analysis Does the National Broadband Network Company really need to launch two expensive new satellites to provide remote Australia with broadband? Setting the politics aside, from a technical perspective, it appears the answer is a clear: “Yes”.

This week saw NBN Co announce it had selected satellite specialist Space Systems/Loral to build and launch two new satellites that will provide high-speed broadband to Australians. The $620 million contract will see the satellites target the three percent of Australians who are not slated to receive either fibre or wireless broadband under the NBN policy, and will come into play in 2015 when the satellites launch.

Although Prime Minister Julia Gillard and Communications Minister Stephen Conroy used a nationally broadcast press conference to emphasise that the deal was necessary, and that NBN Co had gone through an exhaustive two-year satellite investigation and procurement process, it was immediately attacked by Shadow Communications Minister Malcolm Turnbull, who sees the deal as being too expensive. Turnbull’s core claim is that NBN Co could rent satellite capacity, instead of building its own. “There is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia without building its own,” Turnbull said in a statement.

However, the truth of this matter, as far as Delimiter has been able to ascertain, is that Turnbull is incorrect on this matter — as the Coalition has unfortunately been several times over the past month with relation to other NBN matters, such as the issue of whether cutting the NBN would save the Government money, or whether broadband prices are slated to rise under the NBN.

To ascertain the technical truth of the satellite situation, Delimiter spoke with NBN Co’s project director Matt Dawson on Friday afternoon.

Dawson pointed out that NBN Co had already followed Turnbull’s advice and leased a substantial amount of space on existing commercial satellites owned by IPstar and Optus. That deal, signed in May 2011, already saw a remarkable improvement in the satellite services available to Australians living in remote areas. It has delivered speeds of up to 6Mbps to residents and businesses which previously could attain much less — leading to “terrific” customer feedback, according to Dawson. However, the executive pointed out that just launching that interim solution had already soaked up “the lion’s share” of the commercially available satellite capacity in Australia. “Even that hasn’t got anywhere near the capacity we need in the long term,” he said.

To understand why, it’s necessary to both look at the technical details of satellite capacity, as well as the practical outcome of the interim satellite service launch.

For starters, due to its capacity limitations, the interim service is only capable of covering some 48,000 Australians, while there are several hundred thousand residents which sit within that three percent total not slated to receive fibre or wireless broadband. And secondly, where it does reach those people, the capacity constraints means the service, while reaching decent 6Mbps speeds, only features miniscule download quotas — currently averaging around 6GB per month, according to Dawson.

If you look at the NBN satellite plans offered by companies like HarbourSat and Active8Me, you can see this trend in action. HarbourSat’s top plan offers a tiny 10GB of peak and off-peak data, while Activ8Me offers higher plans, ranging up to 31GB — although at prices like $99.95 per month. For those prices, Australians in the fibre NBN areas will be able to download something like a terabyte of monthly quota.

Dawson points out there are “huge gaps” between the broadband service which rural Australians can receive through satellite, and the service available in city areas. “Doesn’t take long to use up that sort of capacity,” he says of the 6GB quota plans. “So the argument needs to move away from peak speeds, to what’s the real capacity of the network — what are people really getting.”

In terms of real capacity available on the market, Dawson says that NBN Co could probably kluge together something like 6 to 10GHz of capacity through commercially available agreements. The total capacity available to Australia was something like 40GHz, he said. Part of the problem is that the current satellites over Australia also service other countries in the Asia-Pacific region. In comparison, NBN Co’s brand new satellites will be able to deliver something like 90GHz, as they will deliver dedicated capacity to Australia.

In addition, much of the commercial satellite capacity in Australia is targeted over metropolitan areas, where the greatest return will be made for commercial operators, due to a heavier concentration of targets. In comparison, NBN Co will explicitly target users in remote areas, where normal satellite operators would find it hard to operate a commercially successful service.

The impact this rollout will have on the nation’s rural broadband problem is dramatic. For starters, speeds will be boosted immediately, from the currently available 6MBps (or even less in many areas) to 12Mbps. Coverage will also be boosted — from something like 48,000 people to several hundred thousand, including Australia’s external territories such as Norfolk Island, Christmas Island, Macquarie Island and the Cocos Islands. And the monthly quota problem will also be resolved, due to the excess capacity available through the infrastructure.

There’s also another question to be asked: Why launch two satellites? Couldn’t one do? No, according to Dawson. NBN Co is launching two satellites for redundancy, and to spread the load.

