Plan to lauanch 840 satellites, for internet

Plan would launch 840 satellites, bring Internet to the world

KIRKLAND, Wash. (Mar 16, 1997 12:19 p.m. EST) -- Beginning in 2000, rockets
all over the world will begin carrying
Volkswagen-sized satellites about 435 miles above the earth. Over the course
of two years, 840 of them will be gently
dropped into place, fanning out to form a constellation that covers the

No government planned this venture. At a final price tag of $9 billion, it's
unlikely any would. Instead, two of the world's
richest and smartest men have put their personal fortunes behind a long-shot
proposition -- bringing fast Internet access to the
entire world.

The company is called Teledesic Corp., and its two primary investors are
Bill Gates of Microsoft and Craig McCaw, who
vaulted to near the top of the most-money list in 1994 when he sold McCaw
Cellular Communications to AT&T for a cool
$11.5 billion.

It would take more than a crystal ball to know whether the venture will
truly let high schools in Africa roam the Net and
businesses in Tibet flourish come the millennium. At this point, it's
unclear whether the technology will even work. But if it
does, Gates and McCaw will own a piece of the future.

The idea behind Teledesic is simple. Although big cities in North America
and Europe are wired for fast, heavy-data traffic,
most of the world isn't -- and the cost of digging up Asia and Africa to lay
millions of miles of wire would be absurd. But
there's another way: Using satellites, messages can simply bounce up into
space and then back down to receivers.

Until recently, the only satellites that got much commercial use were for
weather and television. They all are geostationary,
which means they're very high up and stay over the same, large area, so it
doesn't take many to blanket the globe.

That was a good thing when the technology was hideously expensive; a big
communications satellite easily can cost $100
million. But with the commercialization of space programs worldwide and the
beginnings of mass-produced satellites, the
technology now is merely wildly expensive.

That's why Teledesic can afford to ship more than 800 of the things up into
space, at the bargain-basement price of only $5.2
million each.

Why so many? Like almost everything to do with this market, it's a question
of physics -- in this case, the pesky problem of
the speed of light.

Put a geostationary satellite high enough and it takes only one to beam
television to all of Asia. The signal takes half a second
to bounce up to a satellite and then find its way back down to Earth, but
that's fine. A half-second delay works for a
television signal because it's continuous and the viewer doesn't know or
care when the original picture was sent.

But on the Internet, it's a nightmare. That's because the basic building
block for the Net is something called TCP-IP, or
Transmission Control Protocol-Internet Protocol. It's the set of standards
that lets any Internet message be read by any

The Net works so well precisely because of the TCP, or control, part. As a
message is sent, each bit of information is
checked to make sure it got to where it was going.

Pulling up a page on the World Wide Web means thousands of messages sent
back and forth, with the computers having a
conversation something like "I just sent 15 bytes of data. Did you get
them?" "Yeah, I got them," over and over.

It works when the connection is fast. It falls apart, however, with a
half-second delay between those checkbacks, which is
why the Teledesic satellites have to be so close to the ground.

Geostationary satellites orbit at 22,300 miles up. At 430 miles up, which is
called a low-Earth-orbit, Teledesic's birds won't
have to worry about the time delay, which means they can provide really fast
Internet connections to people from Addis
Ababa to Anhui.

To get the service, users will buy or rent antennas about the size of a
pizza dish and signal decoders that plug into their
computers or telephones. With that setup, they'll be able to do high-speed
data transfers like video-conferencing from
anywhere in the world.

The folks putting up these satellites don't pretend it's solely a
humanitarian effort: They want to make money.

But by a nice coincidence, the basic physics of the universe dictate that if
you set out to provide low-earth-orbital satellite
links to places where there are lots of rich people, you end up making it
available to everyone.

"If we give it to Madrid, we have to give it to Africa. And in Antarctica,
the penguins will be well-served," said Russell
Daggatt, Teledesic's president.

Teledesic isn't the only company to see the possibilities brought on by
cheaper satellites. An astounding 1,700 or so are
expected to be launched in the next decade.

"They're sending up more in the next 10 years than they have in the whole
history of the satellite industry," said Wen Liao, a
senior analyst with Jupiter Communications in New York.

Most are for the global cellular phone and paging markets, and for all these
companies -- Teledesic most certainly not
excluded -- several huge issues loom down the road.

First, rocket launches themselves are dicey things. Iridium is now behind
schedule, for example, because one of Cape
Canaveral's Delta rockets blew up last month trying to launch a biomedical

Second, the ventures are enormously expensive and, in an era when Wall
Street wants returns this quarter, building
infrastructures that can take years is a hard sell.

And finally, no one's really sure the technology to get all those satellites
operating in perfect synchronization will work.

"It's insanely expensive, it's insanely risky, it's insanely unmanageable"
in the words of Robert Egan, research director for
satellite technology at the Gartner Group in Stamford, Conn.

Which might make it a good gamble after all. Thus far, no one has made a
grab for Teledesic's Internet market, though the
company doesn't expect it will remain untouched.

And with the deep pockets of McCaw and Gates, vision might count for more
than instant return on investment. Who else is
willing to bet that kind of money?

"This final issue is: Is there a need, given what we know about the
Internet? Today, the answer is no," Egan said. "But how
the Internet evolves, that's key. It might end up being yes."