TELECOM Digest OnLine - Sorted: Re: Iridium II: Is Satellite Radio Doomed?

Re: Iridium II: Is Satellite Radio Doomed?

John Levine (
18 Mar 2005 17:05:33 -0000

>> doesn't care if there's 1 or 1 billion receivers.

> Internet multi-casting is the next step. It isn't being used because
> it isn't needed right now. ...

and it never will be used. More below.

>> Actually, long distance rates plummeted more due to regulatory
>> changes and fiber optics than to competition. ...

> Actually, satellites helped cut long distance rates in two ways:
> 1) being cheaper than land (actually under the ocean) lines.

That might have been true at the dawn of the satellite era when cables
were still coax. These days, the TAT-14 cable has more capacity
across the Atlantic than all satellites combined, and that's not even
the fastest cable.

> 2) you mentioned the subsidy factor. Years ago, before deregulation,
> big companies would lease dedicated channels via satellite to
> carry internal phone traffic between widely separated offices
> (e.g. New York to LA). This was cheaper than calling long
> distance during business hours.

Well, sure, it was an arbitrage play since leased lines of any sort,
not just satellite, didn't pay into the access scheme. This has
nothing to do with satellite, and just reinforces my point that the
high price was due to politics, not technology.

> Once internet radio (and especially TV) becomes more than a minor
> traffic blip, and overtakes Bit-Torrent and friends as the number 1
> bandwidth user, multicasting will become more widespread. As for
> being a pain to set up, Windows is a pain to install.

Setting up multicast on a PC is not the problem; you can install a
program and be done with it. The painful part of multicast is that
every router between the program source and each listener has to be
set up to pass on multicast traffic, perhaps with some IP-in-IP
tunnels between areas where multicast works, but the multicast must be
supported on the end user networks or there's no point. If you think
that Comcast and Cox and Road Runner are going to provide multicast
for free to subsidize parasitic competition with their own cable radio
offerings, or Verizon or SBC are going to add anything that will make
it easier for people to compete with the always present chimera of
ADSL video-on-demand, I would like some of whatever you're smoking. I
can see it in WiFi cybercafes, but that'll never be more than a tiny
niche market.

>> I think the real outcome will depend on questions like whether the
>> satellite radio stations are able to bribe car makers to install
>> receivers as standard equipment in cars ...

> etal, "subsidize" cellphones *ONLY FOR CUSTOMERS WHO ENTER A CELLPHONE
> SERVICE CONTRACT*. Subsidizing satellite-radio receivers on *ALL
> CARS* in order to get subscribers from only a small percentage, is not
> an economically viable business plan.

> All it takes is for one car producer to not make it standard, and
> they can undercut their competitors, who won't dare end up looking like
> they're trying to ram it down customers' throats.

I realize that car companies have done stupid things in the past, but
why in the world would they want to provide satellite radios that
don't worj the satellite broadcasters? XM or Sirius or maybe both
would pay car makers to put in receivers that can receive their stuff.
I suppose that in theory GM could try to invent their own proprietary
sat rad network (don't they still own Hughes satellite?) but I don't
see them heading down that rat hole.

It doesn't have to happen to every car right away. I would expect
them to start with high-end brands whose owners would be more likely
to subscribe, and to provide a few months for free to get them used to



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