04.13.20

Solving real problems doesn’t mean bailing out fake business plans

Posted in LightSquared, Operators, Regulatory, Services, Spectrum at 1:41 pm by timfarrar

No I’m not talking about SpaceX and the RDOF auction, I’m returning to a topic I haven’t written about for years (but also provided plenty of opportunities for pointing out the idiocy of some billionaires), that of Ligado.

Over the last year there’s been a great deal of dysfunction at the NTIA, leading to the unfortunate loss of David Redl and what Oscar Wilde might have described as the “careless” loss of Diane Rinaldo. These problems were amply summed up in Redl’s speech a few days before he resigned, where he noted that:

“In this era of competition for spectrum resources, it can be easy to think that we’re in a winner-take-all battle, but that mindset asks us to make false choices that will shortchange America. For example, we don’t have to choose between making more spectrum available for the private sector and sustaining our critical government systems. We also don’t have to choose between terrestrial 5G and satellite services.”

Although it is not the only area where these problems have been manifested (and the fight over the 24GHz spectrum auction was far more important), Ligado has employed its usual lobbying tactics of attempting to secure high level political backing (just like in 2010-11), apparently getting former acting Chief of Staff Mulvaney to push the FCC into drafting an order to approve Ligado’s application last fall (which is why Defense Secretary Esper’s November 18 letter to Chairman Pai was specifically copied to him) and more recently even persuading Attorney General Barr to make the bizarre proposal that Ligado’s L-band spectrum could be used in conjunction with C-band as part of a plan to counter China, which would involve the “United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake” in these companies.

Of course this latest business plan is just as much nonsense as the previous business plans presented by Ligado and its predecessor companies in their attempts to persuade the FCC to grant them a license, because other countries are deploying TDD networks in their C-band spectrum for the entirely logically reason that it maximizes the performance of MIMO, and are never going to approve use of L-band uplinks in satellite spectrum in any case. Why would US telcos decide to do anything other than follow suit?

But Ligado’s management has the singular objective of securing regulatory approval and keeping their jobs, rather than actually developing something that would be economically valuable, just like their prior business plans to provide a dual mode satellite-terrestrial network for utilities (despite seamless roaming from terrestrial to satellite mode being impossible), promise rural LTE service using satellite capacity that cost $10,000 per Gbyte, or meet the supposedly “vast global demand” for dual mode satellite phones that turned out to amount to fewer than 2000 phones when Terrestar tried to sell them.

So let’s take a step back. What is the problem we are trying to solve here? Is this really about whether Ligado gets a worthless approval that does nothing to benefit 5G one way or the other? Or is it really what Commissioner O’Rielly’s letter last week asked the President to do, to make sure that the DoD (and other agencies) do not simply get to veto any reallocation of spectrum within IRAC, and instead the NTIA works to properly balance competing spectrum interests, as Redl said last year?

Ligado’s current proposal, that the FCC simply ignore the NTIA’s public recommendation (which was set out even more forcefully in another letter from Associate Administrator Doug Kinkoph last Friday) and “bring an end to…this proceeding“, would make things worse not better. If the NTIA has stated on the record that “We believe that the Commission cannot reasonably reach such a conclusion [that the harmful interference concerns have been resolved]” then the next step is to set up a process to resolve them, not to simply reject this conclusion. Both sides have behaved badly here, Ligado in claiming that there is no harm whatsoever (when some older high precision devices and perhaps even some DoD systems certainly do need to be replaced) and the DoT in claiming that a 200MHz wide swath of spectrum should remain completely unoccupied in order to protect GPS. The US needs an NTIA that works, not an NTIA that is to simply be ignored.

Moreover the idea that the FCC would rush something like this out on delegated authority (which is basically what was being implied by news reports last Friday that an order could come later that day) would repeat the mistakes of LightSquared’s January 2011 approval, which was also approved by the International Bureau on delegated authority, in a ruling which former (Republican) Commissioner Harold Furchtgott-Roth noted “was an unprecedented and surprising development. That they would make this decision at the bureau level and not at the full commission level is just stunning”.

04.05.20

SpaceX and the FCC’s $16B problem

Posted in Broadband, Financials, Operators, Regulatory, Services, SpaceX at 11:41 am by timfarrar

Eight and a half years ago, I wrote a blog post that got a lot of attention inside the FCC, comparing LightSquared’s request for a license that would give it a $10B windfall to the relatively small beer of the $535M Solyndra loan scandal. Despite knowing that LightSquared’s promise of an integrated satellite-terrestrial network was nonsense (not least because LightSquared had already told the FCC in November 2010 that the wholesale cost of its satellite data would be $10 per Mbyte), the FCC and White House offered strong backing for LightSquared right up until summer 2011 when political pressures became too great and their support was withdrawn.

