1980s.
Well, you have probably heard the ancient curse, Whom the gods would destroy,
they first reward with 20 years of success. With the coming of optical cable a
dozen or so years ago, satellites share of total telephone traffic between the
United States and Europe has gone from 60% or more to just 5%. Except for remote
areas, it became cheaper to route calls across the Atlantic by cable rather than
If you think of light as encompassing all forms of electromagnetic
radiation (some inside and some outside the frequency range of the human eye),
what TAT-8 did was to end satellites monopoly over the power of light for long-distance
communications. Suddenly, it was possible to transmit voice, data and images
across the oceans by reflecting light through very fine glass fibers. Like the
Greek god who offended his fellow Olympians by delivering the gift of fire to
man, fiber optic technology delivered the gift of light to the cable layers .
. . and the ditch diggers. It gave them light in a pipe.
At the same time,
microwave towers and relay stations have provided another powerful and cost-effective
means of harnessing the power of light in point-to-point, terrestrial communications.
Of course, microwaves have been a critical factor in explosive growth of cellular
So what competitive advantage, if any, still resides with satellites,
after the tens of billions of dollars that have been spent on other delivery systems
that also utilize the power of light? Satellites have only one competitive advantage
that I can see, but it is an extremely important one. And it will only become
more important in the years ahead.
Satellites provide not just two-way communications
capabilities, but a true birds eye view of a large part of the earths surface.
As a result, satellites can be used for point-to-multi-point communications, with
minimal infrastructure cost compared with cable systems and no difficulty in traversing
the infamous last mile. Without having to cut a ditch, you can beam TV programs,
music or other communications direct to any number of fixed sites on the ground.
Still further, because of having a birds eye view, satellites offer a great way
to reach mobile platforms both on the ground and in the air.
may have lost the opening battle to land-based, cellular systems, that could change
as the telephone itself changes and becomes more multi-functional. Meanwhile,
satellites are doing more than just holding their own in other parts of the marketplace
in communication services. Satellite television, for instance, is on a roll
gaining market share at the expense of cable TV thanks mainly to recent advances
in high-powered satellites and digital compression. We have also made some progress
in reducing cost to orbit. Without a doubt, however, our commercial and our military
customers expect a whole lot more progress in this area, and we have to make sure
they are not disappointed.
Since launching its first satellite in 1993,
DIRECTV, the nations leading digital satellite television service, has signed
up more than eight million customers. DIRECTV started out serving people in rural
areas, but now it is capturing more and more business in areas served by cable
TV. It is not hard to pinpoint the reasons for DIRECTVs success. It gives subscribers
more choices than analog cable systems offering 210 channels to just 90 for
most cable operators. In addition, it provides a clearer picture and sharper sound.
And its relatively cheap as well, costing $32 per month for a typical subscription
package, or about the same as the basic analog cable package. As a business formula,
the ability to offer more value for the money is pretty hard to beat.
now we are seeing a whole flood of new satellite broadband services that could
not only duplicate, but far surpass the success of satellite television. These
include digital radio by satellite, digital first-run movie delivery by satellite,
and high-speed on-line Internet connection via satellite not just to the home
and office, but to airplanes, cars and other moving platforms.
All of that
makes this an exciting time for Jim Albaughs operation. In one way or another,
Boeing Space and Communications has a hand in all of those ventures. We are being
stretched in the best possible way. We are learning a lot, and we are discovering
all kinds of new friends, customers and partners. In this fast-changing field,
what really counts the most is how smart and cost-effective you are in networking
in a human or business sense, even more than in a technical sense. As Phil Condit,
who is my boss, likes to say, None of us is as smart as all of us.
than two weeks ago, a Sea Launch Zenit-3SL rocket successfully lifted off from
a floating launch platform on the Equator and placed a digital audio satellite
into Geosynchronous Transfer Orbit. Named Rock, this Boeing-built satellite
is the most powerful commercial satellite up there with 18 kilowatts of total
power at the beginning of its 15-year life in orbit.
