Eutelsat OneWeb: Constellation - General Thread

[ncb1397]

So, how hard would it be to retool the existing 74 satellites as an M2M constellation? Even a single ring of polar satellites would do revisits over every point on earth at least twice a day. Let's say that you need to dump hours of video from a remote sensor over 1000 miles every day or so. You just set up two terminals and when the satellite comes into range, it gets significant bandwidth between the two points? Orbcomm brings in ~$250 million in revenue per year doing something similar with 18 older satellites.

Iridum, currently valued at ~$2.5 billion was sold for $25 million after $5 billion in investment. Somebody could make a lot of money here.

[Asteroza]

How about this scenario; I want to offer my own internet constellation but I was late to the spectrum auction party and got nothing. But, if I buy the OW spectrum at a reasonable price and then continue to finance the JV to build out the constellation to maintain the rights, then I can begin to design & build my own system to utilize that spectrum. Then I transition from the OW design to mine. The money spent is my payment to secure the required spectrum and maybe along the way the DARPA Blackjack project might lead to some business to recoup that cost, or just shut it down. Either way, I have secured the needed spectrum for my project.

The most useful and valuable asset that OW has to someone wanting to start their own constellation is that spectrum. It will be easy to request changes to an existing license, just ask StarLink.

The mention of DARPA Blackjack piqued my interest.

Is there an outside possibility of US DoD purchase, either through something sneaky via DARPA, or as part of some fast acquisition authority within DoD?

It seems exceedingly unlikely to me, for many reasons.

1. Congress would have to fund it.  Getting Congress to cough up billions is not trivial.
2. It's government interference in the private sector.  In the US, there's a lot of sentiment against that.  You have a case where there is at least one other strong competitor.  It would be hard to fight the narrative that it's unfair to SpaceX and the other companies that are trying to compete in this market to have the US government intervene to help a competitor that failed.
3. OneWeb is primarily European.  The satellites are assembled in the US by a joint venture, but they were developed in Europe and were being launched primarily by the Europeans.  The company is headquartered in the UK.  All of that makes it a much harder sell than to have the US save a company that is really native to the US.
4. OneWeb isn't unique.  The US DoD is already working with Starlink, Iridium, and others for communication services.  It's hard to argue that there's a critical national security need for LEO communications by the DoD when it could be met by expanding the work with those other companies.
5. OneWeb has a bent-pipe architecture.  Starlink has that too for now, but they're planning to upgrade to use inter-satellite links, which OneWeb has no roadmap to do.  Bent-pipe is obviously much less interesting for national security applications than a system in which the communications never have to touch the ground except at the endpoints.

I fully appreciate this is a very outside scenario but...

Part of what kept Iridium alive post-bankruptcy was US government bulk purchases (though that wasn't a buyout per se). Since the OneWeb satellites are manufactured by the local JV (which ostensibly is somewhat independent), Blackjack continuing to purchases buses seems feasible on it's own (and the OneWeb derived earth observation constellation had a rudimentary plan to stick 4 telescopes on each of the buses, as an example of payload flexibility), but that doesn't really help with ground terminals/gateways per se. There is a regional high bandwidth comms need for the military to connect BLoS groups in the same operating theater that a bent pipe system might be able to service quite well ("ground" terminals primarily being BACN gateways).

Though the scenario I see is more of a nationalization move, rather than a private company bailout, as any such acquisition would effectively move it from the private commercial to government realm. Ostensibly in that case, the only company currently that would face a level of interference as a private commercial competitor for equivalent services would be Starlink itself. While Musk is willing to cooperate with DoD (such as the Blackjack demos), he is not inclined to be beholdened to DoD either (he'll take their money but won't chase them). He knows how much of a tarpit DoD can be.

[gongora]

Blackjack is not a huge contract, it's a demo constellation.  SDA is already about to put out an RFP for the beginnings of an operational constellation, and they can do just fine without OneWeb.

[ChrisWilson68]

Though the scenario I see is more of a nationalization move, rather than a private company bailout, as any such acquisition would effectively move it from the private commercial to government realm.

Nationalization of a company by the US federal government is extremely rare, for any reason.  And it's just gotten less common in the modern era.  The last time I can think of that it happened was 1971 when Amtrak was created to prop up the remaining failing US passenger train service.  That was a case of the government not wanting to have a major piece of existing transportation infrastructure, serving many rural communities (think voters) cease to exist.

