The Northeastern corner of Arizona is one of the world’s most desolate spots. Endless miles of sand, rock and scrub are interrupted only briefly by sparse human settlements. Broadband access? High-speed links are about as abundant as flowing water in this rugged desert country. Even the telephone infrastructure has remained largely untouched since lines were first strung in the ‘30s and ‘40s. Providing communication support here has been an ongoing challenge. In the absence of plentiful and reliable landline links, the option was a wireless alternative. But the most popular wireless technology-fixed wireless-wasn’t the chosen option. So the only place to look was up.

The choice turned to two-way satellite technology for immediate broadband needs. With landline service providers continuing to focus on urban and suburban customers for T1, DSL, cable and other broadband technologies, satellites provide an attractive alternative for the bandwidth starved. “For rural firms, and even city and suburban businesses, there often isn’t any othe choice,” says Gareth Owen, a senior Gartner analyst. Gartner expects the number of satellite broadband users to swell to 2.4 million people in the U.S. alone by 2004.

Yet, satellite services, despite their growing appeal, are pushing up against some formidable barriers. Combined subscription, equipment and installation costs, for example, remain higher than equivalent landline services. Customers must also deal with a variety of performance-robbing technical issues, including high costs and delayed and obstructed signals. “To say that satellite is the best broadband solution would be misleading,” says Paul Dykewicz, a senior satellite industry analyst with PBI Media, a research and publishing company in Potomac. “But the technology is certainly a lifeline for many organizations that have no alternative.”

Although satellite access services have been available for several years, two-way broadband performance at an affordable price is only a recent development. VSAT systems have been providing data links to businesses for more than a decade, but only large companies with hundreds of remote offices could afford to buy in. Until a few months ago, next generation IP-oriented satellite service providers offered only hybrid satellite-landline services that forced users to rely on snail-paced 56K modems for uplinks. Now, companies are providing true two-way satellite-based broadband services.

Until recently, it wasn’t possible for the statellite companies to compete with terrestrial service providers on performance. That situation is changing as companies use two-way satellite service to connect facilities in distant places, where high-speed terrestrial connections are hard to get. These services range from 128Kbps to 1.544Mbps on the downstream (data flowing to the user) and from 64Kbps to 2565Kbps on the upstream (data flowing from the user). Some companies provide downstream speeds as fast as 500Kbps and upstream rates of up to 150Kbps too. As with cable connections, however, speeds can slow down considerably during evenings and other peak service times.

To the benefit of its many remote users, however, satellite technology can operate under extremely arduous conditions. Northern Arizona University recently added six dishes to the floor of the Grand Canyon for use by members of the Havasupi tribe. These people only have phone service for half the day during the summer because the heat radiating off the canyon wall plays havoc with their (microwave) phone links. But the satellite connections work just fine.

And despite the need to install dish hardware, many satellite customers appreciate the technology’s reasonably straightforward sign-up and installation process. “The procedure is relatively pain free, particularly when compared with the complications and delays involved with DSL,” says Michael Goodman, a senior satellite industry analyst with The Yankee Group, a Boston-based technology research company. Yet, as two-way satellite’s popularity grows, providers are finding themselves swamped with orders, causing some delivery problems.

While satellite technology is often the only way to get broadband to some locations, cost remains a problem. Pegasus, which offers its two-way service through alliances with satellite operators DirecPC and Tachyon, prices its 400Kbps upstream/128Kbps downstream service at $69 per month (The compnay is also planning a faster, costlier service from DirecPC). StarBand’s service also costs $69 per month. But that’s more expensive than either cable or DSL. “One also has to consider the substantial hardware and installation costs, which can range up to several hundred dollars,” says Goodman.

StarBand’s hardware-installation package is priced at $638. A Tachyon installation, which is geared toward small offices rather than individual PCs, costs $4,950, in addition to between $800 and $1,300 per month for the service itself. The sky-high installation price is the result of expensive electronics and a Federal rule that mandates professional installation of two-way satellite systems, because of the technology’s high-power microwave transmitter. “You can’t just hang a two-way dish in your backyard like a TV dish,” says Jeremy Guralnick, vice president of product management for San Diego-based Tachyon.

Latency is another important issue. Since satellites orbit at 22,300 miles, a signal needs anywhere from one-half to three-quarters of a second to complete the earth-satellite-earth round-trip. That’s not a big problem when swapping e-mail, transferring files or casually surfing the web. But latency pretty much rules out two-way broadband applications such as telephone calls and videoconferencing. “Users find the voice delay confusing and intolerable,” says Goodman.

Satellite technology is also vulnerable to rain-fade - an atmospheric phenomenon that blocks signals during downpours. Rain-fade isn’t a big problem is moisture challenged places. But in places where cloudbursts occur almost daily at certain ties of the year, satellite users can expect occasional service interruptions that range from a few minutes to half-an-hour or more.
Two-way satellite services use a dish that’s slightly larger than the models used by satellite TV receivers. While mounting a dish on a roof or wall usually isn’t a problem, tall buildings or trees can make it difficult - occasionally impossible - to find a clear signal path. Yet satellite technology can also be surprisingly accommodating. Nothing blocks the signals.

Despite the spread of DSL, cable modems and other broadband technologies, satellite supporters feel that their technology will always be able to compete effectively with landline connections, just as satellite TV broadcasters now contend against cable companies. “The answer will be to offer a high quality service at a competitive price,” says Blair Gilbert, product development manager at Pegasus Communications. “As long as people live or work in remote locations, or desire an alternative-to-terrestrial connection, there will be a market for satellite services.” Still other observers aren’t so sure, claiming that two-way satellite service’s future hinges on how long it takes phone and cable companies to bring broadband pipes to offices and homes.