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Satellite firms eye Net content distribution

In the wake of a series of satellite woes, a handful of companies look to take a stab at the growing market for storing and distributing Internet content.

In the wake of a series of satellite woes, a handful of companies are looking to take a stab at the growing market for storing and distributing Internet content.

Private start-up companies such as SkyCache and iBeam Broadcasting are using satellites to distribute content--particularly streaming media--to the Net. The new method could go a long way toward alleviating Net congestion often experienced by users over typical Internet networks, analysts say.

As more people use the Internet, companies are faced with the growing problem of slow Net access over public networks. Recent streaming audio and video events--the Victoria's Secret Webcast and John Glenn's space launch, for example--were practically crippled by too many simultaneous users. Industry observers say these examples show that a lot of work still needs to be done to make the Net better suited for such high-bandwidth content.

Satellite networks that send information simultaneously to many users could alleviate Internet speed problems, the companies say, because the technology already works effectively when broadcasting television signals.

"The world is trying to force the Internet into a broadcast model. The existing [network] infrastructure can't do it well," said SkyCache chief executive Doug Humphrey. "You can't just brute force it anymore."

Yet satellite distribution of Net content won't replace traditional land-based networks, analysts say. Although the technology may be more cost effective than fiber-optic networks, satellites have bandwidth limitations that would prevent the technology from becoming a high-speed fix-all.

"Satellite could never compete with the bandwidth that's on the ground in terrestrial networks. They basically admit that," Patti Reali, an Internet industry analyst at Dataquest, said.

Recent satellite setbacks have also raised questions about the technology's reliability. Satellite phone providers Iridium and ICO Global Communications, saddled with huge costs, recently filed for bankruptcy. And when one of PanAmSat's major satellites malfunctioned, millions of paging customers were stranded without service.

Local cache
Satellite content distributors are not unlike fiber-optic content distribution companies such as Akamai, Sandpiper Networks, Mirror Image, and Adero--all in the spotlight this week with Digital Island's acquisition of Sandpiper and Akamai's impending IPO.

CNET TV: Akamai IPO forecast
CNET TV: Akamai IPO forecast
These companies offer technology that allows Net content, like Web pages, to be stored closer to users that access them the most--for example, weather information for California could be stored in caching centers in that state. By caching content locally--sometimes called the "edge" of the network--these companies prevent Internet users from suffering through slow downloads.

Satellite content distributors speed up the process by bypassing the traditional public Internet altogether.

"They're very similar to Akamai and the rest. It's just a different way to get content out to the edge of the network," said Steve Robins, an Internet industry analyst at The Yankee Group. "[Satellite firms] are just avoiding the problems on the Internet. Presumably they have more control over their satellite than they would over…the Internet."

The satellite content distributors gather Internet data and transmit it to a satellite. The satellite then beams the data back down to Earth, where it is received by the satellites' Internet service provider (ISP) customers.

Companies such as iBeam and Edgix use satellites to distribute content to their own cache centers. SkyCache prefers to work with the caching firms, simply serving as a means of transportation for their content. For example, SkyCache and Akamai signed a partnership today in which Akamai will install satellite dishes at its 45 regional content distribution sites to use SkyCache's service.

SkyCache delivers Internet caching and Usenet newsgroups to ISPs, transmitting data at speeds of up to 45 mbps (megabits per second), equivalent to data speeds over a T3 line.

Saving money
Those services, and similar ones being offered by iBeam, Edgix, and SkyStream, could save ISP customers money by avoiding the purchase of additional leased lines for data communications.

"For ISPs, it's all about delaying expenses. If you don't have to buy another T1 for six months, that goes a long way toward profits," SkyCache's Humphrey said.

Analysts say satellites are a cost-effective way to distribute data. "Fundamentally, I don't think anything can beat the economics of satellite distribution," Dataquest's Reali said.

Analysts also believe the satellite content distribution companies will find a niche in foreign markets, where leased line data connections are expensive.

"That could be the sweet spot for the satellite guys due to the international cost structure of bandwidth," Alex Benik, a data communications analyst at The Yankee Group, said. About 30 of SkyCache's more than 200 ISP customers are located in Europe.

The Net content distribution market, whether over satellite or fiber-optic networks, will be critical to the success of e-commerce--particularly this holiday season.

"The quality of the user experience is going to make or break Web sites this year," said Yankee Group's Robins, noting that users won't tolerate the lag time and crashes suffered by many e-commerce sites last Christmas.

"Whether you're using iBeam or SkyCache or Akamai or Sandpiper, that's going to help you get there. It's just a piece of it, but it's a very important part of the Internet infrastructure."