Dsti/Cdep/Cisp(2016)5/Rev1
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For Official Use DSTI/CDEP/CISP(2016)5/REV1 Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 28-Mar-2017 ___________________________________________________________________________________________ _____________ English - Or. English DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INNOVATION COMMITTEE ON DIGITAL ECONOMY POLICY For Official Use Official For DSTI/CDE P/CISP(2016)5/REV1 Working Party on Communication Infrastructures and Services Policy BROADBAND SATELLITE ACCESS 16-17 May 2017 This report examines developments in the use of satellites and other non-terrestrial technologies providing broadband access. It was presented to the WP-CISP at its meeting in November 2016 at which time the Working Party agreed, following a period for written comments, to forward the document to CDEP with a recommendation for declassification. The revised document takes into account the comments received following the meeting. The Committee is invited to discuss the document and agree to its declassification. Verena Weber : Tel : + 33 1 45 24 87 97 ; [email protected] Lauren Crean : Tel : + 33 1 45 24 19 62; [email protected] English JT03411578 Complete document available on OLIS in its original format - This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of Or. English international frontiers and boundaries and to the name of any territory, city or area. DSTI/CDEP/CISP(2016)5/REV1 TABLE OF CONTENTS BROADBAND SATELLITE ACCESS .......................................................................................................... 3 Executive Summary ..................................................................................................................................... 3 Introduction .................................................................................................................................................. 4 OVERVIEW OF CURRENT BROADBAND SATELLITE SERVICES ...................................................... 6 Pricing and Speed in the Current Satellite Broadband Market .................................................................... 6 Consumer Applications over Satellite ....................................................................................................... 14 Key Trends in Broadband Satellite Systems .............................................................................................. 16 Low (LEO) and Medium Earth Orbit (MEO) Satellite Systems ............................................................ 16 Proposed Broadband LEO Systems ....................................................................................................... 17 Broadband MEO Systems ...................................................................................................................... 19 New Launch Technologies ..................................................................................................................... 20 High-Throughput Satellite (HTS) Systems ............................................................................................ 23 Changing Economics of Broadband Satellite ............................................................................................ 26 Set of Competitive Options to Offer Broadband Service ....................................................................... 26 The last mile - Residential Broadband Network Options ....................................................................... 27 Middle Mile Network Options ............................................................................................................... 30 Role for Satellite ..................................................................................................................................... 31 Developing Policies for Broadband Satellite Systems ............................................................................... 34 Government Subsidies for Broadband Satellite ..................................................................................... 35 Policy and regulatory changes ................................................................................................................ 37 Conclusion ................................................................................................................................................. 40 NOTES .......................................................................................................................................................... 41 REFERENCES .............................................................................................................................................. 43 2 DSTI/CDEP/CISP(2016)5/REV1 BROADBAND SATELLITE ACCESS Executive Summary 1. Satellites serve as an important option to deliver broadband services to residences and small businesses in rural and remote regions throughout the world. In OECD countries, the majority of people live in urban areas or at locations that are closely settled enough to favour other broadband access technologies. Satellite technology, however, now sits on the cusp of deploying several significant innovations that may radically change the costs of providing satellite broadband. The purpose of this report is to describe these key recent developments based upon new and anticipated satellite broadband deployments, and discuss their implications for the future use of satellites to deliver broadband services to residential consumers. In short, the report investigates how innovation is changing the role of satellites in extending broadband services to underserved areas in relation to the other terrestrial fixed and wireless broadband options. 2. Today, most broadband satellite services offered in OECD and partner countries are differentiated by daily and monthly data allowances, and less often by speed as is common on terrestrial networks. Using networks that are shared amongst a large number of users, satellite providers impose strict Fair Use Policy statements to closely manage congestion based upon these usage allowances. Prices of satellite broadband service today reflect wide variation across countries with an average of USD 5.64 Purchasing Power Parity (PPP) per GB at peak times and USD 5.39 PPP per GB when including off-peak times over the selected regions included in this study. The prices per GB were lower for plans with data allowances between 25 GB and 50 GB than for those between 1 GB and 10 GB, reflecting lower per GB rates for higher volumes. While advertised and actual speeds for satellites are increasing, there are still some limitations due to the nature of the technology. 3. Usage-based pricing over limited capacity reduces consumers’ use of streaming video applications, while high latency limits the use of highly interactive real-time applications, as compared to terrestrial broadband networks. Innovations designed to address these limitations of network capacity and network latency are being incorporated into new satellite systems and are described in the report. First, because the height of orbit for the satellite above the Earth’s surface has a significant impact on system cost and types of services delivered, a number of new low earth orbit (LEO) and medium earth orbit (MEO) systems have been proposed or deployed to provide satellite broadband services. The resulting power savings and latency reductions can significantly reduce satellite equipment costs on the user's premises, and allow for a much higher quality of experience associated with real-time services such as multi-player gaming services, Voice over Internet Protocol (VoIP) calls and video chat. Second, while LEO and MEO systems require more satellites to cover a large area given their lower altitude, new technologies such as reusable launch vehicles and electronic propulsion systems are leading to lower cost satellite launch systems. Third, high-throughput satellite (HTS) systems are being launched regularly which use multiple spot beams to significantly increase the throughput of the satellite system. The report describes several new HTS systems that have been recently deployed with substantial capacity to deliver broadband services. 4. Given these innovations, the report examines how the changing economics of broadband satellite services are leading to new roles for satellite in the delivery of residential and “middle mile” broadband 3 DSTI/CDEP/CISP(2016)5/REV1 services. The report identifies three different roles for satellite systems going forward: i) filling the coverage gap to deliver broadband to remote and isolated geographic areas by offering a ubiquitous and easy to deploy solution; ii) providing a middle mile solution connecting mobile and fixed wireless local access networks to nationwide or global core networks; and iii) potentially expanding the coverage gap using LEO satellites to deliver broadband to lower density areas closely adjoining urban areas. If a country has invested in deploying a fibre backbone network that extends widely across most of its geographic area (a common element of many National Broadband Plans), then the cost of a short distance fibre- or microwave-based middle mile solution may be more attractive, which could cause there to be less reliance upon satellite solutions and a diminished role for such solutions in National Broadband Plans. 5. With the potentially changing role of satellite in the provision of broadband service,