None of that is the case for OneWeb.  It's not existing infrastructure.  It's just a project that is far from being operational, and it would provide a service that other companies are also either already providing or working to provide.

Plus, this is not 1971.  Outside of the Bernie Sanders crowd, the idea of the US government taking ownership of any part of the private sector is extremely unpopular today.  And the party in control of the executive and part of the legislative branch is the party of small government.

[TrevorMonty]

Though the scenario I see is more of a nationalization move, rather than a private company bailout, as any such acquisition would effectively move it from the private commercial to government realm.

Nationalization of a company by the US federal government is extremely rare, for any reason.  And it's just gotten less common in the modern era.  The last time I can think of that it happened was 1971 when Amtrak was created to prop up the remaining failing US passenger train service.  That was a case of the government not wanting to have a major piece of existing transportation infrastructure, serving many rural communities (think voters) cease to exist.

None of that is the case for OneWeb.  It's not existing infrastructure.  It's just a project that is far from being operational, and it would provide a service that other companies are also either already providing or working to provide.

Plus, this is not 1971.  Outside of the Bernie Sanders crowd, the idea of the US government taking ownership of any part of the private sector is extremely unpopular today.  And the party in control of the executive and part of the legislative branch is the party of small government.

OneWeb isn't solely US company, madeup from investors all around world. Why bailout overseas investors.

Boeing is one case where nationalization could be justified given their strategic importance to US government, especially in  defense and aerospace.

[niwax]

5. OneWeb has a bent-pipe architecture.  Starlink has that too for now, but they're planning to upgrade to use inter-satellite links, which OneWeb has no roadmap to do.  Bent-pipe is obviously much less interesting for national security applications than a system in which the communications never have to touch the ground except at the endpoints.

OneWeb somewhat shot themselves in the foot in regards to building out capabilities with their satellite design. As someone explained further upthread, their satellites are fairly dumb analog relays. That means a user terminal talks transparently to a base station which decodes its signals. It would be incredibly complicated to integrate the satellites into another constellation or add features like inter-satellite links. No existing part of the system assumes anything but a direct analog connection between terminals and base stations with the precise specifications set by the OneWeb design.

I don't think another operator would want to burden themselves with those decisions. Starlink, for example, uses a fully digital architecture where the satellite decodes packets received by base stations and terminals and then routes them using an IP-derived protocol. Just like the internet, this allows flexible upgrades in features and generations.

[vsatman]

... Starlink, for example, uses a fully digital architecture where the satellite decodes packets received by base stations and terminals and then routes them using an IP-derived protocol. Just like the internet, this allows flexible upgrades in features and generations.

//where the satellite decodes packets received by base stations and terminals
it is very interesting for me. It is very unusual for existing satellite networks with small user terminal. Where can I read more about this?  Do you have a Link?

[ChrisWilson68]

One last thing to consider; who else has a hot production line of satellite buses and is willing to work with the DoD?

SpaceX.

And yet I don't see the DoD running to SpaceX asking for large numbers of custom satellites to be built.  Neither did the DoD do this with OneWeb before they declared bankruptcy.

The DoD has had some exploratory programs looking into the possibility of someday using constellations of small satellites for various purposes.  That's a long way from deciding to pull the trigger and actually build such a system.

The US defense department doesn't move quickly.  They spend time evaluating a need for a new direction.  Usually, there is a big fight with those in the department with a vested interest in doing things the old way.  If they decide to move forward, they go to Congress for funding for a prototype system.  Later they go back to Congress to fund an operational system.

To have any effect on the OneWeb bankruptcy, a program would suddenly have to go through Congressional committees to get to the full House and Senate, get passed in both chambers, and get signed by the President.  That just doesn't happen.  And right now Congress isn't in session and won't be back for several weeks to even begin the process.  All at a time when Congress is preoccupied with a huge crisis.

And, even if the DoD did decide to build a huge constellation of LEO satellites tomorrow and get funded by Congress the next day, we still shouldn't expect that they'd just take the OneWeb bus off-the-shelf.  It's not the way the DoD generally works.  They generally have contractors come up with customized designs, and for a big contract like that lots of contractors with long histories of working with the DoD would be likely to come up with proposals and have a leg up on OneWeb.

It just seems incredibly implausible that the US DoD is going to save OneWeb.

