Climate change threat to Internet cables might boost demand for nano satellites and laser beam technologies
August 8, 2018 | Blog

Climate change threat to Internet cables might boost demand for nano satellites and laser beam technologies

Criminals, terrorists, and hostile nations could no doubt wreak havoc on cyberspace today. But the greatest long-term threat to the Internet is not human but rather Mother Nature.

I’m specifically referring to climate change. As the world continues to heat because of greenhouse gas emissions, coastal flooding from storms and rising sea levels will destroy the equipment needed to make the Internet run, according to a recent study by researchers at the University of Wisconsin and University of Oregon.

“With significant sea level rise predicted, it is important to assess the threat to communication infrastructure,” the study said. “An indication of the potential impacts are the storm surges of major hurricanes such as Katrina and Sandy that devastated communication systems.”

“While the standard buried fiber conduits are designed to be water and weather resistant, most of the deployed conduits are not designed to be under water permanently.”

The study identified major coastal cities in the United States, including New York, San Francisco, Miami, and Houston, as particularly vulnerable to breaking the Internet because they host landing stations, data centers, and IXPs (Internet Exchange Points).

Over the next 15 years, over 1,186 miles of long-haul fiber conduit, which is mostly underground, and 2,429 miles of metro fiber conduit will be underwater, researchers estimated. And 1,101 termination points (where someone’s phone or data connects to an office or building) will be surrounded by sea water.

Furthermore, over 99 percent of the world’s Internet traffic flows through cables stretched along the bottom of oceans. One can only presume that storms and rough seas will make it harder to install, or repair those fiber optic lines. These vulnerabilities come at a time when we are becoming even more dependent on the Internet. In addition to buying stuff on Amazon or watching Netflix shows, countries are already deploying next generation 5G service and Internet of Things technology, in which watches and coffee makers to autonomous cars communicate via cyberspace.

But like highways and bridges, we have not invested the massive amounts of money needed to upgrade our Internet infrastructure to handle such online stress, never mind withstand a hurricane or flood.

With that said, here are 3 alternative technologies that can provide Internet service.

These technologies, including nanosatellites and Internet balloons, probably won’t completely replace fiber optic lines and cables. Indeed, most of them were originally intended to provide Internet access to rural regions, geographically inaccessible areas like mountains and forests, or developing countries that lack modern equipment. However, these emerging markets offer a good place to test these technologies before coming to the United States.

And given the threat of climate change, those geographically inaccessible areas might very well soon turn out to be San Francisco or New York.

Satellites Beaming Internet access from outer space is hardly a new idea. But there are few reasons why the technology never caught on. One, it’s pretty expensive to launch a satellite. Second, clouds or bad weather can make it hard for a signal to pass through. As a result, latency, the amount of time it takes for data to travel roundtrip, is pretty high.

Enter nanosatellites or “nanosats.” They can fit in your hand and weigh 2 to 22 pounds. While a regular satellite costs about $2 million to build, nanostats cost about tens of thousands of dollars a pop. Imagine fleets of these devices floating above the atmosphere transmitting and receiving digital data.

“As more and more nanosatellites are sent to space by universities, tech companies, government entities, and private citizens alike, they’ll provide comprehensive ‘coverage’ of Earth at an incredibly low cost – leading to game-changing transformations,” according to a report by CB Insights research firm.

Iridium Communications and Teledesic tried such technologies but both companies were commercial failures.

However, in March, the Federal Communications Commission granted SpaceX, the unicorn founded by Elon Musk, a license to operate a constellation of 12,000 mini-satellites in very low orbit around the Earth. By orbiting between 684 miles to 823 miles in the air versus the standard 22,000 miles for a regular satellite, SpaceX microsatellites can reduce latency and thus provide more reliable Internet service. OneWeb, Telesat, and Space Norway have also received similar FCC licenses.

Australian company Sky and Space (SAS) is also planning to provide telecommunications coverage to millions of people living in a band around the equator – stretching from Darwin to Hong Kong – by 2020. SAS will partner with Virgin Galactic to launch 200 nano-satellites into space beginning this year.

Internet balloons Alphabet, the parent company of Google, has been working on high altitude balloons to provide Internet service to African countries like Kenya. The balloons float between 11 and 16 miles in the sky and use radios to link to volleyball-sized antennas mounted on homes or businesses.

Fixed Wireless Private firms like Starry Wireless, Veniam, and Optipulse are developing ways to access the Internet by using infrared laser beams instead of cables or fiber optics to transmit data between two fixed points like a building and a radio cell tower.

Facebook had been exploring this technology with high altitude drones beaming the lasers to fixed points from the sky but recently discontinued the project.

Alphabet has rolled out its fixed wireless service, called WebPass, to 9 cities, including Seattle and Denver.

Category Company Name Recent Developments
Nano Satellites SpaceX Launched mini satellites in June 2018 as part of a planned global Internet service
Astranis Received $13.5 million in funding from Andreessen Horowitz, BoxGroup and Lux Capital
Sky & Space Successfully completed test with Globalsat, a consortium of companies providing satellite communications services all over the Western Hemisphere
Internet Balloons Google/Alphabet Provided Internet access to Puerto Rico after Hurricane Maria
Fixed Wireless Starry Wireless Recently launched service in Los Angeles and Washington, DC
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Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice.

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Thomas Lee

Thomas Lee

Thomas Lee is the Senior Writer at SharesPost. He was previously a business columnist at the San Francisco Chronicle. Lee has written for the Star Tribune in Minneapolis, St. Louis Post-Dispatch, and Seattle Times. He is author of “Rebuilding Empires” (St. Martin's Press), his book on the future of big box retail in the digital age.
PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

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This report is being published by SharesPost Research LLC, and distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation and SP Investments Management, LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers, and that no part of such analyst compensation was, is, or will be, directly or indirectly related to the specific views contained in this report.

Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst, including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.