Telecom/1996-04-telecom-walnutcreek.iso/george.gilder.essays/ethersphere

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Date: Mon, 14 Nov 94 10:12:40 CST
From: [e-mail] (TELECOM Digest (Patrick Townson))
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To: telecom
Subject: George Gilder's Ninth Article - Ethersphere


With pleasure, a special issue of the Digest today featuring another
of the fine essays by George Gilder which have graced this journal
many times in the past ...

Like the others, this one will be permanently displayed in the Telecom
Archives for future reference. Various readers have asked how to
locate other Gilder essays, and briefly, what you need to do is
connect with the Telecom Archives at lcs.mit.edu and check out the
directory called 'telecom-archives', and within that directory a
sub-directory on special reports and a further sub-directory housing
several essays by Mr. Gilder.  If using anonymous ftp you would
do: ftp lcs.mit.edu, then login anonymous, giving your name@site as
the password. Of course you can use gopher or WWW if you prefer; you
need to make the same connection to lcs.mit.edu and the Telecom
Archives.

My thanks to Gordon Jacobson <[e-mail]> for seeing to it I
got a copy of this to pass along to TELECOM Digest readers.


Patrick Townson
TELECOM Digest Editor

  From: [e-mail] (Gordon Jacobson)
  Subject: George Gilder's Ninth Article - Ethersphere

    This series of articles by George Gilder provide some interesting
technological and cultural background that helps prepare readers to
better understand and place in proper perspective the events relative
to the National Data Super Highway, which are unfolding almost daily
in the national press.  I contacted the author and Forbes and as the
preface below indicates obtained permission to post on the Internet.
Please note that the preface must be included when cross posting or
uploading this article.


         The following article, Ethersphere, was first published
         in Forbes ASAP, October 10, 1994.  It is a portion of
         George Gilder's book, Telecosm, which will be published
         next year by Simon & Schuster, as a sequel to Microcosm,
         published in 1989 and Life After Television published by
         Norton in 1992.  Subsequent chapters of Telecosm will be
         serialized in Forbes ASAP.


                               ETHERSPHERE
                                   BY
                              GEORGE GILDER

                New low earth orbit satellites mark as
                decisive a break in the history of space-
                based communications as the PC represented in
                the history of computing.  Pay attention to
                much-maligned Teledesic.  Backed by Craig
                McCaw and Bill Gates, it is the only LEO
                fully focused on serving computers.


"They'll be crowding the skies."

     THUS STEVEN DORFMAN, president of telecommunications and space
operations for GM Hughes_the colossus of the satellite industry_warned
the world of a new peril in the skies.  Planning to launch 840
satellites in low earth orbits, at an altitude of some 435 miles, were
a gang of cellular phone jocks and computer hackers from Seattle going
under the name of Teledesic.  Led by Craig McCaw and Bill Gates, they
were barging onto his turf and threatening to ruin the neighborhood.

     You get the image of the heavens darkening and a new Ice Age
looming as more and more of this low-orbit junk_including a total of
some 1,200 satellites from Motorola's Iridium, Loral- Qualcomm's
Globalstar and Teledesic, among other LEO projects_accumulates in the
skies.  Ultimately, from this point of view, you might imagine the
clutter of LEOs eclipsing the geostationary orbit itself, the
so-called Clarke belt, some 21,000 miles farther out.  Named after
science-fiction guru Arthur C. Clarke, the geostationary orbit is the
girdle and firmament of the Hughes empire.

     In an article in Wireless magazine in 1945, Clarke first
predicted that satellites in orbit 22,282 miles (35,860 kilometers)
above the equator, where the period of revolution is 24 hours, could
maintain a constant elevation and angle from any point on Earth.  In
such a fixed orbit, a device could remain for decades, receiving
signals from a transmitter on the earth and radiating them back across
continents.

     The Clarke orbit also posed a problem, however_the reverse square
law for signal power.  Signals in space attenuate in proportion to the
square of the distance they travel.  This means that communications
with satellites 22,000 miles away typically require large antenna
dishes (as much as 10 meters wide) or megawatts of focused beam power.

     Now, however, a new satellite industry is emerging, based on
gains in computer and microchip technology.  These advances allow the
use of compact handsets with small smart antennas that can track low
earth orbit satellites sweeping across the skies at a speed of 25,000
kilometers an hour at a variety of altitudes between 500 and 1,400
kilometers above the earth.  Roughly 60 times nearer than
geostationary satellites, LEOs find the inverse square law working in
their favor, allowing them to offer far more capacity, cheaper and
smaller antennas, or some combination of both.  Breaking out of the
Clarke orbit, these systems vastly expand the total available room for
space-based communications gear.