Building satellite broadband infrastructure isn’t like building terrestrial broadband infrastructure. If something goes wrong in space, NBN Co won’t be able to visit its satellite installations to fix the problem. “Anyone designing any telecommunications networks, must design in diversity into the solution,” Dawson says, noting satellite launches are not without risk. In the case of one satellite partially or totally failing, the several hundred Australians being served by the infrastructure won’t lose signal.

Instead, he says, NBN Co will be able to migrate all the users off one satellite and onto the other. Under normal circumstances both will be used, with each taking some of the load of Australia’s telecommunications needs.

At the end of the day, whether you believe Dawson and the crew at NBN Co is dependent upon your knowledge of the satellite industry and your ability to trust NBN Co’s engineers. However, speaking with the executive, it is clear that Dawson himself has just completed an exhaustive process of several years’ effort investigating Australia’s current satellite capacity and how NBN Co should best meet its government policy demands. “I know you want simple answers, but the devil is always in the detail,” he says at the outset of our conversation. “We’ve taken two years to go through this every which way, [seeing] what’s available, what’s becoming available, where the bandwidth is laid down. Is it C-band, is it I-band, is it KA-band.”

The result of that investigation, Dawson said, led NBN Co increasingly to the answer of launching its own satellites. “The more and more you go into it, the more and more systems engineering you need to go into to use what little capacity there is anyway,” he says. “We have gone through this upside down and backwards. We know where there’s capacity.”

Solving the problem through leasing capacity, Dawson said, “just didn’t add up”. “The maths is pretty straightforward,” he added. “Network architects, network engineers do the maths [and] they know how to design networks. That’s what we’ve been doing for the past two years. When you start to examine what capacity they’re talking about, the answer starts to become obvious.”

NBN Co has also been criticised for its procurement process for the satellite process. However, Dawson noted that the two process had been “very competitive”. “We know we’ve got very good prices for these sort of satellites,” he said. “We really do try to do the best that we possibly can. We have to be fiscally responsible, with taxpayers’ dollars,” he adds.

Debating satellite telecommunications costs and prices is not an easy business. There are relatively few experts on the issue in Australia. This week Delimiter called several noted telecommunications specialists, but found it hard to get objective advice on whether NBN Co had followed the correct path in deploying its own satellites.

However, I believe Dawson when he says NBN Co’s investigation of the satellite industry led it irrevocably down the path of launching its own infrastructure. The executive spoke passionately and at length about the matter, and had clearly been enmeshed in the intricate details for several years.

Like many of those who work at NBN Co, Dawson’s LinkedIn profile reveals that he’s a seasoned and respected technology executive who’s spent time working with both Australia’s private and public sector over the past twenty five years. From 1993 through 1997, Dawson was a senior project manager at Telstra. At that time he was working on large scale communications programs for the Department of Defence. Later, the executive ran his own consulting business, which was purchased by local IT services group SMS Management and Technology.

After that point, Dawson became Tabcop’s general manager of group infrastructure and operations, before joining NBN Co in April 2010, in what was at that time one of the company’s earliest intakes of employees. He was at that time a program manager for NBN Co’s networks area, but was quickly promoted to project director of the satellite division in July 2010.

Now, I’m sure it’s possible to get other views of this situation. Turnbull, for one, has stated that he has spoken directly to the satellite industry about the issue, and is convinced that NBN Co can lease the capacity it needs to provide, instead of building its own satellites. In addition, it is possible to argue that from a policy perspective, remote Australians don’t need 12Mbps broadband speeds or higher quotas, and could get by on lesser broadband solutions, given that they’re living in such remote areas.

However, for what it’s worth, I believe Dawson when he says NBN Co couldn’t meet its current policy commitments (which were set by the Labor Federal Government) without launching these two satellites. I also believe that the company has done extensive due diligence on the matter. Part of this belief is based on what I have seen of NBN Co’s contract processes, which have always appeared to be above board, but another part of it is that I don’t believe an executive of Dawson’s stature would willingly tell porkies about core technology infrastructure and procurement. He has no motivation to, after all — NBN Co is working for the public good of Australia. And it’s a company of engineers, not a company of politicians.

With respect to the broadband policy question, I do believe that remote Australians deserve and will definitely fully utilise broadband speeds of 12Mbps and increased quotas. Certainly we do in the cities — in rural areas such as farms and properties I can only see an increased need for good broadband.

Of course, as always, I will be happy to look at any evidence to the contrary — please send it to me if you have some — but for now, technically speaking, it appears as if NBN Co has made the right technical decision with its satellite contract announcement this week.

Image credit: NBN Co