Dish, Space X Battle At The Broadband Subsidy Trough
from the good-arguments,-dodgy-motivation dept
To be clear: Space X's Starlink low-orbit satellite broadband service won't revolutionize the broadband industry. The service lacks the capacity to service dense urban or suburban areas, meaning it won't pose much of a threat to traditional cable and fiber providers. With a $100 monthly price tag and $500 hardware fee, it's not exactly a miracle cure for the millions of low-income Americans struggling to afford a broadband connection, either.
That said: if you're currently one of the 42 million Americans who lacks access to any broadband at all, the service, capping out at 100 Mbps, is going to be damn-near miraculous (if you can afford it). It's also going to be a major competitive challenge to the companies that not only compete for rural broadband attention (like WISPs, cellular providers, and last-gen satellite providers), but are busy elbowing out one another at the trough to grab a slice of taxpayer subsidies. Understandably, many of these companies are trying to slow Starlink by any means necessary.
Last month, ViaSat urged the FCC to investigate Space X's very real impact on scientific research via light pollution (a genuine problem regulators have done bupkis about so far). Since the 80s, satellite systems have had a baked in exemption from the National Environmental Policy Act (NEPA), excluding their businesses from environmental review. As Amazon and Space X fling tens of thousands of low orbit satellites into space, ViaSat is suggesting that exemption be reversed. ViaSat's motivations here are entirely selfish. But at the same time this is a real problem they're not wrong about.
Dish Network is also trying to slow down Starlink a bit more creatively by telling the FCC the company's broadband plans could cause interference in the 12.2-12.7 GHz band:
"Dish told the FCC that SpaceX's plan "would adversely affect reception at DBS consumer dishes and that the system as modified would exceed the applicable power limits under International Telecommunication Union and Commission rules. In other words, SpaceX would not be able [to] use the 12 GHz band to meet its RDOF obligations if such service interferes with DBS operations."
Earlier this year we noted how Space X was awarded $885.51 million over 10 years from the FCC's Rural Digital Opportunity Fund (RDOF) auction. The problem: like many companies, critics say Space X gamed the system by being misleading about where the company plans to offer service. As such, it's not really clear that we need to be throwing nearly a billion dollars at one of the planet's richest human beings to deploy service to an extra 642,925 locations they probably would have serviced anyway without taxpayer/ratepayer aid.
As the FCC begins digging more deeply into who actually deserves subsidization under its heavily criticized RDOF auction, Dish is trying to have Starlink's designation as an Eligible Telecommunications Carrier (ETC) under the Communications Act pulled, threatening its subsidies. Starlink's response to Dish's claims is to correctly note that Dish is largely motivated by its own best interests:
"Clearly, this challenge is part of DISH’s larger campaign to cash in on its spectrum speculation in the 12 GHz band by antagonizing non-geostationary orbit satellite operators already licensed to operate in that spectrum. The Commission should decisively reject across all of those proceedings these blatant efforts to misuse Commission resources."
You might recall that Dish is supposed to be building a new 5G network as part of a dodgy plan by the Trump administration affixed to the Sprint T-Mobile merger. The plan: to build a new network over 7 years to help counter the lost competition from losing Sprint. The reality: many still tend to think Dish will spend several years stringing regulators along, only to then cash out of their massive spectrum holdings sometime down the road, with no real network to show for it. So far, the latter path seems like the most likely outcome, in part because T-Mobile, AT&T, and Verizon really don't want the added competition.
So on one hand, you have a company in Starlink offering a promising technology, but gaming the broken FCC subsidy system to obtain ratepayer money they don't really deserve. On the other, you have a company in Dish that may or may not ever develop a major working commercial wireless network, eager to derail Starlink just in case it someday has to compete with it. Layer on top the fact that countless billions in subsidies never seem to fix US broadband woes because we generally do a terrible job mapping broadband coverage or tracking how those subsidies are spent, and you can start to see why US broadband (and policy) is a bit of a dysfunctional mess.
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Filed Under: broadband, competition, subsidies, subsidy
Companies: dish, space x
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Do SpaceX deserve the subsidy?
Quite frankly, probably as much as anyone does.
First note that the subsidy is going to SpaceX, not Elon Musk. Bluntly, saying this is a subsidy to a rich man is just a lie, one I really wish Karl would stop repeating. SpaceX is risking a lot more money building Starlink than it will receive in this subsidy and the subsidy could conceivably be the difference between success and failure in bringing good internet to remote regions.
Next the cost, though high, is at least comparable to most if not all options in a lot of places covered by the subsidies.
FInally, if they don't bankrupt themselves trying, there is every reason and indication to believe that SpaceX will actually do what they claim they intend, unlike most if not all the "competition".
I would be happier if the subsidy was used to increase enrollment by paying the start-up cost for lower income customers, but the real problem isn't SpaceX and they don't deserve the criticism that Karl regularly doles out. The real problem is the RDOF itself, which for way too long (at at way too high a cost to the public purse) has been a gift to undeserving companies that have no intention of doing what is is intended to achieve. The RDOF should be scrapped. In a truly just world, it would never have been created, or at least, if it were, the recipients would have been held financially responsible if they reneged on their commitments.
