At the IP Satellite Summit in Washington this week, a panel composed of satellite service providers and product vendors discussed whether or not they would pursue the economic stimulus funds set aside for broadband development. While the service providers agreed that there are viable business models for satellite broadband service without the stimulus money—of course, they were delivering service before the current economic collapse and talk of the stimulus money—the consensus seemed to be that they would apply for the grants to further develop, deploy and perhaps even subsidize their service offerings. Some spoke of the need to meet installation and recurring charges along with access rates similar to that of terrestrial services in order to increase service uptake.

However, some on the panel expressed concern in their ability to obtain the stimulus money, mostly pointing to the lobbying power of the existing legacy terrestrial providers. Several reasons were presented, but what was not discussed as a potential impediment to acquiring stimulus funds was the whole network neutrality debate. Unfortunately the session broke before I could present the question.

As most are probably aware, President Obama is a proponent of network neutrality and has even appointed advocates such as Susan Crawford to key administrative positions. How this all shakes out with respect to the stimulus funding remains to be seen. But there has been some talk that anyone receiving broadband stimulus funds should be required to commit to adhering to network neutrality regulations (however that may end up being defined.) Indeed, the FCC’s ruling last year against Comcast may set a sort of precedent for such policy.

Maybe terrestrial providers would be able to adhere to this since bandwidth is less scarce and expensive than satellite capacity. But is this a good idea to require of satellite service providers who must deal with technological constraints not seen in terrestrial services? Couldn’t it have adverse affects?

On the one hand, satellite providers are probably the best equipped to quickly deliver broadband to underserved areas. No digging is required (although one would wonder if that means the project is not “shovel ready”?). The funding could be used to subsidize installation costs, driving them down to levels similar to DSL or cable to make the service more attractive. It could be used to increase bandwidth or to drive down the monthly recurring charges to levels commensurate with DSL or cable. In either case, it could lead to an increase in uptake which not only would increase broadband penetration and satisfy one of the President’s goals, but also would create various jobs in the short term—installers, operations technicians, provisioning staff, salespersons, etc.—another major goal of the stimulus funding.

On the other hand, what happens if satellite providers who accept the money are forced to comply with strict network neutrality regulations that require a truly application-agnostic service? What if those regulations are written such that they prohibit the use of anything that resembles application-aware fair usage policy enforcement?

Satellite service providers are already faced with producing a competitive service offering in spite of expensive and scarce satellite capacity. The expense coupled with the dynamics of satellite technology often lead providers to construct the service with an aggressive oversubscription rate, engineered to provide acceptable service through the help of bandwidth management devices. There is risk to service quality if the architecture must be changed.

Worse yet, what if the network neutrality regulations are written so strictly—perhaps blindly—that broadband services must be dumbed down to pure layer 3 routing, prohibiting the use of pretty much any upper layer traffic manipulation?

As anyone involved in satellite services is aware, TCP acceleration is critical in high-latency satellite-based services. It is a standard architecture component necessary to compensate for the negative effects that the satellite delay has on TCP-based applications, including HTTP, which is the bulk of Internet traffic. The techniques used to perform the acceleration work at least at layer 4, where TCP acknowledgements are sent by local acceleration devices that proxy for the actual end devices involved in the transaction, e.g., the actual Internet web server or client PC. This masks the true network latency and keeps the TCP window open for the transaction, speeding up the data transfer, improving the application’s performance and enhancing the subscriber’s perception of the service. More sophisticated acceleration techniques now exist that operate above layer 3 and 4, some all the way to the application layer.

Based on what I have read, the most passionate network neutrality advocates would likely object to service providers becoming such a “middle man” in the application flow. They may construe this to be a network neutrality violation. Some would probably go as far as to fuss about privacy issues because the acceleration devices are looking into the packet beyond the IP header.

Is there a risk that the policy makers will miss the importance of both acceleration and bandwidth management in satellite services and create a dilemma for satellite providers who may want to apply for funding grants but would fear the negative effects on their service should they be forced to change their design?

Will the satellite providers have a strong enough lobbying voice to impress upon the policy makers the importance of bandwidth management, fair usage policy enforcement and acceleration in satellite broadband platforms and perhaps be granted an exception?

Or will the extreme “hands off, no exceptions” side of network neutrality win out and become policy?

The broadband stimulus money can do a lot of good to enhance satellite-based broadband service offerings, reduce prices, create jobs and increase broadband penetration (and do so more quickly than terrestrial options.) But if satellite service providers must risk service quality degradation, they may be reluctant to accept the stimulus funds.

It may be a catch-22 that I hope doesn’t happen.

Anyone with insight into what constraints are being placed on those applying for and receiving broadband stimulus money, please comment. Where does it stand at the moment?

Anyone with insight into how satellite providers may react to such constraints, also please comment.