[bradleyland]

Communications satellites typically use a geostationairy orbit. The advantage of this is two-fold:

1) Your antenna need not "track" the satellite to hold a signal

2) There is no gap in connectivity required to track to another satellite when one goes out of range/view

A geostationary orbit, as Oli pointed out, is way up there. At that distance, there are some physics that limit the minimum latency.

RTT between the satellite to the ground is around 250 ms, but that's only for one leg. RTT for any other endpoint on earth is going to have a minimum travel time of 500 ms. Return communications must use the same link, which adds in another 500 ms of latency. All of this adds up to a minimum of around 1 second latency on a good day. The physics of the matter dictate that satellite can never match fiber at the physical layer.

I have a feeling that they're using some sort of caching strategy to meet that fiber latency claim. That works fine for people who want to browse the news or catch up on a blog, but for things like webmail and Facebook, it's going to be painfully slow.