As for obstruction that the satellites cause, I do agree that it needs to be dealt with, but the rational solution is to put telescopes into space, not to ban or diminish the best use of circum-terran orbits. A tax of even 1% on individual customers and, maybe 10% on businesses with an income above a reasonable limit, would pay many, many space-based telescopes. Especially if the Starship/superheavy duo reduced the end cost of putting 100 tons into orbit to the $5,000,000 range.
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Re: Do SpaceX deserve the subsidy?
Probably the best p[lace for a radio and optical observatory is the far side of the moon. The idea could be sold to Elon as a first step to colonizing Mars as many of he same problems need solving for a permanent moon base.
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SpaceX, Broadband, and corporations
TL;DR
1. Broadband to underserved communities IS important
2. SpaceX will get my business when they enter my market
3. Corporations and their shareholders are not the same
SpaceX will be delivering broadband Internet access to underserved communities. Whether it's the lesser developed countries, Mississippi, your grandad's RV, or a billionaire's yacht, low-latency is a must for VoIP. It's also a must for interactive serves where a "back and forth" suffers from RTT delays.
I look forward to having it as an option so I can pay my $99 to StarLink and not to Comcast. The $500 installation fee is a bit rough but there's value in never ever dealing with Comcast again.
This is the same insanity about Bezos being so rich he could pay his workers more. A shareholder is not "responsible" for corporate debts any more than he's "entitled" to take money out of its coffers when times are good. That's why it's called a corporation.
I own stock in several public and private companies. When they do well they don't send me moare money but my stock tends to appreciate. When they do badly they don't request moare money from me but the stock tends to depreciate.
Bezos spent YEARS losing MILLIONS and [I wish I'd bought Amazon stock then] and during that time nobody said to the stockholders "There's a cash call and you need to invest more."
Understanding how corporations work, why they're not "people" but they are "entities" and why their shareholders are not responsible for the debts they incur -- this is fundamental to economies worldwide.
Pre-empt: Yes, Musk and Bezos are CEOs so they do exercise the discretion to change plans. However, both are CEOs of public corporations and so have a fiduciary duty... not to their employees, but to their shareholders. This is part of the "contract" that encourages people to invest in public companies.
It's a simple tradeoff. Nobody is forcing me to buy 10 shares of Coca Cola. I do so because I think its value will appreciate. People on the other side of that same transaction think it will depreciate. In no way, shape, or form is that money going to Coca Cola. They can file an 8-K and issue more shares at the then-current price, but the buy/sell in the markets is about stockholders.
One final note. A lot of stock is owned by institutional shareholders, retirement funds, firefighters' and police unions, etc. They would be prohibited legally from investing if there was an undefined potential liability.
I'm sorry I went long. It gets so tedious watching blame successful people and being demandas that these people fund the SJW wish-of-the-week. I do think that employees are generally underpaid in the US and I do favor a higher minimum wage... funded by the corporation, not the stockholder or CEO.
E
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Re: SpaceX, Broadband, and corporations
A couple of points aren't quite right.
While SpaceX and Amazon both have shareholders besides Musk, SpaceX is a private corporation, and is not publicly listed or traded. The legal niceties for the two are different and the fiduciary responsibilities differ, Amazon being primarily governed by securities laws and regulations while SpaceX is probably primarily governed by a shareholders' agreement. Either way, if Musk were to leave money on the table without good reason (e.g. chasing the money would cost more than it would bring or the effort diverted to apply for the money would cause more important opportunities to be missed), then Musk could likely be sued by the shareholders. He likely doesn't have a legally supportable option to avoid claiming the RDOF subsidy.
Next, while the biggest income from shareholding is usually price increases, corporations also often pay dividends. Indeed, for long established, low growth stocks, this may well be the primary income source.
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Re: Re: SpaceX, Broadband, and corporations
Thank you for the corrections, education, and rabbit hole :) I had heard Gwen Shotwell say StarLink would be going public last year and just [wrongly] assumed they had. Thanks for clarifying that.
I do agree that if SL didn't take advantage of available government programs like (formerly CAF) RDOF there would potentially be ramifications with upset shareholders.
The dividend thing... you're right, but I left that out to simplify things, because then someone would say "Oh hey, when they make lots of money I get dividends" but the opposite is not necessarily true - again as you say governed by a shareholders' agreement.
Thanks for this!
E
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Re: Do SpaceX deserve the subsidy?
Why does any business deserve any subsidy?
I thought that in the free market capitalism economy when a business is unable to make a profit it goes out of business. It's a dog eat dog world. I was told that is just the way it is and the rugged individualism of our great entrepreneurs would prevail and win the day over those nasty socialists who give away everyone's hard earned cash to those who whine the most ... which turns out to be the rich elite, and they get bailed out - wait a sec ....
