Jeff Bezos Explains Amazon’s Bet on Project Kuiper Satellites

Geek Wire has the details

For the first time in public, Amazon CEO Jeff Bezos explained the rationale for his risky Project Kuiper satellite broadband venture, during a fireside chat that was interrupted when an animal rights activist jumped on stage.

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When Freshwater asked Bezos to name a “big bet” that Amazon has taken recently, he focused on Project Kuiper, the plan to put more than 3,200 satellites in low Earth orbit for global broadband coverage. The project came to light in April, and seems likely to be based in Bellevue, Wash. Here’s how Bezos explained his bet:

“The goal here is broadband everywhere, but the very nature of [having] thousands of satellites in low Earth orbit is very different from geostationary satellites. … You have equal broadband all over the surface of Earth. Not exactly equal, it tends to be a lot more concentrated toward the poles, unfortunately.

“But you end up servicing the whole world. So it’s really good. By definition you end up accessing people who are ‘under-bandwidthed.’ Very rural areas, remote areas. And I think you can see going forward that internet, access to broadband is going to be very close to being a fundamental human need as we move forward.

“So Project Kuiper has that. It’s also a very good business for Amazon because it’s a very high-capex [capital expenditure] undertaking. It’s multiple billions of dollars of capex. … Amazon is a large enough company now that we need to do things that, if they work, can actually move the needle.”

Amazon has already turned on its global satellite control networks, mostly located at it’s Global Data Centers strategically placed around the globe. As a significant provider of cloud services, LEO satellite delivery systems makes good business sense. It is the last link to providing cloud services to every business on the planet, at a highly competitive rate, compared to competitors like Microsoft Asure, IBM Cloud and lesser-known cloud companies relying on existing fiber network infrastructure. Amazon will be able to reach more global customers faster with competitive cloud service rates. More HERE.

The top ten cloud service companies are:

Kamatera.
phoenixNAP.
Amazon Web Services.
Microsoft Azure.
Google Cloud Platform.
Adobe.
VMware.
IBM Cloud.

After Amazon, only Google has made a move toward having an LEO satellite distribution system, partnering with Telesat and adapting Project Loon to LEO applications

Loon adapting connection routing ‘network brain’ from balloons to low Earth orbit satellites

While I admire and root for SpaceX, who is building a top-down system, Amazon is taking a bottom-up approach, building on existing reliable infrastructure and capping it with a fleet of LEO satellites has a higher probability of succeeding.  The open question is can Amazon catch SpaceX and OneWeb who have birds in space.

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RCRC Rural Broadband Update

The Federal Communications Commission (FCC) is under mounting pressure to re-evaluate the accuracy of the broadband mapping data used in the commission’s 2019 Broadband Deployment Report.  On June 2, 2019, Senate Minority Leader Chuck Schumer (D-New York) became one of the loudest critics yet when he pointed to the disparities between the FCC’s report and a 3rd party study conducted by Microsoft.

In addition, Congressman Doug Collins (R-Georgia), Ranking Member of the House Judiciary Committee, wrote a letter to FCC Chairman Ajit Pai requesting the commission consider a more accurate and reliable approach to mapping broadband coverage.  Unreliable broadband coverage data from the FCC paints an overly optimistic picture of broadband coverage in rural areas and undermines the ability of policymakers to prioritize funding for areas that are truly underserved.  More members are calling for improvements to broadband mapping data to better address the digital divide and improve broadband coverage in rural areas.

Source: RCRC Barbed Wire Newsletter

Amazon’s Broadband Network from the Ground Up

Amazon has not launched any LEO Broadband Satellites like SpaceX, OneWeb and Telesat but they already have a ground station network for controlling satellites, uploading and downloading data. Andy Jassy, CEO of Amazon Web Services, announces its availability in the video below:

The AWS Ground Station Network is a fully managed, ready-to-go ground station service, featuring:

  • No upfront cost.
  • Scaleability — you only pay for antenna time.
  • No long-term contract.
  • Self-service scheduling on a per-minute basis, that can be changed dynamically using their ground station console.
  • Secure transmission.
  • Low latency due to proximity to Amazon data centers.
  • Integration with EC2, S3 and other Amazon services and Amazon’s global network backbone.
  • Simultaneous up/download.
  • Support of most common communication frequencies.

 

The open question is will SpaceX, OneWeb and Telesat use this service?

RCRC Commentary: Empower Local Communities to Close the Digital Divide

Greg Norton President and CEO of Rural County Representatives of California.

The deployment of broadband infrastructure supporting speed-of-commerce connectivity is among the most critical missing components needed to drive economic development in California’s rural communities. Broadband access is essential to connecting rural communities to the 21st century economy. Yet the barriers to deploying infrastructure continue to inhibit access in some of California’s most disadvantaged communities in both rural and urban areas.