     It is indeed possible to "crowd" the Clarke belt_a relatively
narrow swath at a single altitude directly above the equator.  But
even this swath does not become physically congested; collisions are
no problem.  The Clarke belt becomes crowded because the ability of
antennas on the ground to discriminate among satellites is limited by
the size of the antenna.  Spaceway and Teledesic both plan to use the
Ka band of frequencies, between 17 gigahertz and 30 gigahertz, or
billions of cycles per second.  In this band, reasonably sized
antennas 66 centimeters wide can distinguish between geostationary
satellites two degrees apart.  That's some 800 miles in the Clarke
belt.  Thus no physical crowding.  But it means that there are only a
total of 180 Clarke slots for Ka band devices, including undesirable
space over oceans.

     LEOs, however, can be launched anywhere between the earth's
atmosphere and a layer of intense radiation called the Van Allen Belt.
The very concept of crowding becomes absurd in this 900- kilometer
span of elevations for moving orbits that can be 500 meters apart or
less.  Thus the 21 proposed orbital planes of Teledesic occupy a total
of 10 kilometers of altitude.  At this rate, 70 or more Teledesic
systems, comprising some 65,000 satellites, could comfortably fit in
low earth orbits.

     Nonetheless, it was clear that the LEOs, one way or another, were
crowding Hughes.  Hughes commands satellite systems or projects that
compete with every one of the LEOs.  Hughes responded to the threat of
Teledesic by announcing the expansion of its Spaceway satellite
system, then planned for North America alone, to cover the entire
globe.  Then, invoking the absolute priority currently granted
geostationary systems, Hughes asked the Federal Communications
Commission to block Teledesic entirely by assigning Spaceway the full
five gigahertz of spectrum internationally available in the Ka band.

     On May 27, Dorfman summoned the upstarts, Craig McCaw and
Teledesic President Russell Daggatt, to Hughes headquarters in Los
Angeles for a talk.  Busy with Microsoft_the Redmond, Wash., company
that in 1993 temporarily surpassed the market value of General
Motors_Teledesic partner Bill Gates did not make the trip.  But as the
epitome of the personal computer industry, his presence haunted the
scene.

     Together with Spaceway chief Kevin McGrath, Dorfman set out to
convince the Seattle venturers to give up their foolhardy scheme and
instead join with Hughes in the nine satellites of Spaceway.  Not only
could Spaceway's nine satellites cover the entire globe with the same
services that Teledesic's 840 satellites would provide, Spaceway could
be expanded incrementally as demand emerged.  Just loft another Hughes
satellite.  Indeed, Spaceway's ultimate system envisaged 17
satellites.  With "every component proprietary to Hughes," as Dorfman
said, the satellites only cost some $ 150 million apiece.  By
contrast, most of the $ 9 billion Teledesic system would have to be
launched before global services could begin.

     Nonetheless, the new LEOs marked as decisive a break in the
history of space-based communications as the PC represented in the
history of computing.  Moreover, Teledesic would be the only LEO fully
focused on serving computers_the first truly "global Internet," as
McCaw's vice president Tom Alberg depicted it.  It brings space
communications at last into the age of ubiquitous microchip
intelligence, and it brings the law of the microcosm into space
communications.

     If you enjoyed the New World of Wireless on the ground with its
fierce battles between communications standards, technical geniuses,
giant companies, impetuous entrepreneurs and industrial politicians on
three continents_you will relish the reprise hundreds and even
thousands of miles up.  Launching Teledesic, McCaw and Gates were
extending bandwidth abundance from earth into space.  Observers,
however, often did not like what they heard.


BAD PRESS FOR TWO BILLIONAIRES

     Every so often, the media is taken by the notion of technology as
a morality tale.  In place of a gripping saga of unjustly obscure
geniuses enriching the world by their heroic creativity in the teeth
of uncomprehending bureaucrats and politicians, the media treat
technology ventures as a school for scandal.  We have mock exposes of
computer hype, monopoly, vaporware, viruses, infoscams, netporn,
securities "fraud" and deviously undocumented software calls.  Pundits
gabble endlessly about the gap yawning between the information rich
and the information poor, thus consigning themselves undeniably, amid
many yawns, to the latter category.  While American market share
climbs near 70% in computers, networks, software and leading-edge
semiconductors, analysts furrow the brows of the Atlantic Monthly with
tales of farseeing foreign teams, spearheaded by visionary government
officials, capturing the markets of American cowboy capitalists.  They
spiel implausible yams of tough-minded trade warriors prying open the
jaws of Japan for Toys "R" Us, closing down vicious Korean vendors of
low-priced dynamic RAMs, or blasting through barriers to U.S. telecom
gear in the Tokyo-Osaka corridor, saving the day for Motorola's
soon-to-be cobwebbed factories for analog cellular phones.

