Improving Satellite Communications
Caltech investigators on the forefront of research are typically driven first by discovery, but when commercial opportunities present themselves, they quickly take advantage of them. For Dave Rutledge, the Kiyo and Eiko Tomiyasu Professor of Electrical Engineering, the application appeared almost simultaneously with the discovery.
In 1980, having just received a PhD from Berkeley, Rutledge came to Caltech as an assistant professor of electrical engineering and soon discovered an application for his thesis project, which involved antennas and optically-coupled radio detectors. In the early 1980s, the Army was putting into orbit defense satellites so that soldiers in the field could better send data and images to command centers thousands of miles away. While the satellites were state of the art, the existing methods for transmitting data were antiquated.
"For the transmitters on the ground, they were using integrated circuits with low output power and 100-pound vacuum tubes," Rutledge says. "At $100,000 each, they were too expensive. Plus, the vacuum tubes got beat up in the field and wouldn't last." Vacuum-tube circuits were also not very reliable.
So, with support mostly from the Army and the Rockwell Science Center, Rutledge and his graduate students began building a high frequency transmitter of integrated circuits packed with hundreds of transistors. To ramp up power at a frequency of 30 GHz—the wavelength used by the Army—Rutledge pioneered a system known as active quasi-optics, in which the power from transistors in the air above the amplifier is combined into an efficient beam, eliminating the transmission-line power losses of the old system. The increase in power provided a 10:1 improvement in data transmission rates. For this work, Rutledge won the 1990 Microwave Prize, the annual prize from the Microwave Theory and Techniques Society and the highest honor in this area of wireless communications.
The system, however, which worked in the lab, was still not ready for commercial use. Throughout the 1990s, Rutledge and his students continued to make improvements to the transmitter system, focusing mostly on increasing the power that it could generate while making it small enough so that it could be easily transported. In 2000, the technology was far enough along that two of those students, Chad Deckman and Michael DeLisio, decided to start a company with Rutledge and a visiting Caltech engineering researcher named Jim Rosenberg. They called the company Wavestream.
They quickly negotiated a deal with Caltech's Office of Technology Transfer (OTT) so that they could exclusively license the Caltech technology. To give Wavestream a good chance at success and not to saddle it with debt, OTT took equity in the company rather than demanding cash for the license. In early 2000, the start-up market looked good, and Deckman, DeLisio, and Rosenberg began meeting with venture capitalists with help from OTT. But within months, the dot-com bubble burst, and venture capital funds all but dried up.
But the group persevered, raised $6 million in cash and services, and opened Wavestream headquarters in a small office in West Covina in August 2001. "The real proof of any engineering idea is if you can make a product that people will buy," says DeLisio. "We wanted to try that."
"There were five of us in 1,000 square feet of space," Deckman says. "We tried to be lean, designing the transmission systems on computers and sending them out to a fabricator to be manufactured." As they worked on getting the device smaller, many of their designs failed. "We struggled to get it to work. We underestimated how difficult it would be."
In retrospect, they say that it was probably to their advantage that their system took longer to develop than expected, because the market for the product was initially small. But by the time that they had developed a viable system in 2005, the Army announced that it was launching a so-called Warfighter Information Network-Tactical (WIN-T) program to improve battlefield communications. As part of that program, the Army would need a robust transmission system for ground-to-satellite communications—just what Wavestream had built. Rutledge's early Army contacts may have come in handy, as Wavestream won a $100 million contract in 2006. The Army has deployed many of Wavestream's transmitters around the world, including in Iraq and Afghanistan. Once the Army started using it, "the transmitter got great reviews and it put Wavestream on the map," says DeLisio.
With the financial resources from the Army contract, Wavestream developed a transmitter for lower frequencies than the WIN-T transmitter. That led to more commercial opportunities, including broadcast news transmission from satellite trucks. One of its amplifiers has been used by a telecommunications company to help people make phone calls after Hurricane Katrina, and another unit has helped mountain climbers communicate from Mount Everest to places around the world.
By 2008, Wavestream had 150 employees and had opened offices around the world, including a Singapore design center led by another of Rutledge's students, Lawrence Cheung. "Our revenue was growing by 25% or so a year," says Deckman. In 2010, when the company hit its 10-year anniversary, its investors were looking to cash out. "A public offering would have been difficult, since satellite communications is still a niche market," he says. Wavestream's investors hired consultants who started shopping around the company, and in October 2010, Gilat Satellite Networks, an Israeli satellite communications company, agreed to buy Wavestream for $130 million.
Gilat asked Deckman and DeLisio to stay on, and they say that the two companies are working well together. "Gilat makes other parts of the satellite communications system, including modems and satellite dishes," says DeLisio. "By packaging all three elements together, I think we'll be able to do things like tightening up the interplay between the modem and amp to make a more efficient transmitter."
Defense applications now represent about 50 percent of the business, down from about 80 percent during the height of the WIN-T program a few years ago. Wavestream recently opened a sales office in China, and with no export restrictions on its products, foreign customers now make up about 40 percent of its business. New markets for Wavestream's products include the airline industry and the cruise line industry for telephone and Internet communications.
While Rutledge credits Deckman and DeLisio for doing the work in launching and running Wavestream, his former students say that Wavestream wouldn't have happened without him.
"Dave is basically the pioneer in the field," says DeLisio. "And if we hadn't been part of his research group, none of this would have been possible."