The Rural County Representatives of California (RCRC) represents 36 of California’s 58 counties, covering approximately 56 percent of the state’s land mass. It is estimated that merely 47 percent of California’s rural households within this population area have access to high-speed broadband.

I recently had the opportunity to speak about this crisis on a panel before the California Emerging Technology Fund (CETF) titled “The Imperative of Digital Inclusion.” In their 2016-17 Annual Report, CETF identified internet access as a “21st Century Civil Right,” and the internet is now firmly established as an operational epicenter for business, government, education, information, and basic services.

Access to broadband provides multiple economic and social benefits to rural residents by allowing access to vital government services and resources. Broadband contributes to job creation, economic growth and business investment improves access to critical healthcare services, and expands access to educational resources and opportunities. Broadband access for farmers and ranchers would allow for improved stewardship of our natural resources through the use of technology to monitor and measure water and soil conditions and usage.

Local governments have joined forces in advocating for the acceleration of broadband deployment in California’s rural communities, and have outlined a number of key provisions. First, the technology deployed must be an appropriate fit for the area — high-speed fiber connections are imperative. Second, we must look to rural electrification as a model, and fund local municipalities to develop the infrastructure, and provide the services. Lastly, local governments should be empowered to step up as lead partners with the federal government to formulate and execute upon strategies that achieve broad-based access to high-speed services.

When high-speed connectivity is unavailable, too slow, or too expensive, it has a significant impact on the economic success and quality of life in these communities. As a result of the digital divide, rural communities are suffering, and struggle to tap basic resources including educational opportunities, medical care, economic and trade opportunities, and vital government services, including public safety.

We’re aware of the challenges involved in deploying adequate capacity across the broadband infrastructure in California’s rural communities. Rugged terrain, remote locations, and sparse populations are all factors that lead to increased deployment and maintenance costs. However, these challenges must be addressed in order to provide this fundamental socio-economic tool and resource to the residents within these communities. While technological advances such as 5G are beneficial to the overall industry, this type of innovation only serves to create a greater chasm between the haves and the have-nots. Priority should be focused on an equitable deployment of appropriate level services throughout the state, not on the next big thing for the fortunate few.

Community-driven broadband partnerships offer a solution. We can quickly resolve this problem by including local communities in the process of choosing the appropriate means to deliver the requisite broadband to ensure quality of life, business growth, and household capital formation. In partnership with the federal government, communities can choose the approach to delivering broadband best suited to their specific needs. Options could include innovative public-private partnerships, other government financing, or through the enforced requirement of leveraging infrastructure investments made with federal dollars by incumbent providers. The Federal Communications Commission has deployed and earmarked enormous amounts of capital to closing the urban-rural divide that exists with access to broadband. Despite these massive influxes of capital, too many rural communities remain without access.

It is imperative that ubiquitous middle-mile fiber optic cable technology is provided at the speed of commerce to allow small to medium-sized businesses to compete in the digital global marketplace, and attract economic development opportunities to California’s rural communities. Although we have made advancements in expanding broadband, there is more to do to ensure that universal access to broadband services is realized for all rural residents. Now is the time — we must allow local communities to develop high-speed solutions that fit their rural communities’ broadband infrastructure needs. Broadband is fundamentally necessary to a community’s economic health, quality of life, and opportunity at prosperity.

The source is HERE.

Comment:

The Federal funding to improve rural access to broadband is the Connect America II Fund, which is a 10-year program.  The telco 5G build-out is expected to take at least a decade. If the LEO satellite programs from SpaceX, Amazon, OneWeb, LeoSat, and Telesat are successful, space-based broadband will become available in 2021 which is only two years away. By 2024 there will be multiple broadband satellite companies competing for rural communities business. These companies are planning to provide 4G and 5G backhaul services at a lower cost than fiber, which has to deal with “rugged terrain, remote locations, and sparse populations.”  One of the obstacles to satellite broadband is the current CPUC and CETF policies which discriminate against satellite services. These are policies that were put in place due to the low speeds, long latency and high cost of geo-satellite broadband services.  LEO satellites latency is on par with cable networks and shared fiber services, and current speeds are equal to cable internet and on long distances exceed fiber speeds.  These policies need to be revisited and adjusted to match future broadband services. More in this issue in future posts.

