Outernet is getting a lot of hype about its promise to deliver "unrestricted, globally accessible, broadcast data, quality content from all over the Internet, available to all of humanity, for free," as stated on its website.  These are great sound bites, but things like "no cost" and quotes out of the Universal Declaration of Human Rights don't pay the bills.

Don't get me wrong, I love CubeSats as much as the next guy. I also spent time between 1997 and 2001 promoting a satellite broadcast scheme first called SkyCache and later renamed to Cidera, so I've got a handle on the physics, economics, and capital costs involved, be it with big satellites or small ones.

The Outernet model appears to be based upon a scheme of about 160 "3U" (30 cm x 10 cm x 10 cm) Cubesats in low earth orbit.  Each satellite will multicast (one way broadcast) information in some fashion, which may or may not be 802.11Wi-Fi compliant, depending on whatever unspecified "tests" happen if they can get the technology up to the International Space Station (ISS) for a workout.

Assuming all the radio frequency issues can be worked out and a prototype can be demonstrated on ISS by September – which would assume they can get hardware flight qualified and in the queue in record smoking time – there is the not-so-little problem of putting hundreds of CubeSats into orbit.  They say they can do so by 2015, with a lot of poor handwaving on the economics side.

Getting to orbit is where Outernet demonstrates it doesn't know what it is talking about. Or, its public spokesperson is being grotesquely misquoted.

Launch vehicles are expensive. Rockets are not cranked out like Fords or Chevys, sitting around on Joe's Orbital Lot ready to be purchased for a trip to low Earth orbit (LEO).  Contracts are signed a couple of years in advance to buy a rocket or to split a ride to orbit. So even if Outernet had a hundred CubeSats lined up in a secret warehouse somewhere and had enough money to put them all on rides to orbit, it probably would take a couple of years just to find the space.  They might be able to get several dozen up on space-available flights around the globe if they have the cash – which they don't, since they're asking for donations – but a hundred within in a year is a stretch at best.

Did I mention that launch vehicles are expensive?

An Outernet  spokesperson cites "retail" costs for putting about a kilogram into orbit through a third-party launch services broker to be in the range of $125,000, and a little research shows that list price for a 3U cubesat is around $325,000.  Run the math for 100 and it's roughly $32.5 million for a constellation that will last anywhere from one to three years in low earth orbit (cubesats are not designed for long duration flight to begin with).   Sure, you may get discounts for buying slots in bulk, but it's not going to be cheap.

Figure that you have to refresh every two years, and you're shelling out upwards of $25 million for launch costs every two years.  And that's not talking about overhead to operate a network to select and stream broadcast data upward for distribution, salaries, and the like.

Outernet argues that if you buy wholesale you can push the price down substantially towards the wholesale rate of roughly $4,000 per kilogram that a SpaceX Falcon 9 launch provides.  Maybe you can push that down to $12.5 million for launches every other year, but that's still a lot of money.

Where does the money come from? Outernet says broadcasting information to the people of the world will be free – but free is not a business model.  There are a very small number of libertarian billionaires that might be tempted to fund a project like this for grins over the short run, but sustainability requires the ability to generate revenue to pay the bills: keeping a ground network running, a production line of satellites going, and regular flights to orbit to refresh the constellation.

If the Outernet vision is to succeed, they're going to have to come up with a sustainable revenue model of anywhere from $5 million to $10 million per year.   And right now, nobody at the company is talking revenue.