EU considers spending ?1 billion for satellite broadband technology

[andre kesteloot]

  International Herald Tribune <http://www.iht.com>
EU considers spending ?1 billion for satellite broadband technology
By Kevin J. O'Brien
Wednesday, December 10, 2008

*BERLIN:* The ?200 billion economic rescue plan being considered this 
week by European Union leaders includes a proposal to spend ?1 billion 
on bringing high-speed Internet access to rural areas.

The proposal is likely to pit the Continent's telecommunications 
operators against satellite companies, which say they are uniquely 
suited to expand the broadband, or high-speed, network to underserved 
parts of Eastern Europe and the Alps by the end of 2010.

Despite its potential reach, satellite technology has remained little 
used for broadband compared with cable television and DSL, or digital 
subscriber line, high-speed connections by telephone.

"We are definitely interested in providing this service should the 
funding be approved," said Giuliano Berretta, the chief executive of 
Eutelsat, a satellite company based in Paris. "Satellite operators, more 
than other conventional technologies, are best positioned to provide 
this service almost immediately."

Berretta said Eutelsat would use the money to subsidize installation of 
tuners and dishes in rural areas. Eutelsat plans to launch Ka-Sat in 
2010, a ?350 million, or $455 million, satellite designed to deliver 
broadband to a million homes in Europe.

SES, which is based in Luxembourg and operates the Astra satellite in 
Europe, is also preparing a proposal for the project, should money 
become available, said Yves Feltes, a spokesman.

"This would be a major opportunity for the technology," Feltes said.

But support for the plan by EU government leaders, who begin a two-day 
meeting to consider the rescue plan Thursday is not assured. The money 
would come from unspent funds in the current EU budget, which under EU 
rules normally revert back to member countries. Germany, which 
contributes the most to the EU budget and stands to get the largest 
refund if the project is rejected, opposes the expenditure.

The broadband spending was proposed last month by José Manuel Barroso, 
the European Commission president, who said linking more Europeans to 
the Internet would improve economic competitiveness.

Should the plan prevail, EU financing could bolster satellite service as 
a viable broadband technology in Europe, said Christopher Baugh, the 
president of Northern Sky Research, a company based in Cambridge, 
Massachusetts, that tracks the satellite industry.

Across the EU, 21.7 percent of residents had broadband Internet access 
in July, according to the commission; 107.6 million received service 
from a telephone DSL line or a cable television connection and 130,592 
via satellite. Only 6 percent of EU residents on average received 
broadband via mobile phones.

Until now, Baugh said, satellite broadband had been hindered by the 
relatively high cost of the hardware consumers needed to gain access to 
the service. But recent advances have lowered the cost to roughly ?400, 
including installation, from several thousand euros a few years ago. At 
about ?30 a month, service packages are comparable to those of DSL and 
cable.

But even if the project is approved, satellite operators will not be the 
only ones bidding. Michael Bartholomew, director of the European 
Telecommunication Network Operators' Association, said EU lawmakers 
should instead give network operators economic incentives to expand 
rather than spend public money.

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