Satellite Internet Service Progress by Telesat

Telesat Test One
Telesat LEO-1, artist’s conception.
Credit SSTL

CIS 471 has the details:

In their quarterly report, Telesat mentioned progress in two, disparate markets. As I noted earlier, they have signed their first LEO customer — Omniaccess a provider of connectivity to the superyacht market. Telesat is a Canadian firm and the quarterly report also said Canada’s 2019 Federal budget included a commitment to using LEO satellite services to help bridge the digital divide. They will be serving Russian oligarchs and rural Canadians.

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Telesat’s coolest development was the announcement that they had demonstrated 5G mobile backhaul. They collaborated with Vodaphone and the University of Surrey in a test of their experimental satellites and recorded round trip latency of 18-40 milliseconds. The demonstration supported video chatting, Web browsing and simultaneous streaming of up to 8K video. The team also transferred 4K video to the edge of the 5G network. SES is already providing mobile backhaul using their middle-earth orbit satellites and it seems that the new LEO constellations will be competing with them. This will be an important application for rural areas and developing nations.

Blue emphasis added.  This has huge potential for rural communities as 5G mini-towers need to be connected to a broadband connection, and satellites access will cost less than laying fiber to every rural mini-tower.  However, this backhaul will not support applications requiring low latency response times, such as self-driving vehicles. However, some 5G is better than no 5G.

 

Will Amazon’s Flywheel Consume the Rural Broadband Advantage?

What is the Amazon Flywheel? It is best described in a Bloomberg article examining Amazon’s Market Reach.

As Amazon grew, the company adopted a business school concept called the flywheel, loosely defined as a sort of self-reinforcing loop. Where possible, projects were to be structured to bolster other initiatives underway at the company.

Here is an example of the flywheel in action:

By the time Amazon began breaking out the revenue of Amazon Web Services in 2015, the cloud-computing unit had reshaped how businesses used technology. It was also Amazon’s biggest money maker, churning out billions of dollars a year in profit that the company could put to work investing in new services and expansion of its core retail business. Once again, the flywheel in action.

With the announcement that Amazon will be launching 3,236 low earth orbiting satellites to provide broadband internet services from space the potential competitors SpaceX, OneWeb, Telesat and LeoSat took notice. The most vocal was Elon Musk who claimed Amazon was copying SpaceX.

Perhaps those that Amazon’s broadband network will impact the most, the mom and pop stores across the nation, may not have given the announcement a passing thought.

While the Amazon LEO satellites will be providing high-speed internet access to 14 million rural US citizens who do not have access now, they will also be providing these rural consumers access to Amazon’s e-commerce kingdom. While Amazon can offer cloud services to small business in rural communities at the same time, they could be stealing those small business customers with their lower cost e-commerce options.

Screen Shot 2019-04-16 at 5.50.09 AM

According to the Foundation for Rural Service study current rural broadband users account for $1.4 Trillion in an online transaction, 14% of all internet driven transition, or 7% of GDP. However, they’re 19 million users that do not have Internet access or have access too slow for effective e-commerce. Amazons LEO network will provide easy access to these unserved broadband customers and at the same time adding them to the Amazon e-commerce customer base. The flywheel in action.

While SpaceX, OneWeb, Telesat, and LeoSat are planning to provide broadband services, Amazon will be providing broadband service, but the primary goal is the creation of marketing and sales infrastructure, which is a far different business model than the service based competition.  The depth of Amazon’s offerings gives them an advantage.

The problem remains, will Amazon’s space-based broadband access be an advantage or detriments to rural communities? Given Amazon’s market penetration so far, it appears that a ubiquitous internet will transform communities, there will be more information based businesses and fewer street side shops selling commodities that Amazon can deliver for less.

Your thoughts?

GeekWire has Some Amazon Broadband Insight

If Project Kuiper comes to fruition, would Amazon, SpaceX, OneWeb, Telesat and other broadband players be chasing after the same customers in remote or underdeveloped regions of the world? Or would there be market segmentation?

You could argue that the biggest users of Amazon’s satellites will be … Amazon and its customers.

For example, Prime Video could offer streaming services worldwide via satellite (which could provide an edge over Netflix). The ability to provide cloud computing services to virtually anywhere in the world would be an attractive differentiator for Amazon Web Services (which already has a cloud-based platform for satellite management known as AWS Ground Station). And a global data network would make it a lot easier for Amazon to manage drones, robotic ground vehicles and all the other next-generation delivery channels it’s developing.

When you add the potential for taking orders and serving ads via a ubiquitous internet service, Project Kuiper looks less like a far-out fantasy and more like the final frontier for commerce. Amazon isn’t posting any job openings for satellite service marketers yet, but it’s probably only a matter of time.

Full Article is HERE. This is another opportunity for Amazon to change the business model once again. Another delivery systems totally under their control.  This is more than just a broadband delivery system.  Another Amazon Game Changer!  Stay Tuned!