OneWeb Approval Means More Stress on Rural Operator Business Model

There is, in essence, no commercially-viable and sustainable business model for fixed network communications services in many rural areas of the United States, even in some cases where there is but one supplier.  That is why we have subsidies for such services.

But the business model is going to get worse. Even if competition from cable operators do not worsen, and even if internet service providers using fixed wireless, and even if mobile operators do not become stronger competitors, there rather soon will be one or more providers with sufficient scale, and low enough recurring costs, to provide new competition.

OneWeb, for example, plans to offer internet access from a new constellation of low earth orbit satellites that will be able to offer internet access at speeds up to 100 Mbps initially, and possibly a gigabit later, across the United States, and, if fact, covering the surface of the earth, ultimately.
The Federal Communications Commission has approved a request by WorldVu Satellites  (OneWeb) to access the United States satellite market. The action paves the way for OneWeb to provide internet access in rural areas, with scale.

With mobile providing a substitute for voice, streaming providing a substitute for video entertainment and OneWeb (and others) vying to supply internet access, every service provided by a rural fixed network provider can be replaced.

Enough of that demand will be replaced to further stress the rural fixed network operator business model.


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