     One of these sagas began early this year with two Seattle
billionaires, McCaw and Gates, allegedly boarding McCaw's sleek yacht
and going on an ego trip.  With McCaw pitching in an early nickel, and
the boat, and Gates hoisting his name as a sail, the two tycoons
seemed to sweep away from the shores of rationality, as the media told
it, into a sea of microwaves and arsenic.  Spinning out Teledesic to
build an information superhighway in the sky, they proposed to strew
the heavens with 840 satellites, plus 84 spares.  All would whirl
around the world at a height of 700 kilometers (435 miles), using what
they told the FCC would be some 500 million gallium arsenide
microchips to issue frequencies between 20 and 60 gigahertz from some
180,000 phased-array antennas.  The entire project seemed suffused
with gigahertz and gigabucks.  "We're bandwidth bulls," says Teledesic
President Daggatt.

     In case the hype of the sponsors failed to keep the system
radiant and aloft, fueling it also would be a total of 12,000
batteries fed by thin film solar collectors stretching out behind the
satellite "birds" in some 130 square kilometers of gossamer wings.
Working at 4% efficiency, these cells would collectively generate 10
megawatts of power, enough to light a small city, but, so the critics
said, insufficient to reach Seattle at microwave frequencies in the
rain.  (The Teledesic frequencies are readily absorbed by water in the
air).  To manage the elaborate mesh of fast-packet communications
among the satellites and ground terminals, the constellation would
bear some 282,000 Mips, or millions of instructions per second, of
radiation-hard microprocessors and a trillion bytes or so of rad-hard
RAM.  In effect, Teledesic would be launching into space one of the
world's largest and most expensive massively parallel computer
systems.

     At a mere $9 billion, to be put up by interested investors,
Teledesic's lawyers told the FCC, the price would be a bargain for the
U.S. and the world.  (By contrast, current plans call for $15 billion
just to lay fiber for interactive TV in California).  But former
Motorola, now Kodak, chief George Fisher fresh from pondering numbers
for the apparently similar Iridium projects_suggested that $ 40
billion for Teledesic would be more like it.  (Teledesic had the
improbable result of making Iridium's 66-satellite plan, greeted in
1990 with much of the scorn now lavished on Teledesic, seem modest).
Just rocketing the 840 satellites into orbit was said to entail a
successful launch every week for a year and a half at a time when
hoisting satellites is still a precarious and sometime thing.

     Even if Teledesic succeeded in getting the things up, so other
scientists suggested, the satellites would then be impaled on some
7,000 pieces of space debris in the chosen orbits.  In any case, so it
was widely reported, 10% would fail every year, some tumbling out of
orbit, others joining the whirl of litter, where they would fly ready
to impale the remainder of the satellites and the remnants of the two
billionaires' reputations.

     Surely these sages know that by the year 2001, when the systems
would be up and running, the world will be swimming in the bandwidth
of "information superhighways."  Why support this lavish launch of
technology for a communications system that would be dwarfed by
capabilities already demonstrated on the ground?

     Summing up a near-consensus of critics, John Pike, director of
the Federation of American Scientists' Space Policy Project, declared
to the Wall Street Journal, "God save us.  It's the stupidest thing
I've ever heard of!" Provoking Pike may have been the origins of the
multisatellite architecture in the Star Wars "brilliant pebbles"
program.  Teledesic's most amazing achievement to date has been to
displace the Strategic Defense Initiative as Pike's peak example of
stupidity.

     While McCaw and Gates could be dismissed as tyros in the
satellite field, Hughes is world champion.  Since 1963, the company
has put 107 communications satellites into orbit.  With 19 in 1994,
this year should be its biggest ever.  In 1993, well before the
Teledesic announcement, Dorfman announced the first version of
Spaceway_a $ 660 million, two-satellite system offering voice, data
and video services_as a contribution to "information superhighways."

     In the midst of all the terrestrial uproar surrounding
superhighwaymen Al Gore, John Malone of TCI, Raymond Smith of Bell
Atlantic and scores of other telco and cable magnates, however, no one
paid much attention to Hughes.

     Then came Gates and McCaw with Teledesic and claims of 20 million
potential subscribers, two million simultaneous connections,
billion-bit-per-second "gigalinks," bandwidth on demand and an array
of other features, all advertised at a cost for Spaceway-type services
nearly three times lower per bit per second.  Everyone noticed
Teledesic.

