APPENDIX 2. Canadian Satellite Capacity and Services Plan. (IC Licence Nos. 8 and 9)
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1 APPENDIX 2 Canadian Satellite Capacity and Services Plan (IC Licence Nos. 8 and 9) APPLICANT: Telesat Canada Pursuant to Canada Gazette Notice DGRB , Telesat is pleased to provide the following Canadian Satellite Capacity and Services Plan for its proposed hybrid (Ka-band and 17 GHz BSS) satellite, KA/BSS2, at the 91 WL orbital location. Consultations Telesat has had consultations with members of both the Canadian broadband and broadcast industries to ascertain their interest in new Ka-band capacity and, given the new multi-media, Internet-driven market, whether their requirements might include 17 GHz BSS capacity. Discussions were held with all the Canadian satellite users registered with the Department for this Call, including members of the Canadian Satellite Users Association (CSUA) who had not registered individually on the Department s list. Telesat also had consultations with its national broadband partners in Canada and in the U.S., Barrett Xplore (Barrett) and WildBlue, respectively, to determine their future Ka-band demand following on from Anik F2, F3 and KA/BSS1. Preliminary discussions are also ongoing with Telesat s regional Canadian Ka-band resellers concerning current capacity use and the prospects for introducing new Ka-band capacity to the Canadian market. Telesat is pleased with the understandings in principle for capacity it has with Barrett and WildBlue and the confidence expressed in Telesat as they develop their Ka-band requirements. This demonstrated support is an affirmation of the successful working relationship established by Telesat as the first to bring Ka-band services to the Canadian market and the confidence that Telesat is their satellite operator of choice with a comprehensive Ka-band strategy and the means to execute it November 15, 2006
2 As Telesat s KA/BSS2 satellite proposes a dual payload, Telesat s Canadian Satellite Capacity and Services Plan for this satellite at the 91 WL orbital location is broken out into two distinct subsections: Satisfying Canadian Ka-band Capacity Requirements Satisfying Canadian 17 GHz BSS Capacity Requirements A Satisfying Canadian Requirements for Ka-band Satellite Capacity & Services In Telesat s assessment the Canadian broadband market consists of two principal sectors: consumer and small/ medium sized business/home office (SME/SOHO). A1 Consumer Sector and Ka-Band Demand Since 2002, the estimated number of Canadian households not served by some form of broadband has trended downward yet remains significant; Table 2-A1 below provides estimates issued annually from Industry Canada s Broadband Community Service Status database of the number of communities and households without some form of broadband access. Table 2-A1 Year Issued Canadian Households Without Broadband Estimated Households w/out BB (000 s) , , , , According to the Industry Canada data issued in 2006, as many as 697,709 Canadian households did not have access to any kind of broadband service. Telesat believes this is a conservative measure, as the Department s data assumes that if broadband access is available in a community then all households are being served November 15, 2006
3 This data does not address the many households that are classified as being located in towns and cities with broadband access but who in fact, live beyond the service s reach. To reinforce this point, of Anik F2 s existing Ka-band subscribers, 70 percent reside in towns and cities where Industry Canada s data indicates broadband access is available. Prospects for future satellite broadband growth in Canada appear positive too; Canadian national reseller Barrett is forecasting that increases in subscriber bandwidth requirements will drive DSL and cable to focus more on urban areas, leaving more urban fringe and rural territory for satellite. These views are echoed by Telesat s smaller regional satellite broadband service resellers across Canada. By targeting these consumer households in urban fringe as well as potential subscribers in remote and rural areas that do not have a broadband solution, Telesat expects that the number of households without broadband access today is greater than that estimated by the Department s data. A2 SME / SOHO Sector and Ka-Band Demand Broadband access is an essential tool for SME/ SOHO commercial operations. According to Statistics Canada there are one million employer businesses in Canada (defined as businesses that maintain at least one person on payroll), of which approximately 75 percent (or 750,000) are small businesses with 1 9 employees. 