2.4.4 Satellites versus Fiber
A comparison between satellite communication and terrestrial communication is instructive. As recently as 20
years ago, a case could be made that the future of communication lay with communication satellites. After all,
the telephone system had changed little in the past 100 years and showed no signs of changing in the next 100
years. This glacial movement was caused in no small part by the regulatory environment in which the telephone
companies were expected to provide good voice service at reasonable prices (which they did), and in return got
a guaranteed profit on their investment. For people with data to transmit, 1200-bps modems were available. That
was pretty much all there was.
The introduction of competition in 1984 in the United States and somewhat later in Europe changed all that
radically. Telephone companies began replacing their long-haul networks with fiber and introduced high-
bandwidth services like ADSL (Asymmetric Digital Subscriber Line). They also stopped their long-time practice of
charging artificially-high prices to long-distance users to subsidize local service.
All of a sudden, terrestrial fiber connections looked like the long-term winner. Nevertheless, communication
satellites have some major niche markets that fiber does not (and, sometimes, cannot) address. We will now
look at a few of these.
First, while a single fiber has, in principle, more potential bandwidth than all the satellites ever launched, this
bandwidth is not available to most users. The fibers that are now being installed are used within the telephone
system to handle many long distance calls at once, not to provide individual users with high bandwidth. With
satellites, it is practical for a user to erect an antenna on the roof of the building and completely bypass the
telephone system to get high bandwidth. Teledesic is based on this idea.
A second niche is for mobile communication. Many people nowadays want to communicate while jogging,
driving, sailing, and flying. Terrestrial fiber optic links are of no use to them, but satellite links potentially are. It is
possible, however, that a combination of cellular radio and fiber will do an adequate job for most users (but
probably not for those airborne or at sea).
A third niche is for situations in which broadcasting is essential. A message sent by satellite can be received by
thousands of ground stations at once. For example, an organization transmitting a stream of stock, bond, or
commodity prices to thousands of dealers might find a satellite system to be much cheaper than simulating
broadcasting on the ground.
A fourth niche is for communication in places with hostile terrain or a poorly developed terrestrial infrastructure.
Indonesia, for example, has its own satellite for domestic telephone traffic. Launching one satellite was cheaper
than stringing thousands of undersea cables among the 13,677 islands in the archipelago.
A fifth niche market for satellites is to cover areas where obtaining the right of way for laying fiber is difficult or
unduly expensive.
Sixth, when rapid deployment is critical, as in military communication systems in time of war, satellites win easily.
In short, it looks like the mainstream communication of the future will be terrestrial fiber optics combined with
cellular radio, but for some specialized uses, satellites are better. However, there is one caveat that applies to all
of this: economics. Although fiber offers more bandwidth, it is certainly possible that terrestrial and satellite
communication will compete aggressively on price. If advances in technology radically reduce the cost of
deploying a satellite (e.g., some future space shuttle can toss out dozens of satellites on one launch) or low-orbit
satellites catch on in a big way, it is not certain that fiber will win in all markets.
2.5 The Public Switched Telephone Network
When two computers owned by the same company or organization and located close to each other need to
communicate, it is often easiest just to run a cable between them. LANs work this way. However, when the
distances are large or there are many computers or the cables have to pass through a public road or other public
right of way, the costs of running private cables are usually prohibitive. Furthermore, in just about every country