     At the end of July, though, Hughes raised the stakes.  With
successful launches under way in China, Brazil and French Guiana to
provide exclamation points, Hughes made a new submission to the FCC,
extending Spaceway into a nine-satellite global system costing $ 3.2
billion.  McGrath plausibly claimed it could be in place long before
Teledesic and offer nearly all its functionality at a third of the
price.

     Already planned to be in place by 1998, however, were several
other LEO projects, led by Motorola's Iridium and Loral- Qualcomm's
Globalstar.  As mobile phone projects, these systems could not readily
offer service at T-1 data rates.  But their sponsors promised
availability for simple E-mail, faxes and paging.

     By mid-1994, Motorola seemed to command the financial momentum.
The company succeeded in raising some $ 800 million in equity
investments from companies around the globe, including Lockheed and
Raytheon (which would build the satellites), Great Wall of China and
Khrunichev Enterprises of Russia (which together would launch a third
of them), the Mawarid Group of Saudi Arabia (which pitched in $ 120
million) and Kyocera, Mitsui and DDI, which together put up another $
120 million (Kyocera will build the dual mode handsets for Japan and
DDI will sell and service them).  On August 10, an Indian consortium
purchased a 5% stake and a seat on the board for $ 38 million.
Motorola claimed its share of the equity was dropping to 28.5%, well
on the way to the company's final target of 15%.  Motorola estimates
that much of the additional $ 2 billion in the plan could come from
debt securities and loans.

     Iridium's attractions are impressive.  It provides ubiquitous
global phone service at a premium price with little or no dependence
on local terrestrial facilities.  In times of disaster or political
crisis, or in places with sparse or unreliable local service, the
system can route calls among the 66 satellites in space bypassing all
infrastructure on the ground.  For an elite of government officials
and corporate figures operating in remote areas, the availability of
Iridium should be worth the money.  A bold and visionary concept when
it emerged in 1987 from a team in the company's satellite systems
engineering group, it endows many regions of the earth with voice and
limited data communications for the first time.  For example, it
actually focuses on polar domains, such as parts of Siberia, poorly
served by other satellite systems.  Kazuo Inamori, the venerable
chairman of Kyocera, also believes that Iridium will be popular in the
60% of territorial Japan not currently covered by cellular.


"GIVE US SPECTRUM, LET OTHERS FIGHT"

     None-the-less, beyond the bold and ingenious concept (Daggatt
calls Iridium "the real pioneer of LEOs"), the system suffers from
technical flaws.  Were it not for Globalstar, perhaps these flaws
would not have become evident until alter the 66 birds were aloft.  A
far simpler and cheaper solution, Globalstar uses 48 satellites with
no links between them.  Each functions as a "bent pipe" transponder,
receiving signals from a phone on the ground and passing them back to
any gateway within the satellite's 1,500-mile-wide footprint, linked
to locally available telephone networks.  Because Globalstar uses
local phone systems rather than bypassing them, the system has been
able to raise a total of some $ 300 million in support from Alcatel,
France Telecom, Vodafone (serving the United Kingdom, Australia and
Hong Kong), Airtouch-U S West, Hyundai and DACOM in Korea, Deutsche
Aerospace and Alenia.

     This amount may seem small beside the billion raised by Iridium.
But Globalstar has capital costs (at $ 1.8 billion) one- half
Iridium's, circuit costs one-third Iridium's, and terminal costs (at $
750 each) one-fourth Iridium's.  With no intelligence in space,
Globalstar relies entirely on the advance of intelligent phones and
portable computer devices on the ground; it is the Ethernet of
satellite architectures.  Costing one-half as much as Iridium, it will
handle nearly 20 times more calls.

     The advantages of Globalstar stem only partly from its avoidance
of complex intersatellite connections and use of infrastructure
already in place on the ground.  More important is its avoidance of
exclusive spectrum assignments.  Originating several years before
spread-spectrum technology was thoroughly tested for cellular phones,
Iridium employs time division multiple access, an obsolescent system
that requires exclusive command of spectrum but offers far less
capacity than code division multiple access.

     Like conventional cellular or radio transmissions that
differentiate signals by time slot or frequency, TDMA sharply
restricts the reuse of spectrum in nearby cells.  By contrast, CDMA is
a form of spread-spectrum communications that differentiates signals
by a spreading code and allows the use of the same frequencies all the
time, everywhere.  Just as you can reduplicate wireline spectrum
merely by laying another fiber, you can now manufacture new spectrum
in the air merely by breaking large cells into smaller ones.