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Re: SpaceX, Broadband, and corporations
"This is the same insanity about Bezos being so rich he could pay his workers more."
Why is paying an employee enough to sustain said employee within the local area considered to be insane?
I posit that it's crazy to ask tax payers to assist multi-billion dollar business with meeting their payroll. In addition, it is a bit sick to subject said employee to the substandard working conditions, some of which risk life and limb.
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Re: Re: Do SpaceX deserve the subsidy?
I get the feeling that Elon Musk could blot out the sun and people would leave comments saying how he had to do for the benefit of mankind and people had no right to expect light and heat from space to always be there, and maybe Elon can be persuaded to provide those things he took away if it's sold to him in a way that benefits him. Oh and the subsidies for his sunblocker company are entirely justified as they don't go directly to him, he just reaps the benefits from the companies that receive them.
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People who can't read
Why is it that you ignored everything I wrote and want to repeat that same stupid trope?
Let me summarize it for you in small words. NOBODY is saying employees shouldn't get paid. In fact I DID SAY I'm in favor of higher minimum wage.
Neither Elon Musk nor Jeff Bezos nor Larry Ellison nor any stockholder is responsible for paying for that out of their own pockets.
Ever.
Get it yet? If not I can use smaller words.
E
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Re: People who can't read
"This is the same insanity about Bezos being so rich he could pay his workers more. "
The corporation can pay those it employs more but chooses not to and as a result the tax payers pick up the difference.
Get it?
But lets argue semantics because that other person said it was bezos himself that should pay rather than some corp.
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Re: Re: Re: Do SpaceX deserve the subsidy?
Oh and he invested millions of dollars in his companies to get them to where they are now profitable. What have you accomplished that you can judge him?
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Re: Re: Re: Re: Do SpaceX deserve the subsidy?
That came from his other heavily subsidised companies. But you're right, I should pull myself up by the bootstraps the Elon Musk way, arrive in a foreign land with a pocket full of emeralds, the backing of family wealth built from robbing Africa and the dream of turning the advantage of unearned wealth brings into even more wealth.
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Re: Re: Re: Do SpaceX deserve the subsidy?
Bullshit. Musk has done plenty that deserves criticism, Remember pedo-boy? But criticizing him for applying of this subsidy because he's "rich"4 when it was actually SpaceX that applied and is one of the few recipients that will actually work towards the stated goals of the program, while burning cash by the dumpster load and being far from assured of success, is more than a bit rich. As for the interference with astronomy, there are plenty of ways to work around it from selective high-speed electronic shutters to image processing software to putting telescopes in orbit (where they get a much clearer and brighter image. If we decide this is a real problem, apply a small tax and use the funds to massively improve astronomy rather than whining like the worthless NIMBYs you are.
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Repeating What others said...
If the money is there, and the government is offering it, why shouldn't the company take it? No company refuses a tax refund or offers to pay double normal taxes, either - it's not correct managing of the shareholders' money.
(Aside, about Amazon - a company could determine that paying wages somewhat above local market rates could be beneficial for improving employee morale and productivity - but is not obliged to do so. If the minimum legal amount is insufficient that's the government's fault, they control that lever.)
At least, in return for the subsidy, Starlink will actually provide the services being promised and that they receive the subsidy for. Apparently that's an anomaly in American communication services. The service exists now and will only improve as satellite density increases.
As for light pollution - they have at least acknowledged the problem and made efforts (less reflective satellites) to address it. If the government wanted to limit the number of satellites in low earth orbit, then they should have said so. IIRC nobody complained when Iridium(?) put up their constellation almost 20 years ago. Space is international, so even if the USA chose to limit things, other countries may not. Oddly enough, there are times when diplomacy is necessary over dictates.
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Re: Re: Re: Re: Re: Do SpaceX deserve the subsidy?
Yes. You should. It's the American Dream™.
You're confusing Elon for his dad. Check out https://www.biography.com/business-figure/elon-musk and then go check out PayPal and other ventures he's been involved in.
If you think these sources are biased google "musk emerald" and note that the references are all to his dad, not to Elon.
I'm having trouble reconciling pulling oneself by the bootstraps and "unearned" wealth. It's either you earned it or you didn't.
I'll go with Elon on this one.
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Re: Re: Re: Re: Re: Do SpaceX deserve the subsidy?
Pocket full of emeralds? He stayed in an effing youth hostel when he arrived in North America (Canada), and worked at a lumber mill and on a farm (According to his biography, anyway; never seen it refuted, though).
Family wealth? Possibly, but he and his father aren't exactly friendly, so take anything said by his father with a grain of salt (granted, take everything said by either party with a grain of salt; I do notice there is a lack of verification for any of these "reports").
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Hopefully Elon will get a billion dollars in taxpayer dollars so he can 'invent' the concept of sarcasm for you, understanding it will probably be a little easier for you them.
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Re: Repeating What others said...
"If the money is there, and the government is offering it"
Meanwhile, back at the ranch ...
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