During the past few years, many plans have developed for new communications networks that operate through the use of low-earth orbit (LEO) satellites. With the potential for redefining the manner in which the world communicates and for reaping enormous economic rewards, several of the world’s most influential individuals and corporations are working on plans to launch LEO networks over the new few years. But while the potential rewards for successful LEO projects could be great, there are still many problems which the same groups must face.

Low-Earth orbit satellites, the first of which was launched in 1995, are vastly different from conventional satellites. Traditional satellites have been used for a variety of purposes, ranging from secret military uses to cable television, and have become a necessity for several industries. However, these satellites have their drawbacks. First, they have typically been launched into geosynchronous orbits approximately 22,300 miles above the Earth’s equator. But there is limited space for new satellites in above the equator and the enormous distance between the satellites results in a half-second lag time in transmission. This makes it difficult, if not impossible, to use the satellites for purposes such as phone calls or video conferencing. Additionally, the satellites are very expensive to produce and require large and costly rockets to propel them into their correct orbits.

Low-Earth orbit satellites, however, solve many of these problems. Since LEOs do not need to be placed directly above the equator, there is almost no limit as to how many LEOs can be launched into orbit. And since LEOs operate between 400 to 1,000 miles above the surface of the earth, there is virtually no signal delay, allowing for new uses in telecommunications. Being in this lower orbit, LEOs require less energy to transmit data, and smaller, less expensive rockets can be used to launch LEOs into orbit.

The potential for Low-Earth orbit satellites has now become apparent, and industry leaders are now planning to launch complex networks of LEOs into orbit. Once complete, these networks can be used to provide services such as telephone and internet service to any location in the world, including to the over two billion people who currently do not have access to phone service. In these networks, no ground lines would be required and anyone with a cellular phone could call any other location on Earth.

Realizing this enormous potential, many of the industries biggest names have jumped on the bandwagon to launch their own LEO networks. Most notably, cellular telephone industry giant Craig McGraw has teamed with Microsoft Chairman Bill Gates to create Teledesic. When operational in 2002, Teledesic will be capable of providing broadband media connections anywhere in the world. Other companies such as Hughes Telecommunications & Space Co., Motorola, and Loral Space & Communications have also initiated plans for similar networks.

But as these companies begin launching LEOs into orbit, they face several economic, political, legal and practical issues. Perhaps the biggest problem is the astronomical startup costs associated with these networks. The estimated cost of such a network has ranged from $2.5 billion for Globalstar’s planned network of 48 satellites to $9 billion for Teledesic’s original proposed network of 840 satellites (Teledesic’s plan now consists of only 288 satellites). These prohibitive costs have already resulted in some industry leaders having to combine their efforts in order to survive.

Political issues also cloud the LEO satellite network industry. For example, in order to successfully operate, companies must get the rights to large batches of radio frequency rights from national governments. Additionally, since there currently not enough companies in the United States that are capable of launching satellites into orbit, companies are looking to launch LEOs from other countries. Before this can be done, however, bilateral agreements must be worked out between the United States and these other nations allowing American corporations to launch the satellites from foreign sites. And companies are also concerned that some governments may want to restrict the flow of information into and out of their countries in much the same manner as internet access has been limited in some parts of the world.

Closely related to these political issues are some legal ones, particularly dealing with where satellites may be placed and who can claim right to them. The Outer Space Treaty has already solved the problem of who owns satellites once they are launched. According to Article VIII of the treaty, any party that registers an object to be launched with the appropriate agency retains jurisdiction and control over the object once they are sent into orbit. A more difficult issue, however, deals with where outer space begins and, more particularly, how low of an orbit satellites may be placed. No treaty covers this issue, but some commentators believe that customary international law holds that outer space begins where earth orbiting satellites move. But it is possible that this definition was not meant to cover LEO satellites and may have to be revisited.

Perhaps the largest obstacles to the completion of LEO networks, however, have to do with the practical realities of implementing and using an LEO network. Foremost among these is the fact that no company has ever successfully created such a complex network of satellites that operated successfully in space. Although industry leaders remain hopeful that this will work, critics have noted that in the past it has been difficult to make even a few satellites operate in harmony, and that getting hundreds of satellites to cooperate with each other will be a daunting task.

Another problem relates to the cost that consumers will have to pay for such technology and the possibility that companies such as Teledesic are overestimating the existing market. It is estimated that portable phones compatible with LEO networks will cost several hundred dollars apiece, and phone service through LEO networks will cost around three dollars per minute. As industry leaders triumphantly speak about how the most remote towns and villages in third-world countries could have wireless phone service within a few years, many still wonder how residents in these countries will be able to afford the services. And others believe that once the networks are functional, companies will discover that people in third-world and developing countries will show little interest in LEO services such as internet access and videoconferencing.

And the problems even become more mundane. Ever since Sputnik was first launched into orbit, pieces of debris, ranging from inoperative satellites to pieces of rocket boosters used to launch spacecraft, have been collecting above the Earth. It has been estimated that there are now over two million pieces of "space junk" orbiting the Earth, and these pieces of debris could pose serious risks to the condition of new satellites as they circle the planet.

Aware of these problems, satellite communications companies have begun to address these problems. The complexity issue was a driving force behind Teledesic’s decision to reduce the scale of its proposed network. In 1994, industry competitors Globalstar, IRIDIUM, and Odyssey agreed to work together on global licensing issues. Some companies have also agreed to use various methods in order to limit the amount of debris that is put in space (such as by having rockets reenter the atmosphere after successfully delivering their payloads). And the United States has been successful in completing agreements with foreign countries, allowing American companies to launch their satellites from various locations throughout the world.

The world may experience a technological revolution if low-Earth orbit satellite networks are successful. If such networks operate as anticipated, people will be able to have internet and data transmission capabilities, telephone access, and other services from any point on the globe. But there are many economic, political, and practical dilemmas that face companies wishing to implement such networks. As the first small-scale LEO networks are completed in 1998 the world will begin to see how well these problems have been addressed thus far. And if successful, the world may also get a glimpse of the future of the communications industry.

POSTED MARCH 24, 1998