- Facebook has announced an ambitious program of technology development to support its “Connecting the World” initiative.
- Technologies under consideration include satellites, unmanned solar powered aircraft, and laser based optical communications.
- Such technologies could provide Internet access to people who live in remote areas without communications infrastructure.
- The cost of such services is the major obstacle to overcome.
Last Friday, Facebook (NASDAQ:FB) issued a press release written by CEO Mark Zuckerberg laying out a broad research program aimed at "Connecting the World," bringing Internet access to the 4.5 billion people in the world who don't have it. It's a tall order, but perhaps not out of reach for someone with a net worth of $26.6 billion.
Proposing big technology projects seems to have become chic among Silicon Valley entrepreneurs. There was the "Hyperloop" proposal of Elon Musk. Google (NASDAQ:GOOG) proposed a low cost Internet infrastructure approach based on high altitude balloons it dubbed "Loon for All." And now Facebook has proposed just about every type of communications technology, except the humble phone line or cellular tower, in order to bring the Internet to that 4.5 billion.
Such announcements seem to be more about capturing people's imaginations with wizzy tech than about proposing workable solutions. Often the most workable solutions are the least glamorous. Facebook's press release "Connecting the World from the Sky" is a case in point.
Early in the paper, the author acknowledges that 80-90% of the world's population lives within range of a cellphone tower or otherwise has access to telecom infrastructure in some form. The real problem is not lack of infrastructure, but poverty.
The press release even acknowledges that the technologies being looked at are only for the purpose of reaching the 10-20% of the world's populations who live in remote areas without any telecom infrastructure, at most, 1.44 billion out of the 4.5 billion people without internet.
Is it possible that the technologies mentioned might be able to circumvent traditional telecom infrastructure by being more cost effective? This may be in the back of people's minds at Facebook's newly formed Connectivity Lab, but it's not acknowledged in the release. For good reason. Finding solutions that are more cost effective than the humble phone line or cell phone tower will be very challenging. Not impossible, but very challenging.
Expensive Communications Systems: Satellites
The Facebook press release suggests that satellite comm systems could be used to service the most remote areas. This is probably the greatest mismatch between system expense and ability to pay one could imagine. This is illustrated by the misfortunes of Iridium.
Iridium is a constellation of 66 Low Earth Orbiting (LEO) satellites built and launched by Motorola in the late 90s. Iridium can provide cell-phone like service using special handsets anywhere in the world, but it's much more expensive than conventional cellular. After sinking $6 billion into building and launching the system, Motorola spun off Iridium, along with a massive amount of debt in 1998. Iridium promptly went bankrupt in 1999 due to lack of customers, and was eventually bought by a group of investors in 2001 for $25 million. Today, Iridium Communications (NASDAQ:IRDM) is publicly traded on Nasdaq.
Could a next gen system, applying new technologies and lessons learned by less expensive? We'll soon find out. Iridium is set to begin launching Iridium Next in 2015, but they're not making promises that the service will be less expensive.
The main advantage of LEO satellites is that they can support handheld devices with relatively small antennas. For purposes of offering Internet access in remote locations Geosynchronous (GEO) satellites may be a better bet. HughesNet already offers internet access with up to 5 Mbps downloads for about $50-100 a month. The system requires a precisely aimed satellite dish and AC (wall plug) power, so it's impractical for mobile users. Although still too expensive, it's probably the least expensive option for satellite based Internet access currently available, and it's conceivable that improvements in launch costs and satellite construction could make future systems less expensive.
Unproven Communications Systems: Solar Powered UAVs
Of all the proposals in the press release, I found this the most intriguing and with the highest potential for success. The Solar Impulse manned solar powered plane has demonstrated the viability of solar powered flight with an aircraft of sufficient payload to carry communications gear in an unmanned form. Solar Impulse 2 is under construction, and planned to be able to fly around the world non-stop. Solar powered aviation has all the makings of a disruptive technology, but using solar powered aircraft as communications relays is unproven at this point in time.
The key advantage of a solar UAV (SUAV) would be the ability to fly to a remote area and then remain on station for many days or even weeks. The SUAV can provide selective service to a remote area that a satellite system could not. Unlike the Google balloon proposal, the SUAVs can be flown with much more control and maintained in position independent of the weather.
The press release showed SUAVs needing to be used with ground stations, which it was assumed would limit their access to remote areas. Thus SUAVs were proposed for service of medium population density areas where it's assumed ground stations can be built within range of the aircraft operating location.
I believe SUAVs could be extended to remote areas and would be lower cost than LEO satellites. The problem is how to provide the SUAV with a data link to the Internet. This probably can be solved with a microwave link to a GEO satellite, which would relay comm traffic from the SUAV to ground. The Global Hawk UAV possesses just such a satellite uplink capability. At the planned altitude of 60,000 feet, the same as Global Hawk, the thin atmosphere doesn't attenuate signals as much as at ground level, so the comm system can be smaller and lower power than what would be needed at sea level.
The advantage of using the SUAV in concert with a GEO satellite is that the SUAV can provide service for mobile hand held devices which otherwise wouldn't be able to "talk" to the GEO sat directly.
Uncompetitive Communications Devices: Lasers
I spent most of the last 15 years of my career in aerospace working on laser systems of various types, including lasers for satellite communications, what the Facebook press release calls Free Space Optical (FSO) communication. In the vacuum of space, lasers are a good communications medium, but on earth, atmospheric effects are very detrimental. Laser beams really don't propagate well through dust, fog, rain, or clouds. This is one of the reasons why most laser communication on earth goes through optical fibers.
Lasers were considered for the spacecraft to spacecraft links for Iridium, but later discarded as too expensive. They were considered again for Iridium Next, and also discarded as too expensive compared to microwave. As much as I and other workers in the field have wanted to find a niche for laser comm, it has been very difficult to be cost competitive with microwave comm systems. I don't expect this situation to change in the near future.
There is one possible laser comm application worth exploring in the SUAV satellite uplink. At the planned altitude of the SUAV, atmospheric effects are more manageable.
The Business Case
It's clear that there is a business case for Facebook's initiative. Doubling or tripling the number of internet users increases Facebook's user base and revenue. Here, doing the right thing is also good for business. With its huge $153 billion market cap and P/E of 100, now is the right time to invest in speculative "game changing" technologies.
The Facebook Connectivity Lab is in the early stages of a systems engineering trade study. As such, everything is open to consideration and nothing ruled out. Eventually, the set of viable options will neck down to a few really promising ones that the company could pursue.
As speculative as the proposal may seem, I'm pretty sure that the Connectivity Lab is on to something with the SUAV concept. Things may not pan out exactly as I foresee, and there really could be new technology developments that change the outcome of the trade study. But I'm confident that an SUAV will be one of the promising technologies that emerges from the trade study.
The question for investors is how serious is Facebook? At this point, they certainly seem serious. If they are, then in about a year, design work could begin on an SUAV testbed, an aircraft that can be used for operational testing of various comm approaches. To build such an aircraft, Facebook will need to partner with a bona fide aerospace company. If that happens, investors will know that Connecting the World isn't just an altruistic pipe dream.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.