There’s something strange going on amid the satellite Internet rush
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As Thursday’s SpaceX launch of two test satellites vividly demonstrated, several companies are moving ahead with ambitious plans to design, build, and fly hardware capable of delivering broadband Internet from space. However, as intense as the battle for broadband may be in orbit, the fight is also heating up on the ground. In particular, there is a controversy quietly simmering at the Federal Communications Commission, or FCC.
In a somewhat bizarre situation, the founder and chairman of one company seeking to deliver broadband services, OneWeb, has founded a second company to compete with himself. In response, other companies proposing satellite constellations have objected, which has added considerable spice to an already heated battle for valuable spectrum.
Greg Wyler
The person at the center of the controversy is Greg Wyler, a colorful American entrepreneur who is among the most well-known people in the satellite Internet industry. More than 15 years ago, his company, Terracom, sought to bring the Internet to Rwanda through a contract to run fiber optic cables across the country. A few years later, after Terracom’s targets to connect schools to the Internet were not met and amid questions about the company’s business practices, Rwanda fined Terracom, and Wyler was out as its leader.
This experience did not deter Wyler nor, apparently, investors. In Africa, he had learned some harsh lessons about Earth-based infrastructure and politics and saw the potential of satellite Internet for rural areas and undeveloped nations. He founded O3b Networks in 2007, which began launching a small constellation of satellites six years later. In April, 2016, the Luxembourg-based communications satellite company SES took a controlling interest in O3b.
By then Wyler had already moved on to start another company dedicated to satellite Internet, WorldVu. For a time it looked like the new company would collaborate with Elon Musk and SpaceX to launch its constellation, but that partnership ultimately did not work out. By 2015, WorldVu had rebranded as OneWeb and began to raise significant capital for its satellite plans. (And SpaceX had gone its own way, intent on building its own satellite Internet constellation).
Through his more than a decade of experience in satellite Internet, Wyler has emerged as one of the most influential figures in the race to build satellites, establish a constellation in low-Earth orbit, and begin to deliver low-cost, low-latency Internet around the planet. In 2017, Fierce Wireless tabbed Wyler as the “most powerful person in telecom.”
Wyler starts another
Today, Wyler is listed as the founder and executive chairman of OneWeb on the company’s site. He retains about 12 percent ownership in the company and remains its public face. However, Wyler has now founded yet another company, SOM1101, that seeks to launch and operate a satellite Internet service. Wyler owns 100 percent of this new company.
The existence of Wyler’s new company came to light after Boeing filed an application in December 2017 to the FCC. Boeing had previously indicated its own interest in building satellites for a constellation, and it was among the companies petitioning the FCC for access to V-band and Ka-band frequencies in the microwave portion of the electromagnetic spectrum. With the new request to the FCC, Boeing sought to transfer its applications for spectrum access to SOM1101.
“The public interest benefits of permitting SOM1101 to substitute as the applicant are significant,” the Boeing petition stated. “Led by Greg Wyler, whose contributions to the satellite industry include the innovative O3b Networks and OneWeb NGSO constellations, SOM1101 is uniquely qualified to hold the requested authorization and bring the proposed services to market quickly and efficiently.”
Opposition
This petition has been met by opposition from other companies seeking to provide satellite Internet service, including O3b, Iridium, Telesat Canada, SpaceX, and others. Their petitions to deny can be read in their entirety on the FCC website here.
The primary objection these companies raised is that, under FCC rules, a party may not apply for more than one satellite system license in a particular frequency band—a prohibition against multiple ownership. In this case, Wyler is seeking to access the Ka- and V-bands both through OneWeb, where he remains executive chairman, and his new company, SOM1101.
In its petition, Boeing had argued that Wyler’s stake in OneWeb didn’t violate the FCC’s multi-ownership rules. The objections to Wyler’s participation in two bids for spectrum were unfounded, Boeing contended, because Wyler did not maintain “de jure” or “de facto” control over OneWeb.
Richard Branson, billionaire, chairman and founder of Virgin Group, is among the key investors in OneWeb.
Matthew Lloyd/Bloomberg via Getty Images
The opponents were not buying this argument about Wyler’s stake in OneWeb. “If the founder, chief executive, board chairman, and a substantial equity holder does not qualify as a party with control over OneWeb, it is hard to imagine who else might,” the Iridium petition, for example, states.
Ars contacted several of the companies involved in this issue. A Boeing spokesman replied, “We are not commenting at this time on any business plans.” Inquiries to OneWeb for a company response, and an interview with Wyler, were simply ignored.
SES, the company that now controls O3b, indicated that it expects the FCC to rule against Boeing and SOM1101. “O3b and others are pointing out that FCC has clear policies for dealing with requests like this Boeing application—policies that aim to minimize speculation and delays in NGSO licensing—and the expectation is that FCC will address this request in line with these policy goals,” SES spokesman Markus Payer told Ars.
What is going on?
There appear to be two possibilities for what is actually happening here. One is that Wyler truly has set up a new company behind the back of OneWeb. Perhaps, as a serial entrepreneur, he seeks to leverage his industry connections to launch and control a fleet of satellites built by Boeing. The second possibility is that this is a pre-meditated effort by OneWeb to gain twice the amount of spectrum as its competitors, which it might do by simply acquiring SOM1101 should a transfer of Boeing’s interests occur.
Sources have told Ars that, generally, Boeing is interested in manufacturing satellites—something it is very good at—but doesn’t have a great interest in operating a constellation of satellites in space. Previously, there was speculation in the industry that Boeing would build satellites for Apple, but that company decided not to pursue such a system. That left Boeing as a builder of satellites without an operator.
It is not clear why Boeing is petitioning the FCC now, before the commission granted licenses for system operation. For example, three companies have now received permission to offer satellite Internet: OneWeb, Space Norway, and Telesat, and SpaceX will likely soon become the fourth. “The timing of this is weird, at such a risky point in time,” one source said. “I don’t understand why Boeing didn’t just wait until they got their license, and they could sell their business.”
Tech
via Ars Technica https://arstechnica.com
February 23, 2018 at 11:14AM