Now it appears that the FCC’s LightSquared debacle could be exceeded by an even greater debacle in the satellite sector, because SpaceX is seeking to participate in the upcoming Rural Digital Opportunity Fund auction later this year, which will offer up to $16B of funding over 10 years to service providers that commit to offer voice and broadband services to fixed locations in eligible unserved high-cost census blocks. While the Wall St Journal highlighted competitors’ complaints a few weeks ago, SpaceX has now upped its demands even further, suggesting in a March 27 letter to the FCC that “the laws of physics” dictate that SpaceX should be allowed to bid in the highest performance tiers (which carry the most money per potential customer) because “far from [being] untested or hypothetical, SpaceX has already launched over 360 satellites and demonstrated that its network is capable of offering high-speed, low-latency service”.

That of course is complete nonsense, because the laws of physics aren’t the only factor determining the latency of a LEO constellation, especially one that is (or apparently was in SpaceX’s case) supposed to have onboard processing and crosslinks. For example, Iridium’s latency on voice calls is not actually much better than a GEO satellite network and certainly exceeds “the Commission’s 100-millisecond threshold for low-latency services” (this paper estimated it at “between 270-390 milliseconds”). In fact one should regard claims of extremely low (and improved) latency for Starlink’s current satellites as indicating that in reality some of the most important design features, such as onboard processing, have likely been discarded.

To date SpaceX has certainly not demonstrated anything whatsoever about the performance of its planned commercial voice and broadband services for consumers. Notably SpaceX has still not published details of its terminals (except to advise that the antennas will need mechanical steering, raising the cost significantly), and last year’s testing by the US Air Force onboard a plane did not even use a SpaceX antenna. Moreover, that test did not involve most of the operational elements needed to offer a scalable commercial service, such as provisioning and sharing of capacity between multiple users, because SpaceX simply dedicated an entire satellite to one user terminal.

In particular, SpaceX makes great sounding (but carefully worded) claims in its submission to the FCC that “SpaceX also specifically designed Starlink to provide high-speed broadband service, using advanced phased-array antennas that allow the system to automatically optimize service to certain locations and dynamically adjust its throughput per user” when in fact many features of the supposed “design” have not actually been implemented in practice. While some of those discarded design features, such as crosslinks, are well known, I’m told that to date the satellites also don’t have any ability to dynamically reallocate capacity between beams, because that was apparently “too hard”. Perhaps that’s not surprising, when SpaceX is writing the software itself, rather than looking to companies with actual experience in designing scalable satellite broadband networks, like Hughes and Viasat.

But what is truly outrageous in SpaceX’s submission is the suggestion that the FCC should now let SpaceX participate in an auction to win $16B of ratepayers’ money without ever providing service to a single consumer, because SpaceX has now pushed back the launch date until after the FCC’s planned October 2020 auction date. The latest letter states simply that (even if you are foolish enough to take Elon Musk’s ever-optimistic timelines at face value) “SpaceX will now begin to offer its Starlink broadband service for consumers—first in the United States and Canada—by the end of 2020″. Of course now that Starlink’s primary competitor, OneWeb, has gone into bankruptcy, the urgency of pushing Starlink forward as quickly as possible has diminished (not to mention SpaceX being short of money itself), and why would SpaceX now want to risk consumers experiencing a service that in the early days may not work very well, if at all, before the FCC auction takes place?

But as I pointed out a couple of weeks ago, bidders are not required to actually provide service to any specific number of customers at all in order to receive the RDOF funding, and instead are simply expected to use the funding to subsidize their buildout and make it available. So SpaceX could then take the FCC’s money, never provide service to a single customer that the money was meant to help, and reallocate its capacity to serve other users like the DoD anywhere within the country or even the rest of the world.

Perhaps the FCC and Congress, like the rest of us, are pre-occupied with the coronavirus, and think this issue should not be at the forefront of our concerns right now. But when Elon Musk has convinced many gullible people that Starlink will “catalyze enormous positive change, bringing, for the first time, billions of humans into our future global cybernetic collective” and so it would be “stupid to put one more federal dime into rural broadband when Starlink could solve the whole problem by later this year” it remains possible that SpaceX will be able to get away with this nonsense and walk away with billions of dollars of funding that were intended to help close the homework gap while we are all distracted.