1 Based on figures from Canada Post, approximately 208,000 2 of the total of all businesses are operating in Canada s rural postal areas; accordingly, of the total rural businesses operating in Canada, we can estimate approximately 155,500 are SME s. Using provincial distributions from Statistics Canada, Table 2-A2 below breaks down their distribution by province: 1 2 Key Small Business Statistics. Industry Canada, January Householder counts November 15, 2006
4 Table 2-A2 Rural SMEs SMEs NL 2,531 PE 970 NS 4,513 NB 3,893 QC 35,390 ON 51,715 MB 5,267 SK 5,835 AB 21,057 BC 23,776 YT 235 NT 257 NU 93 TOTAL 155,532 A3 Other Ka-band Demand Telesat believes that other new Ka-band capacity demand will materialize as the satellite broadband market matures. This demand could come from new satellite broadband service providers including from Canadian broadcast distribution undertakings. Specifically one of Telesat s largest customers, Bell ExpressVu, has confirmed its exclusive support for Telesat s application at the 91 WL orbital position. Another layer to consider in future Ka-band demand is the pending situation regarding Ka-band capacity on Anik F2. Because the number of subscribers in the Canadian satellite broadband market is growing exponentially, it is clear that over the medium-term, demand will outstrip the capacity available on Anik F2 and Anik F3. The overall capacity of Anik F2 is estimated at 150,414 nominal subscribers. It is expected that by the end of 2008, demand will exceed supply in some markets and this imbalance will grow by Moreover, these estimates do not account for the increased amounts of bandwidth needed for the service offering being demanded by subscribers today and in the future November 15, 2006
5 Telesat has developed a demand forecast for broadband services by the Canadian consumer and SMEs /SOHO sectors based on several assumptions. The assumptions that form the basis of this demand forecast depend on several variables as well as existing and future market conditions. Considering these variables, Telesat has estimated a business opportunity in the range of 500,000 to 1 million subscribers. The combined Anik F2/F3 Ka-band capacity will satisfy only a fraction of this demand. A4 Delivering Ka-band Capacity in Canada Telesat s longstanding Canada-first approach to delivering capacity will continue with the KA/BSS2 satellite. Telesat will seek upfront commitments from one or more future customers to act as anchor tenants for the satellite program. To that end, Barrett Xplore has indicated its requirement for Ka-band capacity at the WL and 91 WL orbital locations. As with the KA/BSS1 satellite, Barrett will deliver satellite broadband service offerings using KA/BSS2 on a retail basis in the Canadian market. Based on the considerable successes that Barrett has realized using Anik F2, Telesat has complete confidence in its partner s commitment and ability to deliver today, and in the future, among the most advanced broadband satellite services to Canadians everywhere. The Canadian Ka-band capacity on KA/BSS2 not contracted by Barrett will be made available to Telesat s network of Canadian resellers and new entrants, on a wholesale basis. Finally, as it has done in the past and most recently with Anik F3 C and Ku-band capacity, Telesat will solicit interest for Ka-band and 17 GHz BSS capacity on the KA/BSS2 satellite from the Canadian broadband and broadcast markets. Telesat will seek contractual commitments for the new satellite capacity on a wholesale basis from interested Canadian entities. A5 Description of Ka-band Payload The Ka-band payload of the KA/BSS2 satellite is designed with all Canada and U.S. coverage. The satellite will be equipped with 124 spot beams; 46 of those beams will serve Canada. These user beams will be grouped based on their homing gateway; locations for these gateways have will be determined in the design phase November 15, 2006
