'Poor man's satellite network' gets off the ground

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05/03/2002

'Poor man's satellite network' gets off the ground

By Jonathan Sidener, Gannett News Service


Tim Koors, AP/
Arizona Republic Eric Frische, left, and Jerry Knoblach of Space Data, with one of the balloons that carry equipment that supports a wireless text messaging network.

CHANDLER, Ariz. — Jerry Knoblach encounters an awkward moment every time he begins a description of his company, Space Data.

People invariably look at him as if he's lost his mind.

Space Data wants to put disposable technology on weather balloons to support a floating, wireless voice and data network over rural America.

But give the graduate of Massachusetts Institute of Technology and Harvard Business School a few minutes to explain the economics and demographics of cell phone networks and you might start to believe the method behind his madness.

Every 12 hours, the National Weather Service launches 70 weather balloons from sites across the country. The balloons carry temperature sensors and Global Positioning Satellite equipment so the service can gather temperature data at known locations.

Space Data is negotiating with the Weather Service to hitch a ride for cell phone network repeaters on all those balloons. Space Data's electronics would include GPS equipment the Weather Service could use in exchange for providing the ride.

Space Data would then have a floating telephone network above the entire country. It's what Knoblach, the company's chief executive officer, calls a "poor man's satellite network."

Because the balloons are so much closer to Earth than even the lowest satellite systems, they require less power to receive a wireless signal and bounce it back to a ground station. The low-power system requires less-expensive equipment and lighter batteries. Each balloon would carry $300 to $400 worth of cell phone equipment weighing less than 6 pounds. Space Data would keep the 70 balloons aloft for 24 to 48 hours.

The cost of keeping a nationwide network of balloons aloft would be between $15 million and $20 million per year, Knoblach said. While that may sound like a lot, the company needs only a small piece of the $60 billion annual wireless voice and data revenue to break even.

With towers costing up to $230,000 to build, Knoblach doesn't expect land-based networks to compete in the bulk of the rural market. It would take 850 towers to cover as much ground as the repeater in one balloon, he said.

The low cost makes the disposable network possible. Space Data hopes to recover a small percentage of the balloon payloads but isn't counting on it in its business plan. The Weather Service recovers some of its equipment by placing a return postage label on the equipment so anyone who finds it can return it at no cost. Space Data plans to do the same thing.

The low power requirements give the company a chance to get its equipment off the ground.

While the deal with the Weather Service would be good for Space Data, it is not the only way the company could fly its wireless network. It could send up its own balloons if necessary, Knoblach said.

Today's cell phone companies provide coverage to 80% of the population by building their networks in areas of the densest population. Their powerful repeaters are placed atop towers.

Those networks cover about 10% of the nation's geography. As a result, 90% of the country, the sparsely populated rural area, has no wireless coverage. Space Data expects to provide coverage to all of rural America for $15 million to $20 million a year, Knoblach said. The company would then lease its network to cell phone providers so they could extend coverage.

Knoblach came up with the idea while working at Orbital Sciences, a satellite equipment company. The company made some of the components on the weather balloons. Then he worked on a project with a subsidiary to send e-mail anywhere in the world using the GPS system.

When elements of the two projects merged into the Space Data concept, Knoblach turned to two MIT friends, Eric Frische, now the company's chief technical officer, and David Wu, who is president and chief operating officer.

The fledgling company raised $1 million in angel financing in 1999. They raised an additional $1.5 million in 2000 and began test flights. Last year, the company raised $6.8 million and bought the national license for the radio spectrum for their network.

Space Data's first commercial product is expected to be two-way text messaging. The company has demonstrated the weather balloon system's ability to send and receive text messages. Those tests are being increased this year. Knoblach expects to have a system serving the Southwest by the second quarter of next year and two-way text service nationwide by the end of 2003.

Once the company has a functioning text network, it hopes to upgrade to add voice transmissions. Knoblach said text messaging is simpler. If an e-mail arrives three seconds later, it's no big deal. A three-second delay would make a conversation unintelligible.

"We're starting with text," he said. "We're taking the crawl, walk, run approach."

Jonathan Sidener writes for The Arizona Republic
 


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