Quebec invests $400-million into satellite program with goal of bringing high-speed internet to rural Canada

The government of Quebec is investing $400 million into Telesat’s satellite network that aims to bring high-speed internet connections to remote and rural areas in Canada.

The province signed a memorandum of understanding with the satellite manufacturer Telesat last week, agreeing to $200 million as a grant and $200 million as preferred equity. Headquartered in Ottawa, the company is partnering with MDA — the makers of the Canadarm — to design and manufacture specialized phased array antennas at its facility in Ste-Anne-de-Bellevue, Que.

Stephen Hampton, Telesat’s government affairs manager, said the pre-existing aerospace expertise and infrastructure in Quebec made it a strong option for their base of operations. “When we're looking at expanding operations significantly, having that pipeline of talent is so key,” Hampton said in an interview with Research Money.

In total, the deal is expected to bring $1.8 billion of investment into Quebec, including 320 jobs for a Telesat operations centre in Gatineau and 280 jobs for MDA Montreal. Telesat plans to begin launching the first Lightspeed satellites built in Quebec in about two years, according to Hampton. The French-Italian company Thales Alenia Space will be responsible for the final assembly and manufacturing of the satellites in Quebec.

Quebec’s Minister of Economy and Innovation Pierre Fitzgibbon said Quebec has built a significant aerospace cluster over the past three decades that now represents half of sales and more than 70 per cent of total aerospace R&D in Canada. Space technology will be a “second leg” for the aerospace sector as the first leg — represented by major airplane manufacturers such as Bombardier and Airbus — will be difficult to position as the world recovers from the COVID pandemic, he noted.

“Given that the first leg is going to be facing headwinds for the next 18 months, it’s a good complement to our strategy,” Fitzgibbon said in an interview with Research Money.

Canadian governments have brought a new focus on space technology over the last two years. MDA returned to Canadian control last year, and since signed a contract with the Canadian Space Agency to design a third Canadarm, Canadarm3, in December. In 2019, the Trudeau government announced a $2.05-billion investment over the next 24 years to fund Canada’s role in the Lunar Gateway program. Led by NASA, the mission will establish a space station orbiting the moon that they hope to be a stepping stone for missions to Mars.

Funding from Quebec is contingent on the finalization of Ottawa's funding  contribution, Fitzgibbon said. “Given that we made the announcement, our level of comfort that the deal will happen is high," he added.

Low-earth orbit satellites could bring faster internet speeds to remote areas

In 2019, the federal government promised to provide speeds of 50 Mbps upload and 10 Mbps download for 95 percent of the Canadian population by 2026 and 100 percent by 2030 (see the plan here). A 2018 report found that only around 41 percent of rural households had access to broadband internet at those speeds.

Telesat’s new satellite constellation, if realized, promises to provide broader access to high-speed internet. The federal government finalized a $600 million investment into Telesat in November last year to reduce the rates for service providers to connect to Telesat’s satellite network.

Traditional communications satellites are geosynchronous equatorial orbit (GEO) satellites that orbit the earth more than 35,000 kilometres above the equator. Their orbital speed exactly matches the rotation speed of the Earth, so that to an antenna on the ground the satellite remains stationary and the antenna doesn't have to track the satellite to continue receiving transmissions. Because of their distance from the Earth, GEO satellites cover a large area of the Earth and as few as three satellites spaced equal distances apart can provide global coverage. The downside is that the large distance creates a round-trip delay, or latency.

“If you want two-way, interactive broadband, the time it takes to go from the earth to the satellite and back is just a little less than a second,” Hampton explained. It may not seem like a lot of time, but it starts adding up, especially on data-intensive websites like news, banking and healthcare websites. “The only way to fix this lag, or latency, is to bring the satellites much closer to the earth.”

Telesat is building a constellation of 298 satellites at lower orbit — about 1,000 kilometres above the earth — that it is calling the Lightspeed Network. The first satellite was launched in January 2018 as a demonstration, and the low-latency connection has since been tested with the US Department of the Navy and companies like Vodafone and Motorola. The latency is between 30-50 milliseconds, much lower than GEO satellites that have an average latency of around 600 milliseconds.

Telesat plans on bringing service to northern Canada by the end of 2023 and full global coverage by 2024, according to Hampton. “We’re looking at extending mobile networks into more remote areas. We’re looking at connecting planes, connecting ships, as well as government services like first responders,” he said.

Other companies are also racing to develop their own LEO networks. SpaceX, for example, is developing its own satellite constellation called Starlink that has more than 800 satellites in orbit.

5G spectrum proposal is pending

Telesat is lobbying the Canadian government to compensate them for vacating the 3800 MHz, or “mid-band,” spectrum to allow 5G service providers to use those frequencies. The US offered a total of $9.7 billion to satellite providers to vacate mid-band spectrums by 2023, two years earlier than the deadline of 2025. There has since been a spectrum auction that brought in bids for licenses totalling more than $80.9 billion.

Telesat is asking for a similar agreement in Canada to cover the expenses of quickly vacating the spectrum. Innovation, Science and Economic Development Canada has proposed a clearing date in December 2023 for satellite operators, but has not made a decision on compensation.

“We’ve put forward a proposal on the public record, in a public proceeding, to clear the spectrum and said we would invest all funds from that process into LEO Lightspeed and other satellite facilities,” said Hampton. He says the proposal is pending with the federal government, however, and that no timeline has been provided.

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