     Among some six companies seeking low earth orbit satellite
approval from the FCC in 1993, only Iridium used TDMA, requiring
national and international bodies to pick it as a winner from the
outset and assign it exclusive spectrum.  By contrast, in a majority
report issued to the FCC on April 6, 1993, CDMA companies in the U.S.,
including TRW, Loral-Qualcomm, Celsat and American Mobile Satellite,
could all agree to share spectrum and let the market choose winners.
A Motorola lawyer explained to Space News, "Give us the spectrum and
let the others fight for whatever's left."  In the face of
alternatives with no need for exclusive spectrum allocations, Iridium
could fly only if it offered radically superior performance or
capacity.  But TDMA dooms it to generally inferior performance and
capacity.

     Unlike TDMA systems, which can "see" only one satellite signal at
a time, CDMA handsets have "path" diversity, using "rake receivers"
that can combine a number of weak signals into an intelligible stream.
Iridium and other TDMA systems compensate by using more power.  But no
practical amount of power can propel a satellite signal through a tin
roof.  And excess power means larger handsets or heavier satellites.
Iridium satellites together use 80% more power than Globalstar's, yet
employ antennas nearly twice as large and offer 18.2 times less
capacity per unit area.

     Teledesic also suffers from the use of TDMA.  But Teledesic's T-1
capabilities would compensate with 100,000 times more bandwidth and
with a bit error rate that can accommodate the new fiber standards
such as SONET-ATM (synchronous optical network/asynchronous transfer
mode), which send packets without retransmission.  The issue is
whether these features can justify the political, financial, and
performance costs of using a modulation scheme_TDMA_that severely
limits spectrum sharing and path diversity.

     So what is this, another saga of hubris on the information
super-highway_to go with the Raymond Smith-John Malone follies?
Perhaps good new ideas are harder to come by as company revenues grow
into the billions, and Gates and McCaw disinvest and diversify as fast
as they can from their increasingly cumbrous vessels of wealth.
Having recently passed the billion-dollar mark in his systematic
process of disinvestment from Microsoft_he retains $ 8 billion or
so_Gates at times seemed embarrassed by his link to this gigantic
project.  He told us it was too early to write about Teledesic.

     No, the story is in fact more interesting.  Impelled by the
onrushing rise in the cost-effectiveness of individual chips compared
to multichip systems, the Law of the Microcosm dictates
decentralization of all information architectures.  During the 1980s,
this centrifuge struck the mainframe computer establishment of IBM.
During the 1990s, the personal teleputer, summoning and shaping films
and files of images from around the world, will collide with the
centralized establishments of TV broadcasting.  At the end of the
century, Teledesic and the other LEOs will usher in the age of
decentralization in space.

     From this point of view, Gates' participation becomes more
readily intelligible.  Gates seems always to follow the microcosm
wherever it leads.  A vision of software for decentralized systems of
personal computers informs everything Microsoft does.

     In 1994, for example, Microsoft made an investment in Metricom, a
wireless terrestrial system that supplies links of up to 56 kilobits
per second to portable computers or personal digital assistants.
Within cells, the devices can communicate directly with one another;
outside the cell, Metricom routes its calls through an expandable mesh
of nodes each the size of a shoebox and costing less than $ 1,000.
Based on spread- spectrum technology, the system operates at power
levels low enough to avoid the need for FCC licenses.  Yet it can be
expanded to metropolitan-area dimensions.

     In many respects, Teledesic is Metricom in the sky.  It is
focused on computer communications.  It routes packets by the most
convenient path through a mesh of nodes.  It is based on
microprocessor technology.  (Both Teledesic and Metricom plan to
employ devices from Motorola's 68000 family).  As Gates explains the
system: "Some functions are most efficiently performed by large
numbers of small processors working together, rather than a few large
ones."  The entire new generation of low earth orbit satellite systems
relies on this centrifugal force of the microcosm.

     It was not supposed to happen this way.  Just as Grosch's Law of
the computer industry implied that computer power rose by the square
of the cost, there was a similar law of the satellite industry that
held satellite efficiency to be proportional to see.  In a popular
text, "Communications Satellite Systems," published in 1978, James
Martin cited an AT&T study showing that just six satellites could
carry all the long-distance traffic from the American continent; no
fiber optics would be necessary.  "The next major thrust in the space
segment should capitalize on the economies of scale which today's
technology offers," wrote Martin, urging creation of "massive
hardware" as heavy as several tons and "immensely powerful satellites
with large antennas beaming as much information as we are capable of
using to our rooftops."  Many satellite advocates, led by Arthur C.
Clarke, viewed with impatient scorn the expensive terrestrial systems
that somehow forestalled the manifest destiny of big birds to rule the
world of communications.

