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Greg Wyler's mission is to make the Internet accessible and affordable to the "other three billion" people in the developing world, enriching lives and ensuring fair and equal access to information throughout.
November 03, 2008
URL:http://www.drdobbs.com/mobile/the-man-who-sold-the-sky/212000189
In Robert Heinlein's classic science-fiction story "The Man Who Sold the Moon," an outrageously extravagant entrepreneur constructs a huge and elaborate business plan inspired by the question, "Who owns the moon?" The entrepreneur has noticed that the moon only passes directly over those parts of the earth within about 30 degrees of the equator (more or less the Third World), and given that property rights are generally understood to extend down to the center of the earth and upward without limit, he asks himself, what if someone set about buying up the "lunar claims" of these Third World "Moon States."
It's an entertaining story, but it's just science fiction. Greg Wyler is a real-world entrepreneur who merely plans to hook up the 3 billion people in the Moon States to the World Wide Web. His company, O3B Networks, has as its mission to make the Internet accessible and affordable to the "other three billion" (hence "O3B") people in the developing world, enriching lives and ensuring fair and equal access to information throughout the entire world.
That's all.
Wyler doesn't call them the Moon States, but just as the moon only passes over that part of the earth near the equator, communications satellites in certain economically attractive orbits can communicate only with ground-based stations within a certain distance from the equator. The countries in this tropical band not only have a (questionable, to be sure) claim on the moon, they also have a privileged position relative to the reach of equatorially orbiting Medium-Earth Orbit (MEO) communications satellites.
O3b Networks will pursue its mission by ringing the earth with MEO satellites tricked out with the equipment necessary to empower other ground-based businesses to wire up the Third World.
In addition to technical expertise, O3B Networks' investors, Google, international cable operator Liberty Global, and private equity provider HSBC, have put $65 million into O3B Networks' effort, so this is not just an outrageously ambitious and high-minded dream. It is that, but it's not just that.
The plan has spawned a lot of online discussion, and inevitably someone asks some variation of this question:
When the average income in parts of the Third World is $2 a year and disease and starvation are rampant and there is a lack of stable government or a functioning economy and illiteracy is almost universal and there are no computers anyway, wouldn't food or clean water be more helpful than access to The Google? What's wrong with the question is that it assumes that the disaster stories we read on the Internet actually represent typical life in the developing countries. People who have worked there tell a different story.
Richard Koman, writing on the ZDNet Government site, recalls working on the Uganda Digital Bookmobile. "We loaded books onto hard drives and drove out to the villages. Many other aspects of [Brewster Kahle's] bookmobile concept could have been enabled if there were any meaningful net access on the continent."
But there isn't. The fact is that there are more broadband Internet users in Belgium than in all of Africa. "Med staff could drive a bookmobile around, learn about villagers' medical complaints, and access information for the village," Koman adds. "None of that was happening without the net. So O3B Networks' [plan] is welcome news indeed."
Wyler knows something about Third World communications access, having pioneered the first commercial 3G mobile and fiber-to-the-home network in Africa, and he puts it this way: "We have seen the impact of low-cost/high-quality bandwidth in emerging markets. It transcends just 'cheaper Internet,' but becomes a core pillar of economic growth. Along with transportation and power, these are the building blocks of an economy."
"Give a man a fish and he will eat for a day," goes the Chinese proverb. "Teach a man to fish and he will eat for a lifetime." "Give a person Internet access" is the 21st century equivalent of "Teach a man to fish."
O3B Networks plans to offer several kinds of communications infrastructure to companies in these regions.
"We will connect the head of a DSL system to the global Internet," Wyler explains. "The copper line in your house runs (along with every other house in your neighborhood) to a DSL Head End (DSLAM), which then aggregates all the copper lines onto a 'trunk line' into the Internet cloud. By reducing the costs of that trunk cloud, users can be apportioned greater speeds. By reducing the latency, users will be able to use interactive Web 2.0, Web OS, etc. in ways they just can't today."
The point about latency needs further explanation. After all, isn't sending signals clear out to a satellite too slow for Web 2.0 interactivity?
Not if you choose your orbit wisely, and that's why O3B Networks will deploy in Medium Earth Orbit, from which you can get a user experience comparable to DSL or fiber. O3B Networks has partnered with Thales Alenia Space to build the satellites, each of which will have up to 12.5 Gbps capacity. The satellites have steerable antennas and will operate in the Ka-band spectrum. The entire system is designed as a RAID, each satellite having internal and external redundancy.
The plan is to use one launch to distribute eight satellites in MEO. That's three more than the minimum required for full coverage around the equator. One downside of MEO is that the orbit will decay, so the satellites have a finite lifetime, and that has to be figured into the business model.