6 However, the Ka-band payload is designed to operate with a total of 20 gateways, 9 of which are for Canadian user beams. The Canadian portion of the Ka-band payload on KA/BSS2 will have a throughput of 12.6 Gbps in the forward direction and 12.3 Gbps for the return direction. Following an award of licence for the KA/BSS2 satellite expected in mid-2007, Telesat will work with the prospective anchor tenants for the KA/BSS2 satellite to determine the optimal time for bringing the satellite into service. This is consistent with Telesat s long term Ka-band capacity plan which intends to deliver Ka-band capacity on an incremental basis as needed. However at the same time, Telesat will also respect its obligations to ensure that Canada retains its ITU priority at both the Ka-band and the 17 GHz BSS frequency bands for the 91 WL position. Telesat anticipates the satellite procurement, construction, launch and in-orbit testing of KA/BSS2 will take approximately months from the time a satellite procurement contract is signed. Figure 2-A5 KA/BSS2 Ka-band Canadian and U.S. Coverage November 15, 2006
7 A6 Telesat s Long Term Ka-Band Capacity Plan Telesat s discussions with Canadian Ka-band service providers resulted in four key findings concerning future Ka-band satellite capacity. First, the Canadian satellite broadband services market is still in its infancy and satellite capacity requirements will grow in parallel with that of the service providers business. The second finding indicates that over time, significant amounts of Ka-band capacity will be needed to fulfill the market potential for these services, primarily in rural and underserved areas across Canada. Third, the ability to restore broadband services quickly is essential to the future growth of these services and to the future of satellite broadband businesses in Canada. Thus it is also essential to have sufficient Ka-band capacity on more than one satellite in order to provide back-up and restoral capabilities for Canadian satellite broadband service providers. The fourth conclusion was that the cost of any new capacity to service providers must be kept as low as possible to ensure that services are priced competitively in the marketplace. In response to these findings, Telesat has developed a long term Ka-band capacity plan (detailed below) which includes the KA/BSS2 satellite as an important expansion and back up vehicle for broadband, multi-media services. Telesat s Ka-band plan strives to bring to market new, affordable Ka-band capacity over time to optimally match the growing business requirements for capacity by Canadian service providers. Canada s satellite broadband service providers are in the early stages of their business lives and their service growth. Immediately taking on the financial costs for all the Ka-band capacity that they might need over the next 15 years may not be an option that is financially sustainable to their businesses. Expanding on the successful emergence of Anik F2 Ka-band broadband services, Telesat s long term Ka-band capacity plan proposes the following Ka-band capacity additions: Anik F3 - small Ka-band, Canada-only payload at WL KA/BSS1 large North American Ka-band payload at WL KA/ BSS2 large North American Ka- band payload at 91 WL November 15, 2006
8 i. Anik F3 Telesat s Anik F3 satellite, scheduled to commence service in mid-2007, does have a small Ka-band payload in addition to its primary C and Ku-band capacity. Because Telesat holds only a temporary Ka-band authorization from the Department, Anik F3 s Ka-band payload was designed with limited capacity. Telesat also incorporated a spot-beam on Anik F3 that covers the area of Canada with the highest demand for satellite broadband services. Anik F3 will be used to complement Anik F2 and deliver services to customers that would otherwise have to be denied service in the short term. ii. KA/BSS1 Telesat s proposed KA/BSS1 satellite at the WL position is the second step of the long-term Ka-band capacity plan which uses an incremental approach to bring new Ka-band capacity to the Canadian market. With an identical Ka-band payload to KA/BSS2, KA/BSS1 will be in-service by 2012 and will be followed by KA/BSS2. Both satellites will overlay broadband capabilities on the existing and future services offered by Telesat at the WL and 91 WL orbital platforms using spectrum in other frequency bands. A comprehensive application seeking authorization for the KA/BSS1 hybrid Ka-band and 17 GHz BSS satellite at the WL orbital location is included separately as