BRINGING THE MICROCOSM TO SPACE

     In 1994, the big bird dream still flourishes in Spaceway, the
international consortium Inmarsat, and the new launch this summer of
direct broadcast satellite technology by Hughes's DirecTV, Hubbard's
USSB, TCI's Primestar, and Rupert Murdoch's imperial systems in Europe
and Asia.  Using centralized satellites in geosynchronous orbits, DBS
is the ultimate broadcast medium, reaching billions of potential
customers at the cost of reaching hundreds of thousands through
cable-TV systems.  But these geostationary satellite systems suffer
 from the same flaws as mainframes: sclerosis by centralization.  At a
time when customers want the choice, control, convenience and
interactivity of computers, the big birds offer one-size-fits-all
programming at specified times, with little ability to control the
flow or interact with it.

     The real showstopper in the long run, though, is a nagging
half-second time delay for Clarke orbit signals.  Bad enough for
voice, a half-second is near eternity for computer communications; for
the living-room and desktop supercomputers of 2001, a half-second
delay would mean gigabytes of information to be stored in buffers.
While companies across the country, from Intel to Digital Equipment,
are rushing to market with cable modems to allow computer connections
to CATV coax, geosatellites remain mostly computer-hostile.  Even with
the new digital cosmetics of DBS, geosynchronous satellites are a last
vestige of centralization in a centrifugal world.

     By contrast, Teledesic brings the microcosm to space.  Rather
than gaming economies of scale from using a few huge satellites,
Teledesic gains economies of scale by launching as many small birds as
possible.  Based on Peter Huber's concept of a geodesic network_a mesh
of peers equally spaced apart like the nodes in a geodesic
dome_Teledesic is not a hierarchy but a heterarchy.  Distributing the
system responsibilities among 840 autonomous satellites diminishes the
requirements, such as message throughput and power usage, for each
one.  Building redundancy into the entire constellation, rather than
within each satellite, yields higher overall reliability, while
reducing the complexity and price of each unit.

     As Craig McCaw explains, "At a certain point, redundant systems
create more complexity and weight than they are worth.  Rather than
having each satellite a 747 in the sky with triply redundant systems,
we have hundreds of satellites that offer self- redundancy."
Eschewing the Hughes philosophy of "every component proprietary to
Hughes," Teledesic will manufacture and launch a large number of
satellite peers, using off-the-shelf parts whenever possible.  This
approach also provides economies of scale that, according to a study
by brilliant pebbles contractor Martin Marietta, could lower unit
costs by a factor of one hundred or more.

     Just as microcosmic technology uses infinitesimal low-powered
transistors and puts them so close together that they work faster than
large high-powered transistors, Teledesic satellites follow the rules
of low and slow.  Rather than one big powerful bird spraying signals
across continents, Teledesic offers 840, programmably targetable at
small localities.  Just 435 miles out, the delay is measured in
milliseconds rather than half-seconds.

     The total computing power and wattage of the constellation seems
large, as is needed to sustain a volume of some two million
connections at a time, four times Spaceway's capacity.  But with other
link features equal, between 1,226 and 3,545 times more power is
needed to communicate with a geostationary satellite than with a LEO.

     Perhaps most important, unlike Iridium, TRW's Odyssey, and
Globalstar, Teledesic from the outset has targeted the fastest-
growing market of the future: communications for the world's 125
million PCs, now growing some 20% a year.  And Teledesic has correctly
chosen the technology needed to extend computer networks
globally_broadband low earth orbit satellites.  The real issue is not
the future of Teledesic but the future of Iridium.

     In the short run Iridium's voice services cannot compete with
Globalstar's cheaper and more robust CDMA system.  But in the long run
Iridium could be trumped by Teledesic.  Although Teledesic has no such
plans, the incremental cost of incorporating an "L" band transceiver
in Teledesic, to perform the Iridium functions for voice, would be
just 10% of Teledesic's total outlays, or less than $ 1 billion
(compared with the $ 3.4 billion initial capital costs of Iridium).
But 840 linked satellites could offer far more cost-effective service
than Iridium's 66.

     Iridium's dilemma is that the complexities and costs of its
ingenious mesh of intersatellite links and switches can be justified
only by offering broadband computer services.  Yet Iridium is a
doggedly narrowband system focused on voice.