Wyler cites another example of what the company will provide: "We will connect a 3G/WiMAX tower directly to the Web. This is called 'mobile backhaul.' With a small kit at the base of a tower, that tower will share from a pool of up to 350 Mbps. The tower will not need to have line of sight to other towers and can be placed in rural or urban areas. The cost of reaching the Web from that tower will be reduced by 4× and capital expenditures for equipment will be reduced by 5×." Each satellite, Wyler explains, will support somewhere around a million users as the core network for terrestrial topologies—DSL, Cable Modem, 3G, WiMAX—and subsequent deployments of satellites beyond the first eight would be "timed to meet the demands of the markets." There's a lot of room up there in MEO.
What could universally accessible, high-quality broadband Internet connectivity mean to the Third World?
"Strong communications/Internet affects everyone," Wyler says. Direct participation of developers in Web 2.0 development is one case. "Today, most of the world cannot either (reasonably) download an Eclipse development platform, a Java toolkit, use a VPN, or even use YouTube. This prevents these economies from participating in development of the tool kits for software development, using the tool kits, utilizing online business applications, and participating in the interactive socio-political aspects of the web."
But the benefits of Internet access go beyond the individual who's logging on. "Clearly there is benefit to the family of the person who has new international income from web development, software sales, etc." A strong communications backbone is also necessary "to have an orderly administration of government, to reach the police stations, customs houses, court houses, schools, libraries, registries of deeds...This allows for a better transparency and smoother administration even for people who don't use computers."
The UN and NGOs need this sort of infrastructure in the Third World, too. "Recently the UN highlighted a renewed focus on its battle against malaria. Drug distribution to thousands of health centers, inventory control, validating use, and verifying results require strong IT infrastructure. Unfortunately today, in most parts of the world, the communications infrastructure for this is nonexistent or prohibitively expensive."
Hooking up the Third World would have enormous economic and humanitarian consequences.
It would be ambitious indeed if Wyler was planning to provide Internet and wireless service directly to 3 billion customers. But that's not the plan. O3B Networks is intended to be strictly a wholesaler of connectivity to local ISPs and fixed-line and mobile providers for, for example, cellular and WiMAX backhaul. Wyler draws an analogy with the back-end infrastructure that let stores like Best Buy, Wal-Mart, and Staples operate. "O3B Networks," he says, "is about creating that core infrastructure globally on which the back-end systems can operate, improving logistics, reducing costs, and improving access." Other companies, O3B Networks customers, would build on that infrastructure to do things from improving education and healthcare to developing or supporting new industries.
Merely providing the Internet infrastructure for this market is extremely ambitious. The O3B Networks satellites will span roughly 40 degrees either side of the equator, taking in all of Africa, most of South and Central America, the Middle East, India, most of China, Southeast Asia, and Oceania. That includes most of the world's population, the most untapped markets worldwide, and three of the four BRIC countries (Brazil, Russia, India, and China) that Goldman Sachs predicted could eclipse the economies of the world's richest countries in 40 years.
Wyler plans to launch in 2010. Technologically, that seems to be doable. But he also has to pull off the challenge of funding this huge operation.
Skeptics point out that others have attempted similar projects, including one backed by Bill Gates that never took off. And O3B Networks' strictly wholesale model means that they are entirely dependent on other players seeking retail opportunities in these developing countries. O3B Networks doesn't need to have a plan to make money from wiring up Third World. But it is necessary that others construct business plans built on the opportunity that O3B opens up. For O3B, the challenge is, if we build it, will they come?
But O3B Networks' investors seem to think they are backing a winner. The $65 million that Google, Liberty Global, and HSBC have invested is roughly 1/10 of what it will take to build and launch the satellites. Wyler says the rest will be financed through a debt-equity loan. The Financial Times reports that the initial investors have the right to provide the rest of the funding if they so choose, but other investors can be brought in.
I asked Wyler how the current world economic crisis would affect O3B Networks' plans.
"So far," he said, "we have represented a very strong investment opportunity, which focuses on all the markets outside the world financial markets. So while our markets taken together represent relative safety compared to the turbulence of the New York markets and the echo impacts worldwide, and thus improves our value in the equity markets, this [crisis] does mean that the commercial debt markets are very limited. However, our debt will likely be funded by 'project finance,' which is government backed by export/import credit-enhancement agencies, and this is the best and lowest-cost debt anyone can get. Short answer, it reduces our options for debt, but we had not planned to use those options anyway."
After mulling over Wyler's response, I went back and finished rereading the Heinlein story. The parallels were intriguing: A huge project mixing noble motives and a bold but hard-headed business plan, complex funding, the involvement of multiple governments, and, of course, rockets into space. Heinlein's work is always entertaining and sometime prescient. You might enjoy reading or rereading "The Man Who Sold the Moon" yourself.
I won't spoil the story by telling you how it turned out.
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