If any government is going to save the remains of OneWeb, it will be the French government, because the satellites were designed by Airbus and most were set to be launched by Ariane, plus the fact that the French government is much more inclined to have the government intervene directly to save high-profile companies, particularly in aerospace.  I'm not saying that's likely, but it's about a thousand times more likely than the US government doing it.

[niwax]

... Starlink, for example, uses a fully digital architecture where the satellite decodes packets received by base stations and terminals and then routes them using an IP-derived protocol. Just like the internet, this allows flexible upgrades in features and generations.

//where the satellite decodes packets received by base stations and terminals
it is very interesting for me. It is very unusual for existing satellite networks with small user terminal. Where can I read more about this?  Do you have a Link?

The usual sources have offered vague descriptions. It's some form of (not really-)IP peer-to-peer network.

https://twitter.com/elonmusk/status/967712110661615616
https://twitter.com/elonmusk/status/967728299282595840

[TorenAltair]

Oneweb FCC request
https://fcc.report/IBFS/SAT-MOD-20200406-00031

[ChrisWilson68]

Oneweb FCC request
https://fcc.report/IBFS/SAT-MOD-20200406-00031

The key points from the filing:

Subsequent to the Chapter 11 bankruptcy filing, the earth station licenses, market access grant, and experimental licenses granted to OneWeb are held by OneWeb DIP.  Other than the fact that OneWeb is now operating as a debtor in possession,
there is no change to the ownership or control of OneWeb as a result of the Chapter 11 bankruptcy filing.

grant of the instant application would serve the public interest by allowing OneWeb to retain its Commission licenses and authorizations as it undergoes the restructuring process described herein and would be consistent with Commission treatment of previous satellite-related Chapter 11 bankruptcy proceedings.

[Rondaz]

.@QuiltyAnalytics predicts OneWeb's assets: satellites, launch prepayments, landing rights, gateways, OneWeb Satellites (50 % stake), patents, technology, designs, partnerships, & spectrum will be sold

https://twitter.com/larrypress/status/1248719399650881536

[zubenelgenubi]

Cross-post:

Some tweets from anik from today
All Google translation
https://twitter.com/anik1982space/status/1248623503969931264

Rogozin: “In connection with the spread of coronavirus infection and the bankruptcy of OneWeb, we estimated that there were at least nine launches in the risk zone”

[Rondaz]

To be clear, this $300M DIP is $75M in new money to cover expenses and then conversion of another $225M in prepetition secured debt. It sets a high benchmark for any bidder at auction so could all go badly wrong

https://twitter.com/TMFAssociates/status/1249048835856334848

[Rondaz]

In a court filing from 10 April @OneWeb seeks authorization for a DIP facility of ≤$300m ($75m New Money) from @SoftBank_Group to fund operating expenses and "a competitive and robust process to consummate [...] sales involving assets or equity interests"

https://twitter.com/Megaconstellati/status/1249073973440249856

[Steven Pietrobon]

For those not in the finance world like me, DIP means Debtor In Possession, PIK means Payment In Kind, PE is Private Equity and SFTBY is the stock name for SoftBank Group Corporation.

[Redclaws]

It’s good to have the terms, but can anyone explain what this likely means?  Is SoftBank just a bidder in the bankruptcy?  If so, does anyone have a sense if their intention is to continue the OneWeb business as is, or do they appear to be planning to sell whatever bits have value?

[ChrisWilson68]

It’s good to have the terms, but can anyone explain what this likely means?  Is SoftBank just a bidder in the bankruptcy?  If so, does anyone have a sense if their intention is to continue the OneWeb business as is, or do they appear to be planning to sell whatever bits have value?

It doesn't really mean anything in terms of whether Softbank is a bidder in the bankruptcy.

When a company files for bankruptcy, it's saying that it owes money and it's having trouble paying what it owes.  It files bankruptcy to make the process of paying back what it owes as orderly as possible.  If it doesn't file for bankruptcy, various creditors might file suit to make it pay and/or start seizing the company's assets.  That could benefit some creditors at the expense of others, and could hurt the creditors overall by having the company's ability to continue operating put into jeopardy.

When a company files for bankruptcy, it is supposed to be doing its best to pay all the parties it owes money to as much as it can and distribute that money as fairly as possible.  A judge oversees the process to make sure the company is doing that.  The company needs permission from the judge for any big decisions.