     Iridium eventually will have to adopt Teledesic's broadband logic
and architecture.  To protect its global lead in wireless
communications and equipment, Motorola should join with Teledesic now,
rather than later.  Working with Lockheed, Motorola is making
impressive gains in satellite-manufacturing technology.  Supplying
both handsets and space gear for computer networks, Motorola could
turn its huge investment of time, money and prestige in Iridium into a
dramatic global coup in wireless computer services.  As part of a
broadband system, Iridium could still become a superb brand name for
Motorola.  But persisting in a narrowband strategy in the name of
avoiding Teledesic's larger initial costs, Motorola's executives will
end up inflicting serious strategic costs on the company.

     Most of the famous objections to Teledesic are based on ignorance
or misinformation.  Launch anxieties spring chiefly from the GEO
experience.  LEOs are 60 times nearer and between a tenth and a third
the weight.  Teledesic satellites are designed to be hoisted in groups
of eight or more.  From Great Wall in China to Khrunichev in Russia,
companies around the world will soon be competing to supply low-cost
launching facilities for the system.  Orbital Sciences, an entrepreneurial
dervish near Washington's Dulles Airport with some $190 million in
revenues, has developed a low-cost method for lofting groups of LEOs
 from an adapted Lockheed 1011 Tristar.

     Other fears are similarly fallacious.  Teledesic will work fine
in the rain because the high minimum vertical angle (40 degrees) of
its satellite links from the ground reduces the portion of the path
exposed to water to a manageable level.  By contrast, geostationary
satellites must operate at eight degrees, passing the signal through a
long span of atmosphere.  Made of tough new composite materials,
Teledesic satellites will endure the kind of debris found in space
mostly unscathed.  The solar arrays can accept holes without
significantly damaging overall performance.  All in all, Teledesic's
designers expect the birds to remain in orbit for an average of ten
years.  With most of its key technologies plummeting in price along
with the rest of electronic components, the system may well cost even
less and perform better than its business plan promises or George
Fisher speculates.

     Indeed, widely charged with reckless technological presumption,
the designers of Teledesic in fact seem recklessly cautious in their
assumptions about the rate of microchip progress.  For example, their
dismissal of CDMA assumes that the high speed of the spreading code
functions_requiring digital signal processors that race at least 100
times the data rate_pushes cheap T-1 performance far into the future.
Yet in early 1995, Texas Instruments will ship its multimedia video
processor, a marvel that combines four 64-bit DSPs, a 32-bit RISC CPU,
50 kilobytes of on-chip memory, a floating-point unit and a 64bit
direct memory access controller all on one chip.  This device now
performs two billion operations per second and, with an upgrade from
35 megahertz to 50 megahertz clock rate, soon will perform three
billion.  The estimated cost in 1995 is around $ 400, or a stunning $
133 per bop (current Pentiums charge three times as much for 100
mips).  Five years from now, when Teledesic gets serious, that kind of
one-chip computing power can implement CDMA for broadband data without
any cost penalty.  Future generations of CDMA systems may be able to
offer, at a dramatically lower price, the same broadband services in
mobile applications that Teledesic now promises for fixed services
only.

     Assuming that Teledesic meets the CDMA challenge, the other fear
is that terrestrial systems will capture enough of the market to
render Teledesic unprofitable.  This fear, however, can come true only
if governments delay this supremely beneficial system well into the
next century.

     Unlike the competition, satellite systems can provide global
coverage at once.  Whether for $9 billion or $90 billion, no
terrestrial system will cover the entire world, or even the entire
U.S., within decades of Teledesic.  As soon as it is deployed, it will
profoundly change the geography and topography of the globe.  Suddenly
the most remote rural redoubt, beach, or mountain will command
computer communications comparable to urban corporations today.  The
system can make teleconferencing, telecommuting, telemedicine, and
teleschooling possible anywhere.  Gone will be the differences among
regions in access to cultural and information resources.  People will
be able to live and work where they want rather than where
corporations locate them.

     This change transforms the dimensions of the world as decisively
as trains, planes, automobiles, phones and TVs changed them in
previous eras.  It will extend "universal service" more dramatically
than any new law can.

     Moreover, Teledesic can eliminate the need to cross- subsidize
rural customers.  Determining the cost of wire-line services are the
parameters of population density and distance from the central office.
Rural customers now cost between 10 and 30 times as much to serve with
wires as urban customers do.  Teledesic will bring near-broadband
capabilities to everyone in the world at the same price.

     Most important, this expansion of the communications frontier
will foster the very economic development that will fuel the demand
for the service.  Today, it does not pay to bring telecommunications
to poor countries that might benefit most.  Teledesic and other
satellite services break the bottleneck of development. Simultaneously
opening the entire world, it enriches every nation with new capital
exceeding the fruits of all the foreign aid programs of the era.

