IE 11 is not supported. For an optimal experience visit our site on another browser.

SpaceX, Google and Virgin Revive Buzz Over Satellite Internet

The multibillion-dollar buzz over building hundreds of satellites to provide Internet access from space marks the revival of a decades-old dream.
Get more newsLiveon

SEATTLE — SpaceX founder Elon Musk says he'll spend billions of dollars to make the Internet available via a constellation of 4,000 satellites — and use the revenue to build a city on Mars. Google is kicking in close to a billion dollars to support Musk's plan. And the Virgin Group's Richard Branson is joining in another multibillion-dollar venture to provide Internet access from space.

All this buzz marks the revival of a decades-old data dream — but maybe it's a dream whose time has finally come.

"We're at the point now with the technology —and with the costs coming down and the market maturing, driven by mobile devices, the need is there. It's just a case of what the business model looks like," said Christopher Baugh, president and founder of NSR, a satellite industry consulting firm. "In the 20 years I've been following this, I've not seen the buzz like it is now."

Twenty years is about how long it's been since the buzz over satellite Internet access was nearly as widespread. Back in the 1990s, ventures such as Teledesic, Iridium, Globalstar, Celestri and SkyBridge aimed to build huge satellite constellations to beam Internet and voice data from the sky. Of those five companies, only Iridium and Globalstar are still in business today, with scaled-back ambitions.

Few visions were as ambitious as Teledesic's was in 1994, when Bill Gates, Craig McCaw and other industry heavyweights backed a $9 billion plan to put up to 840 data-swapping satellites in low Earth orbit, or LEO. Only one satellite was ever launched, and the venture flopped before it really got started.

Musk referred to the Teledesic experience last week when he announced the launch of a Seattle-based operation to put 4,000 Internet-beaming satellites into LEO over the next 15 years or so.

"One of the mistakes that Teledesic made was not assuming that terrestrial networks would get much better over time," Musk said during a Seattle Center reception, according to a transcript of the talk. "So we need to make sure that the system we design is good, even taking into account significant improvements in the terrestrial systems."

Musk said a "useful version one" of the project could be put into place in five years, with a second and third version rolled out over five-year intervals.

Two competing systems?

The venture backed by Branson, known as OneWeb, is also aiming for a quick start and gradual build-out. OneWeb's founder, Greg Wyler, is said to have spoken with Musk about joining in his company's effort to build a 648-satellite LEO constellation — and make Internet connectivity available to the half of the world's population (or more) that doesn't currently have it.

In an interview with Bloomberg BusinessWeek, Musk signaled that he's going his own way. "We want a satellite that is an order of magnitude more sophisticated than what Greg wants," Musk said. "I think there should be two competing systems."

Branson, however, doesn't think that's the final word. "If Elon wants to get into this area, the logical thing for him would be to tie up with us, and if I were a betting man, I would say the chances of us working together rather than separately would be much higher," he told Bloomberg.

OneWeb has an edge over SpaceX in at least one respect: The venture already has a license from the International Telecommunications Union to set up a satellite network and broadcast signals. "That’s a significant advantage, having that regulatory barrier crossed already," NSR's Baugh said.

Wyler estimated that it would take about $2 billion and four years to get OneWeb's constellation up and running. Branson's Virgin Group (which includes Virgin Mobile as well as Virgin Galactic) and Qualcomm (which sells wireless communication products and services) are the first big investors in OneWeb, but more are being sought.

Where Google fits in

Google is shaping up as a key player in the satellite industry maneuvers: For months, the search-engine juggernaut has been rumored to be investigating investment opportunities — with Wyler as well as with Branson.

The rumors came to a head on Tuesday when SpaceX confirmed that Google and Fidelity were investing $1 billion for a nearly 10 percent stake in the rocket company. The San Jose Mercury News said Google's share came to 7.5 percent, which translates to more than $750 million.

Why are so many big corporate names getting involved? Because there's a big market to be served, and big money to be made, Baugh told NBC News.

"The problem with satellite technology on the user side has always been the cost," he said. "The volume has never been high enough to drive the cost down. We're at the point now with the technology that if a big order is placed, the price will come down."

If SpaceX can create an all-encompassing, low-cost SatNet for global communications, it could trump terrestrial networks, particularly in the developing world's fast-growing but hard-to-wire markets. And Google could benefit from having billions more people in its online marketplace.

"Certainly Google's M.O. is to have ad clicks and access to users," Baugh said.

Facebook and Google already have been laying plans to serve that under-wired market with drone-based and balloon-based data networks. Satellites represent the final frontier in the competition for connectivity.

Today the world ... tomorrow, Mars?

Then there's the Mars connection: SpaceX is already reportedly turning a profit, thanks to its contracts to deliver cargo to the International Space Station, design spaceships for NASA astronauts and launch commercial satellites. But it'll take a lot more money for Musk to realize his dream of sending colonists to Mars and turning humanity into a multiplanet species.

That's where SpaceX's SatNet comes in.

"This is intended to be a significant amount of revenue and help fund a city on Mars," he said during his Seattle visit. "Looking in the long term, and saying what's needed to create a city on Mars — well, one thing's for sure: a lot of money. So we need things that will generate a lot of money."

And if Musk's dream becomes a reality, maybe there'll be yet another SatNet rising.

"That same system we could leverage to put into a constellation on Mars, because Mars is going to need a global communications system too, and there's no fiber optics or wires or anything on Mars," Musk said. "We're definitely going to need that. We're going to need high bandwidth communications between Earth and Mars. So I think a lot of what we do in developing an Earth-based communication system could be leveraged for Mars as well — crazy as that may sound."