Rock has a partner,
named Roll. Sea Launch, which is 40% owned by Boeing, is set to launch that
satellite in early May. With the two, XM Satellite Radio is creating and packaging
up to 100 channels of digital radio, including music, news, sports, talk, comedy
and childrens programming. The pair of satellites Rock and Roll will
transmit directly to vehicles, homes and offices coast to coast. This will be
radio of a quality in choice of programs, clarity of sound and freedom from
unwanted commercials that a lot of people are going to love.
of Sea Launch is, of course, the advantage that comes from being able to launch
from the Equator, which allows a rocket to lift heavier payload into high orbit
at point above the earth where communications satellites have maximum exposure
to the earths surface. DIRECTV was Sea Launchs first commercial launch customer,
and we used a proven Russian and Ukrainian rocket system to launch that and five
subsequent payloads. Going back a few years to the Cold War whod have thought
that Boeing would be collaborating with the Russians in beaming rock music and
popular television to millions of people?
We are rubbing elbows with the
entertainment world in other ways as well. A satellites inherent capability
to deliver point-to-multi-point information allows it to send one movie to thousands
of theatres in a matters of hours at a fraction of traditional cost. Whats more,
with digital transmission, there is no deterioration in quality no matter how
many times a film is shown. The last screening is a good as the first. Along
with Miramax Films and AMC Theatres, we demonstrated how that works last November.
Just a few weeks ago, we had a feature film premiere at a Disney theme park that
was digitally transmitted and projected. Thats the first time thats ever happened,
but it wont be the last.
I think that we are all going to find that satellites
. . . and the Internet . . . were made for one another. The phone and cable companies
are having trouble keeping up with the demand for high-speed Internet services.
This really opens the door for satellites.
Just a few months ago, HUGHES
Electronics DIRECTVs parent announced the launch of a new high-speed, two-way,
online service called DirecPC. Users download data on a pizza-sized dish that
can also handle DIRECTV. This could be a very exciting development. Like DIRECTV,
DirecPC is aiming to deliver a better product that is to say, faster, more reliable,
always-on Internet service at the same price as DSL or cable. And it will be
able to offer a bundle of services telephone, television, radio and Internet.
cannot pass up the opportunity to put in a quick plug for Connexion by Boeing.
Through this service, initially targeted for commercial airplane flights of more
than an hours duration, you will soon be able to log on to a new two-way broadband
Internet connection from your airplane seat. You will be able to surf the Web,
send and receive e-mail, watch live TV, trade stock, and access your companys
Intranet, all while speeding along at close to the speed of sound. This service
will turn the airplane into an extension of your home or office. You might even
experience the sensation of arriving too soon obliged to abandon your workstation.
know some people have expressed skepticism about the breadth or depth of this
market. Let me just say a word about how we see it. We foresee $5 billion a
year or more in potential revenues in about ten-years time, based on a capture
rate of 30% of people flying for more than one hour in airplanes of more than
100 seats. We think people will be willing to pay $10 or so per hour in order
to be truly connected and productive while in flight.
Just about everything
I have said about the satellites advantage in having a birds eye view is doubly
true for military customers. No less an authority than Ronald R. Fogleman, the
former Air Force Chief of Staff, predicts that by 2020, directed energy weapons
in space will be the centerpiece of the US military arsenal. Certainly, satellites
are literally at the apex of any kind of System-of-Systems approach to defense
and deployment. They are the key to giving our warfighters not just air superiority,
but information dominance.
In closing, we can acknowledge that the satellite
industry has experienced a few setbacks in the last couple of years. But there
is no reason at all to be pessimistic. Where we have gotten into trouble, it
has been because of errors in business judgement. If I may say so, the rocket
boys (and girls) are not about to lose to the ditch diggers.
Just as the
earth is surrounded by space, we are surrounded by opportunity. We may no longer
hold a monopoly on the power of light to provide long-distance communications.
But we have the next best thing. We are the potential master of a large part of
all that we observe. Unless I am very mistaken, satellites are going to be lighting
up the sky and driving the future of communications for a long, long time