11/27/21, 4:25 PM Understanding Satellite: the technology and pricing | Minnesota Rural Broadband Coalition

Minnesota Rural Broadband Coalition

Access to high speed broadband is important for a sustainable rural economy in Minnesota.

Understanding Satellite: the

technology and pricing

How does satellite work?

How Satellite Internet Works

What does Satellite mean for the end user

Benefits

Satellite reaches everyone in Minnesota

Recent improvements mean access to speeds of 25 Mbps down and 3 Mbps. Faster than
some rural areas have now.
Satellite works well for web browsing, sharing and viewing video

Drawbacks

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11/27/21, 4:25 PM Understanding Satellite: the technology and pricing | Minnesota Rural Broadband Coalition

Costs are high

Setup cost 0-$199
Monthly cost $49.99-$129.99 based on data allowance and download speed
Early termination fees
Costs and/or usage are based on data allowances, which can mean unexpectedly higher
bills or throttling of speeds. These can create real issues for people doing work, homework or
health care online. (On average American families use an average of 100 GB data per
month.)
Latency is 20 times higher with satellite than terrestrial broadband and means the following
applications won’t work well or not at all
VPN (aka teleworkers logging into the network/intranet at work)
Teleconferencing (such as Skype or Webex)
Gaming and simulation.

Understanding Satellite Pricing

Satellite monthly fees are based on speed AND usage.

Speed provides the capacity to interact online. The FCC has a guide to help track speed
requirements by activity. For example, streaming an HD video requires 4 Mbps connection
(download). To figure out your speed requirement, you’ll have to consider all users of
broadband – every laptop, smartphone, ipad and the Internet of things for each member of
your household or office.
Usage tracks accumulation of data. For example, an HD movie may be 3 to 5 GB.  It’s like a
cup that gets filled. Depending on you provider you may pay more if you overfill your cup,
your connection maybe slowed down if your cup gets filled or your provider may not have
data caps (aka data allowances) so you can interact online (download or upload) without
limitations. Many people have experience with usage on mobile contracts – but cellular
providers aren’t the only ones that track and charge by usage.

We looked a cost for a number of different national and state broadband providers. (See table and
chart below.) Some technologies (such as fiber) don’t track usage. Others focus on use as much
as speed. For those considering satellite Internet, they need to know that it is priced similarly to
cellular data service, by the GB of data use.

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11/27/21, 4:25 PM Understanding Satellite: the technology and pricing | Minnesota Rural Broadband Coalition

You can see that the satellite service is more expensive for both bandwidth and data usage. The
price for data usage, at $5 or $6 per GB compares very unfavorably to the dimes and nickels
charged by landline providers. For all providers except satellite, the lower bandwidth services have
the highest price per Mb.

The value in the wired environment is the ability to scale from 25 Mb to a Gb and to have the
network capability to deliver hundreds of GB of data every month to every customer.  Most sources
now put monthly household data use at 100 GB and that number is constantly growing.  You will
also see two providers have no data cap for their Gigabit service.

For rural residents that use data for school, business, health care or other date-heavy activities, it
is clear that satellite is an expensive or very limiting broadband option.  Satellite’s best feature may
be that it is an option for all rural residents.

How are the costs calculated?

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11/27/21, 4:25 PM Understanding Satellite: the technology and pricing | Minnesota Rural Broadband Coalition

Cost/Usage — Usage cost per GB  ($60 for 10 GB = $6 per GB)

Cost/Bandwidth (Connection speed) — Bandwidth cost per MB ($60 for 25 Mb = $2.40 per
Mb

With the help of some friends, we have created a broadband cost analysis spreadsheet that you
can use to help calculate the unit cost of your broadband.

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