Elon and Jeff are brilliant ! Surely THEY can solve our broadband issues.

Two dishes got married; the ceremony was meh but the reception was incredible.

Much has happened since we last visited the wacky world of low earth orbit (LEO) satellite constellations and their use in providing improved broadband service to Canada’s rural and remote users. This past Tuesday, July 21, all of Iqaluit, the capital of the Territory of Nunavut was without communication services ; no Internet, no landline, no cell service, no cable TV – simply because it was raining ! In a first world country like Canada this is unacceptable. We need better broadband service in Canada’s North NOW.

There is a rash of breathless newspaper stories in the mainstream media touting LEO service as arriving soon to resolve our remote and rural broadband issues. I wrote about it before here, that Elon Musk is not coming to save us any time soon. I also wrote about the Chapter 11 bankruptcy of the early leader to provide LEO service to the Arctic, OneWeb, here. So where do we stand now on July 27, 2020 ?

Well on July 10, the US bankruptcy court of the Southern District of New York (SDNY) approved a joint $1 billion bid for OneWeb by Britain and Bharti Airtel. The UK government and Bharti Global, an arm of Bharti Enterprises, which part owns India’s Airtel, will each have roughly 45 per cent of OneWeb. The existing secured creditors, including SoftBank of Japan, OneWeb’s former biggest shareholder, will own the balance.

But the landscape has changed from before OneWeb’s descent into Chapter 11 in the spring. OneWeb’s original mission was to “connect the unconnected “ ; ie it wanted to provide broadband service to the millions of people around the world that do not have access to the Internet. The UK has invested $500M into OneWeb for other strategic reasons, mainly to mitigate the effects of Brexit on British industry. I sure hope they realize that it is going to cost them more, much more and that $500M was just the table stakes to play in the LEO game.

After Brexit, the UK would have been locked out of the EU’s Galileo mission. Its aerospace industry would have lost work and technology to the EU and the USA and it would have fallen behind. Investing in OneWeb, and taking the “golden share” that lets it decide who gets access to the network will let it be a cornerstone of new industrial policy for Britain. Jolly good show.

But a $1 billion investment is just the starting point, OneWeb will need to raise at least $1B if not more to fully fund the company’s plans. So to mitigate, the mission will be changed from targeting unserved consumers to one targeting governments and commercial sectors to generate revenue quickly. These use cases are more in sync with what Telesat is proposing to do in selling wholesale connectivity to telcos and ISPs, starting with the Arctic. The UK also wants to develop other use cases such as a new navigation offering different from GPS or Galileo that it could then sell to its Five Eyes partners as an adjunct to GPS. That requires adapting and redesigning the satellites to the new missions.

The UK also wants to use this transaction bring more aerospace manufacturing back to Britain. The current OneWeb satellites were made in Florida in a joint venture with Airbus. Some or all of this manufacturing is expected to move to the UK.

The transaction to close the deal to buy OneWeb from Chapter 11 is expected to close in Q4 2020. Thus the former timeline of providing service in the Arctic by late 2020 is out of reach, 2021 will be too aggressive and 2022 is more realistic. All of the changes wrought by the new ownership and new mandates have created issues and decisions that need to be navigated; technical, financial as well as political which all bring delays to actually launching services.

Meanwhile, the other proposed LEO constellations have not been idle.

Amazon’s Project Kuiper has won the backing of Ajit Pai, the Chairman of the FCC who is backing approval of the venture.

SpaceX’s StarLink venture has just begun to raise more funding to continue launching service. CNBC has reported that it is in talks to raise $500M to $1B funding at a valuation of $44B (July 23) . SpaceX has also been not so quietly signing up beta customers in Canada and the USA to test trial service of its direct-to-consumer internet service late this year.

That leaves Canada’s Telesat. Telesat was also a bidder for OneWeb during its Chapter 11 bankruptcy. That bid came out of the blue, and we still don’t know what motivated Telesat to launch the bid, nor who financed the deposit. Telesat has yet to choose a manufacturer for its satellites with apparently an announcement due any moment, perhaps at their Q2 results conference call on July 30. The biggest question mark remains around the financing of the project.

In July 2019, Telesat received $85M CDN from the Federal Government’s Strategic Innovation Fund. Once the constellation is in service, they have a commitment from the Feds to purchase $600M CDN in services over 10 years. That still leaves a huge question of how Telesat plans to finance the enormous capex to launch the LEO constellation before it sees any revenue. As we saw with OneWeb, there are not many investors around that are willing to sign the large cheques needed to finance such risky ventures. Even Softbank (funders of Uber and WeWork) balked at additional funding for OneWeb while they were the largest shareholder and creditor. Such investors need to be able to keep signing large cheques to keep funding capex. (are you paying attention Boris?)