     Teledesic is a venture worthy of McCaw and Gates.  In its impact
on the world, it may even rival the Herculean contributions of its
sponsors in cellular and software.  The issue is not the technology or
the commitment of the principals.  The issue is the readiness of the
U.S. government to accommodate this venture.  Before Teledesic can be
approved internationally, it will have to attain a license from the
FCC in the U.S.  It has taken four years to approve Iridium.  It took
30 years to approve cellular.  How long will it take to approve
Teledesic?

     Currently Teledesic, Iridium and Globalstar face several
political obstacles.  The International Telecommunications Union's
Radio Regulation 2613 gives GEOs absolute priority over LEOs.  For
Spaceway, Hughes is now demanding an exclusive license for the full
five gigahertz available in the Ka-band worldwide, leaving no room for
Teledesic or any other Ka-band LEO.  Under current law, Hughes or
other GEO systems could usurp any LEO that was launched.

     LEOs are a major American innovation.  The U.S. government should
take the lead now in spearheading a change in the regulations to
accommodate LEOs.  This is no minor matter.  As the dimensions and
promise of Teledesic loom more starkly, the Japanese or Europeans are
certain to make similar proposals.  "When they do," Craig McCaw
predicts, "they will immediately have their government on board.  They
will be able to go to the ITU right away.  My greatest fear is that we
will have the technology all ready, and foreign companies will beat us
out because they can get their governments in line."

     The U.S. government was on board for Apollo 25 years ago and the
U.S. won the first space race.  This space race is just as important,
but the government is treating it as some sleepy-time infrastructure
project.  In fact, it is the information superhighway going global and
ubiquitous.  It is the ultimate promise of the information age, says
McCaw.

SUSTAINING THE U.S. LEAD IN TECHNOLOGY

     McCaw explains: "It'll mean ecological disaster if China mimics
what we did_building more and more urban towers and filling them up
with people who queue up every day on turnpikes into the city,
emitting fumes into the air, and then building new towers and new
highways when you want to move the company, and then digging up the
highways to install new wires."

     McCaw waves toward the window, out at Lake Washington.  "Look at
that floating bridge.  It took $ 1.5 billion to cross Lake Washington,
then it got busted in a storm.  Cross this lake, any lake, any ocean
in the world with broadband wireless.  That's the promise of
Teledesic.  All you do is to reconfigure the communications in
software at zero incremental cost.  No wires for the final
connections.  It's what we do in Hong Kong and Shanghai, where
everyone uses a cellular phone."

     President Clinton, Vice President Gore and other members of the
administration continually ask what they can do for technology.  One
thing they can do is vastly streamline the process for approval of
communications projects.  At the moment, Congress is determined to
retain bureaucratic dominance over the most dynamic enterprise and
technology in the world economy_what they like to term the information
superhighway.  They see it as a possible source of congressional
power, campaign finance, employment and pelf, like the Baby Bells
today or like existing construction projects.  Rather than turn
telecom into a vast porkbellied poverty program, however, the
administration should deregulate the field.  Communications companies
must be permitted to compete and collaborate wherever the technology
leads.

     Whether the administration knows it or not, these technologies
are its greatest political asset.  The high-tech industries unleashed
in the 1980s by venture capital and junk bonds are now the prime fuel
of the economy of the 1990s.  Comprising perhaps 60% of incremental
GDP and 48% of exports, the momentous upsurge of computers and
communications is even compensating for the mistakes of the Bush and
Clinton regimes and making plausible Clinton's continuing claims of
economic success.  But now Clinton, Gore and FCC Chairman Reed Hundt
must make a choice.  If they want to maintain this redemptive U.S.
lead in technology, they must be willing to forge new alliances in
Congress to get the politicians and bureaucrats out of the way of the
future.  A good start would be to open the floodgates for the global
onrush of low earth orbit satellites dedicated to computer
communications.  If they do, they can help make the world, as McCaw's
Alberg puts it, "a truly global Internet in an ever- expanding
ethersphere."

AND THE WINNER IS...

     Globalstar is the easy winner for current offering of mobile
phone services under a CDMA regime of spectrum sharing.  But Teledesic
can add phone services to its broadband computer system.  Over time,
Teledesic's 840 satellites will outperform Globalstar's 48.  Big
question: When will microchip technology advance enough to allow
broadband applications over CDMA?  When that happens, Globalstar has a
shot at the grand prize.

     Iridium is both too expensive to compete in mobile phones and too
narrowband for data.  Today's champ Spaceway is maturing.  Big winner
for the next decade is ... Teledesic.


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