On a cold winter night, a mother driving with her children loses control of her car, plows off the road and crunches into a rock. Everyone is belted in, so injuries are minor. But the car is damaged and stuck, and help is miles away.

A fierce tornado tears up a small town. Homes and businesses are smashed, phone and power poles down. Many people are hurt, several are critically injured.

A Border Patrol officer spots suspicious activity in a remote area. Shadowy figures are sneaking into the country...illegal immigrants, maybe terrorists. He'll need backup.

These scenarios share one critically important need: fast, reliable communications. Injured victims, witnesses, emergency responders, medical personnel, family members and media of all types will be trying to communicate to and from the affected areas.

And--as so many discovered to their dismay on Sept. 11, 2001--the cellular phones on which most of us rely may not do the job. Transmitting towers, switches and land lines may be down, and the sudden overload ("surge") of thousands of simultaneous calls may bog down or crash terrestrial systems. And cellular service is not even available in many remote areas.

What is the answer to cellular's remaining weaknesses? Reliable, affordable satellite-based telecommunications.

A New North American System

The U.S. Federal Communications Commission (FCC) recently ruled that mobile satellite operators can also provide terrestrial wireless services for "ubiquitous" (available everywhere) coverage and awarded Boeing Satellite Systems the frequencies needed for such a system. This enables Boeing to build a telecommunications satellite system that is fully interoperable with terrestrial wireless networks. A two-satellite system (one primary, one backup) will provide complete coverage for the U.S., Canada and Mexico.

One of the first and most important applications will be to enhance the fast-growing field of automotive telematics, which combines the mobility provided by the automobile with the connectivity of modern communications. Systems such as GM's OnStar already provide personal security and driving support, navigation and traffic information, accident and breakdown notification, vehicle telediagnostics and repair, theft protection and vehicle tracking, remote unlocking service and additional services to millions of customers nationwide. Additional telematics applications that will benefit greatly from anytime, anywhere connectivity include fleet management for large commercial vehicle fleets and fail-safe communications for emergency first-responders, the U.S. Border Patrol and Homeland Security.

The third-generation (3G) satellite system Boeing is currently designing and planning to launch in about three years to serve North America is the next step beyond Thuraya, its first GEO-mobile telecommunications satellite system. Thuraya includes a GPS receiver in its handset and can transmit data at 144 kilobytes per second, three times the rate of land-based phone modems. "We can leverage from what we've already done and take that design to the next generation," says Boeing Satellite Systems (BSS) Senior Vice President Charles Toups.

Boeing believes it has a lot to offer the automotive telematics industry by bringing satellite capability to augment terrestrial systems. "OnStar, for example, operates off a terrestrial system," Toups says. "Satellites will be an excellent complement to that because they will provide ubiquitous coverage across the U.S. or, in fact, all of North America. It would be very expensive to build a terrestrial system to cover all of that area."

Satellites will also provide surge capability. "If you're in an area where the terrestrial systems are overwhelmed," Toups says, "you can have a satellite system smart enough that the telematics in your vehicle will uplink to it. Whether it's in a dense urban area or the middle of nowhere, you will have assured connectivity."

Toups points out that his wife's car has OnStar, and he appreciates the security it provides. "And the more robust that system is," he says, "the more value it will provide. OnStar--and others such as ATX, which supports Nissan, Infiniti and a few others--can continue to evolve in terms of what applications and services they provide, and we can evolve along with them. We're not trying to create our own telematics system; we're working to create a system that complements and enhances the connectivity of existing systems. We see this as a natural extension."

Partnerships

Availability for '06-model vehicles will depend on completion of partnership agreements with telecommunications companies ("telcos"), automakers, suppliers, handset makers, chip builders and others by mid-2003. "It takes about two and a half years to develop a new satellite and three to four years to have it up and running," Toups explains. "We have a major design review this July, and we're working very aggressively to put this together by then."

Designing, developing and launching this very robust two-satellite system will cost about $2 billion. Partners in the venture--who might also be owners, depending on their agreements and contributions--could include a variety of companies that stand to benefit and profit from it:

Automakers-One or a group of original equipment manufacturers (QEMs) could market ubiquitous connectivity to consumers as a competitive advantage and eventually offer it to other QEMs, as GM has with OnStar. "Would I be willing to pay a few extra bucks to know that when my wife is out with my family she has guaranteed access if something happens?" Toups asks. "I would sign up for that in a heartbeat. I really think it will be an advantage that will influence purchasing decisions." QEMs might also want to sell it to fleet customers as a fleet management tool for scheduling, dispatching, routing, even service and maintenance, and as fail-safe communications in many thousands of emergency vehicles.

Suppliers--Companies that build components for onboard telematics should be very interested in getting on board. "When DIRECTV started, RCA had an agreement to develop and build a large number of the receivers before Sony and others could make them," Toups points out. "We certainly should have strategic suppliers who want to hook up and get the competitive advantage, help set the standard and influence where it's going."

Telecommunications companies-"We have been talking to a number of telcos," Toups says. "It could be several, or one may want to do the whole thing with us and be the only one."

Handset makers, chip makers, etc.--"The potential market is huge, so when you have that big a market, you will have companies who want to be part of the original partnership."

The Federal Government-What if Homeland Security wanted fail-safe mobile communications in all of its vehicles, including the fighter jets that go up in crisis situations? What if the Border Patrol wanted OnStar in all of its vehicles? "There are a lot of borders, including the Michigan/Canada border, where telcos are forbidden to install towers," says Toups. "The satellite could fill those holes. The Federal Government doesn't tend to put money into commercial ventures like this," he adds. "But they do buy time later."

Partnership agreements would vary depending on what each player brings to the table and what it expects from the deal. Automakers and suppliers might contribute--some investment up front, some down the road--based on exclusivity and expected volume. "There are different ways to do it," Toups explains. "You can structure a partnership where the investors are the owners. Another capability that Boeing brings to the table is Boeing Capital Corp., which can provide financing to partners who invest and are committed to the system."

One of the key factors that will make this venture successful where others have failed is that the satellites will be in geosynchronous orbit--a 24-hour orbit that keeps them in exactly the same spot relative to Earth. Boeing's DIRECTV satellites are geosynchronous, as are Boeing's XM Radio and Thuraya satellites. "It's a much more cost-effective way to provide satellite service," Toups asserts. "We're the pioneers and leaders in geosynchronous satellites, we've been doing it for 40 years, and we have more than 150 satellites in geosynchronous orbit today."

Another of Boeing's strengths is system integration of "network-centric" operations, including signal processing and security. "It's not just a box in the car and a satellite," Toups explains. "It's the whole system, how you put it together, the software and processing power that make the network work. The expertise we have from our government business--in which Boeing is extremely strong--coupled with our commercial expertise give us a tremendous advantage in designing, building and launching this system."

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