Telesat’s current shareholders are Loral Space & Communications, a NY based holding company and Canada’s Public Sector Pension investment Boards (PSP). I am not sure either are up to the task of financing such a risky venture. Loral recently paid a special dividend of $5.50/share on May 28, 2020 distributing to shareholders funds it had received from Telesat. Not the kind of action you would expect to see from a party planning to underwrite billions of capex expenditures. The PSP is a pension fund that historically prefers ventures that provide stable cash flows at predictable rates, which is what Telesat’s legacy business provided. LEO constellations are highly speculative and very risky, the exact opposite of what the pension plan for Canada’s public sector workers want to see done with their retirement funds.

From my personal perspective (ie I am guessing) I can see a strategic buyer taking control of Telesat from its current owners and funding the LEO constellation. That buyer would be Amazon and its Project Kuiper.

Amazon’s strengths are its financial muscle and long term vision. Amazon can raise funds cheaper than most nation states. Amazon may covet some of Telesat’s strategic assets such as its protected spectrum rights from the ITU and its substantial base of satellite technology and experience. Both of those would give them a significant advantage over Starlink. Telesat and Amazon have a relationship already as Telesat signed a launch contract with Blue Origin, another of Jeff Bezos’s companies for multiple launch missions in January, 2019.

Amazon could also introduce another use case for the LEO sats that no other strategic buyer could. They could use the service internally to connect their global network of AWS data centres. In essence, it could be a part of the connectivity portion of their AWS cloud. Potentially at a lower latency than some sub-sea fiber cables. That use case may be appealing on its own.

It would give Loral and PSP gracious exits and Jeff Bezos a competitive advantage against OneWeb who will be be busy sorting out their new ownership and new mandates over the next two quarters and let Project Kuiper keep pace with Elon Musk’s Starlink as it beta trials consumer service this winter.

Never underestimate the power of bragging rights between billionaires.

We shall continue to watch this sector closely. My core message remains, do not expect LEO satellite constellations to be the saviour of Canada’s remote and rural broadband issues any time soon. We must continue to expand our network of fiber optic cables, including Arctic sub-sea cables.

Networking Pendulum

What was once old, is new again


One of the benefits of age is perspective. You notice that many of the “new” ideas are simply old ones that have come back into vogue, like the swing of the pendulum. The aptness of the metaphor is clear, as history demonstrates a tendency for human events to swing back and forth from one extreme to another.

We see this in politics (conservative vs liberal), we see this in fashion and in telecom networking. Early in my career, while still a systems engineer, I remember one of my first published articles being about the swing from companies using public networks based on X.25 packet protocol (like Datapac) to private networks using their own multiplexors and leased lines. (Note I had just moved from Bell Canada where I supported Datapac to General DataComm where we were selling muxes)

We’ve seen this pendulum swing between using public and private networks for a company WAN many times over the years. Leased private lines gave way to X.25 packet networks, which ceded ground to T1 or T3 networks (or fractional T1 like Megastream). Frame Relay, ATM and then the rise of MPLS, “Multiprotocol Label Switching”. Now we are seeing a challenger in the corporate networking world, SD-WAN, which uses the public Internet and extensive software to try to mimic and replace MPLS.

MPLS can be slow to implement, especially internationally, as it takes time to order and connect all of the connections, especially the final local Ethernet connections at each country. MPLS can also be expensive compared to DIA, Direct Internet Access. In MPLS’s favour, as with most private networks, is it’s inherent security, consistent latency, and guaranteed service levels and Quality of Service (QoS). For overseas voice circuits and critical enterprise data that is essential.

SD-WAN, based on the now ubiquitous public Internet, is now widely available, quickly deployable and seemingly less expensive. By using multiple business grade Internet connections (DIA which should be contention free) and some fancy software , it can approach the level of consistency of MPLS. Is it less expensive ? Well, vendors will make that case based on pure network costs, but soft costs of running and maintaining the equipment and connections have to be factored in.

The tension between secure and reliable private networks and less expensive shared public networks (like X.25, Internet and cloud) is one that has been going on for years, and watching this pendulum swing back and forth is something I find fascinating.

2019 Canadian ISP Summit – Day 1

I was looking forward to this event for months and Day 1 did not disappoint. Met up with many friends and customers within the first few minutes of arriving on Monday. And made new friends and contacts throughout the day . Thanks to TekSavvy for sponsoring my “office” at the show.

The keynotes on innovation and disruption in our Internet industry were very interesting. The talk about women in tech by Maryna Ivus of ICTC was very eye opening. She outlined StatCan numbers that show the number of women working in telecom fell from 35% in 1999 to 25% in 2019. Those numbers surprised and disappointed me as someone who has been in telecom all my adult life.

There was ample networking at this sold-out event; a cocktail reception sponsored by TorIX and QIX, a superb dinner at the CRAFT Beer Market by MBSI WAV and Cambium Networks and an after party by ADTRAN that I was smart enough to not attend . There are times I have to acknowledge my own limits ! Thank you to all the sponsors for making this event so special.

Day 2 has a full agenda with keynotes and panels on both the business of ISP’s and technical discussions. I will blog the highlights tomorrow after the Gala Dinner.

2019 Canadian ISP Summit

The Registration Desk for the 2108 Canadian ISP Summit

Monday, November 4th is the start of the 2019 Canadian ISP Summit to be held at the Toronto Mariott Downtown Eaton Centre Hotel. Designed for Internet Service Providers (large and small) from across the country, the Canadian ISP Summit is a conference that allows attendees to learn, grow and network.