When filing for bankruptcy, the company has two options: Chapter 7 and Chapter 11.  If the company files for Chapter 7, it's saying that it's just going to lose more money if it keeps in business, so the best way to pay as much as possible to the parties it owes money to is to just immediately auction off all its assets and split the money among the creditors.

If, on the other hand, it files for Chapter 11, the company is saying that it's better for the creditors if the company continues to operate in a way intended to maximize value for creditors.  If the company's problem was just that it had huge loan payments it couldn't make but the revenue it has coming in is more than its operating expenses, then the company would continue to operate as close to normally as possible in Chapter 11.

In other cases, the company doesn't have enough money coming in to cover its operating expenses, but it still files Chapter 11 because it claims that by operating in some capacity it can still get more money in the end for creditors.  That's the situation OneWeb is in.  It has essentially zero money coming in.  But if it just entirely stopped operations immediately, some of its assets would lose value.  Those satellites in orbit need someone controlling them.  Ground stations need to be maintained to some minimum level.  The company laid off all the staff not needed to maintain the value of those assets, but it keeps some on and continues to pay for utilities and such at its operations center to control the satellites.

In that situation, the company needs some more money in the short term to give more back to creditors in the longer term.  But where can it get that money it needs in the short term?  Nobody's going to give the company money under normal terms when it's bankrupt because they probably wouldn't get all of it back.  They would just be benefiting the other creditors.

That's where debtor-in-possession financing comes in.  It means that after the company has filed for Chapter 11, it gets a special kind of loan just for companies in Chapter 11.  This loan has priority to be repaid before any of the pre-Chapter 11 loans.  The idea is that they get the loan now, they use it to continue operations of some sort until they can generate more money, pay back the debtor-in-possession loan, and use whatever other money they've generated to pay off the other creditors.

In the case of OneWeb, the debtor-in-possession financing is coming from Softbank.  In theory, it could come from anyone, but it's often from a company that already has dealings with the company in Chapter 11.  Softbank has incentive to make the DiP loan to OneWeb because if they can keep OneWeb operational, they hope that it can sell off its assets and Softbank can then get more when the remaining money is divided up.

It's worth notiing the high interest rate on this loan from Softbank to OneWeb.  The high interest reflects the risk.  It could be that OneWeb will burn through that money keeping their satellites operating and their infrastructure in place just to find that when they sell off their assets, nobody is buying.  Softbank might end up getting nothing back.  But they're betting that it's more likely that by letting OneWeb maintain their assets and go out and talk to potential buyers that they'll end up getting more money for the assets than the loan amount.  Then the loan amount will be paid off in full to Softbank.  Ideally for Softbank, there's then enough money left over to pay off all the other people who are owed in full and then divide up the remainder among stockholders, including Softbank.

Another reason that it makes sense that it's Softbank instead of some random bank making this DiP loan is that Softbank is already very familiar with OneWeb.  A random outside party would have to do a lot of work to assess the risk to making this loan.

So, it's not really surprising that Softbank made this DiP loan to OneWeb.  Similar things often happen in Chapter 11 bankruptcy cases.  It also wouldn't be that surprising if some third party that specializes in DiP financing made the loan.

It doesn't mean that Softbank is going to bid for the remains of the company.  It doesn't mean that they aren't.  Either way, there are all kinds of reasons for Softbank to be involved in this way.

[lykos]

It’s good to have the terms, but can anyone explain what this likely means?  Is SoftBank just a bidder in the bankruptcy?  If so, does anyone have a sense if their intention is to continue the OneWeb business as is, or do they appear to be planning to sell whatever bits have value?

It doesn't really mean anything in terms of whether Softbank is a bidder in the bankruptcy.

When a company files for bankruptcy, it's saying that it owes money and it's having trouble paying what it owes.  It files bankruptcy to make the process of paying back what it owes as orderly as possible.  If it doesn't file for bankruptcy, various creditors might file suit to make it pay ....................

Very good explanation ! First time I realy understood the meaning of  *7* and   *11* !!
Thank you very much !
W

[Rondaz]

Exclusive in today’s @telebusiness: OneWeb, the UK satellite start-up, has appealed to the Government for a rescue loan and offered to move the bulk of its ops from Florida to Britain'

https://twitter.com/matthfield/status/1249277198533525504