part of Telesat s response to the Department s Call. iii. KA/BSS2 Building on Telesat s existing 12 GHz BSS satellite platform at the 91 WL position, the KA/BSS2 satellite will be the third step of Telesat s long term Ka-band capacity plan. This satellite will be identical in Ka-band capacity and design to KA/BSS1 and enter service in With KA/BSS2 s Ka-band design, capacity and coverage Telesat intends to meet the incremental Ka-band capacity requirements that Barrett has indicated it will have over the long term, beyond those that will be met using KA/BSS1 capacity. KA/BSS2 will also provide additional Ka-band capacity to Canadian broadcasters, Canadian satellite broadband resellers as well as to WildBlue, for the U.S. market November 15, 2006
9 Finally, with identical Ka-band payloads at the 91 WL and WL locations, Telesat will achieve satellite diversity and redundancy by being able to offer mutual back-up and restoration of Ka-band services to customers at these orbital locations. Table 2-A6 Canadian Ka-Band Capacity Canadian Ka-band Capacity (Gbps) (Forward Direction) Anik F3.090 KA/BSS KA/BSS Total > 25 Gbps B Satisfying Canadian 17 GHz BSS Capacity Requirements Telesat plans to augment its Ka-band payload at the 91 WL position by using KA/BSS2 to also bring 17 GHz BSS spectrum to the Canadian market. B1 Canadian 17 GHz BSS Demand From its discussions with Canadian broadcasters and Canadian satellite broadband service providers, Telesat received interest but no firm commitments at this early stage to using this new 17 GHz BSS spectrum at the 91 WL position. However as with its KA/BSS1 broadband/broadcast service platform at the WL location, Telesat remains confident that the long term advantages of 500 MHz of dedicated spectrum to Canadian satellite users at the 91 WL position will stimulate demand. As demonstrated with Telesat s introduction of commercial Ku-band in the early 1980 s and most recently with the introduction of Ka-band, it takes vision and strong leadership to jump-start and open up new market opportunities. For Canada, it is important to bring into use the 17 GHz BSS spectrum in the relative near term, in order to establish ITU priority rights for Canadian use of this spectrum well into the future November 15, 2006
10 Telesat anticipates over time that interest in the 17 GHz BSS spectrum will grow and be generated by Canadian broadcasters and Canadian broadband service providers. As the demand for new applications such as IPTV and other multimedia services increases, so too will the need for broadening underlying transmission capability. This is true particularly in the case where more traditional transmission spectrum, such as Ku capacity becomes more congested. B2 Delivering 17 GHz BSS Capacity Telesat is proposing a 17 GHz BSS payload to piggyback on to the KA/BSS2 satellite. This 17 GHz BSS payload is intended initially as a test-bed for Canadian content and service providers to investigate and develop the means to deliver the next generation of multimedia content to the Canadian marketplace. The 17 GHz BSS frequency band cannot enter commercial use prior to April 1, 2007 though the FCC has announced a proceeding to allocate this spectrum in the near future. Telesat will offer the 17 GHz BSS capacity on a first-come, first-served basis in Canada and will work jointly with Canadian satellite users to develop innovative multi-media applications and commercial services for the Canadian market using this new spectrum. B3 Description of 17 GHz BSS Payload The 17 GHz BSS payload on the KA/BSS2 satellite will consist of 6 channels, each having 72 MHz of bandwidth. The payload will have Canada coverage with an option for switchable U.S. coverage November 15, 2006
11 SATSOFT Theta*sin(phi) in Degrees Theta*cos(phi) in Degrees Figure 2-B3 KA/BSS2 17 GHz BSS PAYLOAD CANADIAN COVERAGE Telesat is confident that the KA/BSS2 satellite platform will augment existing services and stimulate new applications because of the innovative combination of frequency payloads November 15, 2006
APPENDIX 2 CANADIAN SATELLITE CAPACITY AND SERVICES PLAN. (IC Licence Nos. 23 and 24)
APPENDIX 2 CANADIAN SATELLITE CAPACITY AND SERVICES PLAN (IC Licence Nos. 23 and 24) Applicant: Telesat Canada Pursuant to Canada Gazette Notice DGRB-001-06, Telesat is pleased to provide the following
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