PC World just reported about Satellite Broadband initiative by ViaSat.

I can’t imagine companies are still chasing fancy and dumb ideas in this economy. This clearly shows that why we are heading into recession, also why we deserve it.

What I don’t like about this business idea?

• Scheduled for launch in 2011.
• Speed is only  2Mbps, that too in 2011.

Why I consider this a dumb idea:

• It takes lot of money to own and operate a satellite, plus they come with an expiry date. It is not like an undersea fiber optic line, which can be used for very many decades. Just look at Sirius and XM to understand the satellite business.
• Burgeoning WiFi Max and other Long Range Wireless technologies. I expect these technologies to mature in few years and the cost of  operating such a long range wireless network will keep coming down. Thanks to Spint, Clearwire, Intel and Google for spearheading the WiFi Max roll-outs.
• Issue inherent to satellites: 1) Latency, 2) Need for clear view of the sky for dish/antenna and etc., These are not back-breaking issues; they can be solved, but takes lot more money to do so. However, Latency cannot be completely eliminated.

The operating costs will be so high that it will be impossible to make money on this commoditized broadband business.

Does this idea has any merit?

• The only time I see this technology is of any value is when Katrina-like situation occurs, where the Cell and WiFi towers are completely destroyed. The Long Range Wireless technologies will be able to resolve this issue over time. However, who cares about Internet during Katrina-like situation - only FEMA. Consumers will have other life pressing issues to worry about.