It is put on by CNOC, The Canadian Network Operators Consortium Inc. There are three days filled with keynotes, panels, general sessions and lightening talks. There will be technical sessions, business related sessions and always some superb regulatory discussions. There are plenty of opportunities to network before and after sessions, during coffee breaks and meals as well as cocktail receptions and fabulous dinners.

Caught holding court at the TekSavvy booth, networking during the 2018 Summit

This show is one of my favourites. I have attended three of the last four ISP Summits and will be attending again this year. It gives me an opportunity to focus on the data side of AurorA’s business. International telecommunications is more than just voice termination; AurorA also provides international data services such as MPLS, Cloud Connectivity, SD-WAN and even Tier 1 Internet. The Amitel side has partnerships that can help ISP’s with merchant service and payment processing, billing systems, colocation at 151 Front Street and even business process outsourcing. The Summit energizes me, educates me and introduces me to industry people from all across Canada.

Once again we’ll be blogging from the conference. My goal is to post a summary each night of some of the more significant talks, discussion and events of the Summit that I feel would be relevant to you, my readers, specifically from an international telecom perspective.

Hopefully, I will see you live at the Canadian ISP Summit. If not, then check in here in November for my updates from #ISPSummit. If there is something specific you would like me to cover then leave a comment below or reach out to me on Twitter (@TimoVainionpaa)

SecTor 2019 Conference

Today I attended the Expo portion of the SecTor 2019 Conference.
It was a bit of a stretch for me, and it got me out of my comfort zone as it was not part of the usual telecom or ISP service provider type of show that I normally attend.

SecTor is Canada’s premier IT Security Conference. You may have heard of events like DefCon and Black Hat in the USA. SecTor brings the latest in information technology security to Canada, to showcase Canadian talent and perspective in InfoSec.

There were some Waterloo region companies present like eSentire and Blackberry. There were some companies that I do direct business with like Datex, showing their award winning DataStealth technology. And there were tons of other companies showcasing their wares and expertise at the Expo.

Timo with Mariann Utrosa, Business Development at Datex and DataStealth

Although I wasn’t able to attend the sessions, there were some fascinating ones in the guide including a live car hacking simulation . Apparently it is quite sobering to see how quickly and easily an automobile can be hacked !

If this sounds interesting to you, make plans to attend the SecTor 2020 conference. You can find more details here

Global Internet Phenomena

Sandvine produces the Global Internet Phenomena Report

It seems that each year that I went to the Canadian Telecom Summit, one of the highlights was Dave Caputo, the former CEO of Sandvine, giving a presentation with pearls of wisdom from their Global Internet Phenomena Report. That annual report was also then quoted in many other presentations as the authoritative source for what was happening on broadband networks around the world.

For example, back in 2012, Sandvine focussed on Social Networking and reported that Facebook was one of the top 4 applications on the Web and that over 50% of mobile devices communicated with Facebook each hour !

The 2019 Global Internet Phenomena Report was just released by Sandvine on Sept 10. Sandvine, a Waterloo company (forgive me some local cheerleading) has unparalleled visibility into the Internet industry with an installed base of over 2.5 billion subscribers worldwide across over 160 Tier 1 and Tier 2 fixed, mobile, WiFi and satellite operators. (note that China and India are not included in this data set)

So what is changing in how the world uses the Internet ? A lot !

Video is obviously king, but in ways that keep changing and evolving. Netflix led the way with streaming but now we are seeing more and more competitive streaming services; Amazon Prime, Hulu, YouTube and new ones coming from Disney, Apple, CBS and others. The big traditional cable and telco companies have been fighting back, trying to stop cord cutting with their own streaming offerings and video on demand.

How many different services will a consumer buy to replace their cable ? What do they do if the content they want is not on the services they are buying ? Well, the answer may be in this report as Sandvine is seeing a resurgence in BitTorrent traffic. The release of the final season of Game of Thrones on HBO , or the blockbuster movie Avengers:Endgame could be seen in the increase in BitTorrent traffic.

The big players in Web 2.0, the ones whose shares currently dominate the global stock markets are the FAANG ; Facebook, Apple, Amazon, Netflix and Google. Would it really be a surprise to find out that they also dominate the traffic on the Internet ?

Some other highlights from this edition of the report include:

  • Video is over 60% of the total downstream volume of traffic on the internet.
  • Netflix is 12.60% of the total downstream volume of traffic across the entire internet
  • Google is 12% of overall internet traffic, driven by YouTube, search, and the Android ecosystem.
  • Gaming traffic and gaming-related bandwidth consumption is increasing as gaming downloads, Twitch streaming, and eSports go mainstream.
  • BitTorrent is over 27% of total upstream volume of traffic
  • Facebook applications make up over 15% of the total internet traffic in APAC.

The report includes spotlights on the traffic share leaders for video, social networking, messaging, audio streaming, and gaming.

If you are interested, you can get a download of the report here