January 22nd, 2021 by Steve Hanley
Bringing internet access to the world is a dream for many entrepreneurs. Partly it is driven by a humanitarian desire to bring everyone into the digital conversation and partly it is driven by the quest for profits. Even tiny monthly payments from billions of people could add up to strong cash flow. Business is business, after all, and the secret to any successful business is getting customers to open their wallets and transfer some of their available cash to you.
But if there is no clear path to making a profit, some business opportunities never are pursued, even if they would benefit millions of people. That’s why many national governments fund basic research, to do the heavy lifting needed to overcome the hurdles that stand between a good idea and commercial success. In the US, that kind of research at national laboratories like the National Renewable Energy Lab and funding from government programs such as ARPA – E has helped slash the cost of renewable energy over the past 10 years, giving the nation a chance to meet its carbon reduction goals.
Some tech companies have accumulated so much wealth they can now afford to fund radical new ideas themselves without government support. Over the past decade Google, now called Alphabet, has put millions into its X research lab, which is designed to explore the commercial possibilities of new “moon shot” technologies. Waymo, which is pursuing the field of self driving cars, is one company created by such research. Another is Dandelion, which has pioneered new geothermal technologies for heating and cooling buildings.
A Google venture you may never have heard of is the somewhat unfortunately named Loon, an attempt to bring internet access to underserved communities using high altitude balloons. In theory, the idea sounds appealing but it hasn’t worked well in practice. Now, economic realities have taken the air out of Loon’s balloon, causing Google to ground it permanently.
“The road to commercial viability has proven much longer and riskier than hoped. So we’ve made the difficult decision to close down Loon,” Astro Teller, who heads X, wrote in a blog post. According to the New York Times, the idea behind Loon was to bring cellular connectivity to remote parts of the world where building a traditional mobile network would be too difficult and too costly. Alphabet promoted the technology as a potentially promising way to bring internet connectivity to not just the “next billion” consumers but the “last billion.”
Looking much like the giant weather balloons climate scientists use to explore the upper atmosphere, the helium filled balloons for the Loon project were powered by solar panels and used artificial intelligence to guide them. These “floating cell towers” would transmit internet signals to ground stations and personal devices.
The first commercial use of the technology took place last year. In conjunction with Telkom Kenya, the balloons were deployed to provide a 4G LTE network connection to a 31,000 square mile area across central and western Kenya, including the capital city of Nairobi. Prior to that, they had been used only in emergency situations, such as when they helped provide cellular service to Puerto Rico after Hurricane Maria.
But the business case for Loon has not materialized and there is competition from other companies such as Starlink from SpaceX and Blue Origin from Amazon, both of which will rely on thousands of small satellites in low earth orbit to bring internet to places where traditional internet service is not currently available. Loon was a good idea that just wasn’t commercially viable. Google should be applauded for trying.
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