Even Elon Musk Makes It Clear Starlink Could Have Limited Impact, May Not Be Financially Viable

from the subsidize-me-please dept

When even Elon Musk is reining in expectations and speaking carefully about one of his products, you know you probably shouldn't get too excited.

We've noted how Musk's Starlink satellite broadband venture will certainly help a few people out of the reach of broadband options, but isn't going to meaningfully disrupt telecom. Limited capacity means Starlink will be able to provide broadband service to somewhere between 400,00 and 800,000 subscribers, in a country where up to 42 million Americans lack access to broadband, 83 million live under a broadband monopoly, and tens of millions more live under a duopoly. In short, Starlink will "fix" US broadband much like a squirt gun will kill an elephant.

Musk clearly knows that Starlink's reach doesn't meet the usual hype surrounding the billionaire's products, so he continues to be more candid and honest when talking about Starlink versus many of his other abundantly hyped projects. Like during his onscreen talk at Mobile World Congress (MWC) in Barcelona, where he once again tempered enthusiasm about Starlink's real-world impact:

"You can think of Starlink as filling in the gaps between 5G and fiber, and really getting into parts of the world that are hardest to reach,” he told interviewer Justin Springham, publisher of Mobile World Live, in a keynote Tuesday at the wireless industry trade show. As in, the last "3%, maybe 5%."

Musk also made it clear that the low orbit satellite broadband business is littered by failures, something he'd like to avoid:

"Every other low earth orbit constellation ever done has gone bankrupt,” Musk said early in the half-hour talk, citing such past collapses as Iridium. “Step number one for Starlink is don’t go bankrupt."

At the same speech Musk noted he's currently selling his "Dishy" terminals to users for around $500 despite costing $1000 to make. Other outlets, like Reuters, were even more pointed about the chance of Starlink success given it lacks the capacity to really obtain any real scale:

"Starlink would need a few million subscribers paying about $99 a month each to recoup a $5 billion investment in a year's time, said analyst Tim Farrar, president of TMF Associates.

A $30 billion investment over a decade would not require a dramatic rise in subscribers, but to achieve Musk's 2020 projection of roughly $30 billion revenue a year would require tens of millions of subscribers, he said.

But even the most rosily optimistic projections I've seen, which assume a full fleet of 42,000 satellites capable of offering 60 Gbit/s each many years from now, tops out at around 6 million max subscribers. So in other words there's a very real potential that Starlink not only doesn't really make much of a dent in the US broadband problem, but can't get anywhere close to financial viability anytime soon.

So the question then becomes, why bother? And the answer is because much like his heavily-ridiculed Las Vegas space tunnel, he's using potentially doomed side projects to nab government subsidies to finance his space ambitions. The FCC recently came under fire for giving the planet's second-wealthiest human being $883 million to deliver satellite broadband to a handful of traffic medians and already served airports. Instead of funding future-proof fiber, the FCC has been criticized for throwing money at a man who doesn't need it, to finance a project that may not even be around a few years from now.

To be clear, Starlink, if it survives, can genuinely help Americans out of the reach of traditional options. But keep in mind with a $600 first month cost ($500 for hardware, $100 a month) it's not exactly helping those who can't afford broadband. And with only 300,000 to 800,000 initial slots, those who really need the service will have to battle with Musk fanboys who already have decent options, but just want to be early adopters due to the Musk brand. In short there's an awful lot that can go very wrong here, and even the most optimistic projections for the venture aren't particularly productive or disruptive.

Filed Under: broadband, capacity, competition, elon musk, satellite, starlink
Companies: spacex

Elon Musk Makes It Clear Starlink Won't Have The Capacity To Disrupt U.S. Broadband

from the baby-steps dept

SpaceX says the company has received more than 500,000 pre-orders for the company's growing low-orbit satellite broadband service. The company opened up pre-orders back in February, and says it currently has about 10,000 users around the world participating in the beta. Starlink, which (for now) costs about $100 per month (plus a $500 first month equipment charge), should provide a welcome new option for many folks currently stuck without any broadband whatsoever.

But for those who continue to think Starlink is going to truly disrupt the broken U.S. broadband market, here's a few quick numbers. Up to 42 million Americans lack access to any broadband whatsoever, be it wired or wireless. Another 83 million currently live under a broadband monopoly, usually Comcast. Tens of millions more live under a broadband duopoly, which usually consists of Comcast and some regional phone company that stopped caring about upgrading its DSL networks sometime around 2005 or so. This regional monopolization directly results in spotty, expensive, sometimes sluggish service.

In contrast, SpaceX and Musk say that the 500,000 users will probably get the service they've pre-ordered. But Musk noted last week that as the company begins to push into the several million connection territory, things will likely get tricky. Particularly in more dense areas where capacity constraints will continue to be a big problem, much like existing higher-orbit satellite offerings:

Wall Street analysts recently predicted that even with Starlink's projected max deployment of about 12,000 low-orbit satellites, it's still only going to serve somewhere between 300,000 to 800,000 households, or less than 1% of the US market. And while over time analysts estimated that it could scale to about 6 million subscribers, that's still a fairly small dent in a very large US broadband problem. And at $600 for the first month of service, it's still out of range for many for whom broadband affordability is the real impediment to reliable access.

It's also still not entirely clear what kind of network limitations we'll see on a fully-loaded commercial Starlink network in the post net neutrality era. The company initially won't want to impose too many draconian limits (like caps, overage fees, or heavy-handed throttling) in order to lure in new subscribers. But as the network gets congested and runs into the unnegotiable limitations of physics, it seems inevitable we'll see more and more restrictions of this type, once again making it clear that wireless and satellite offerings are still no substitute for future-proof technologies like fiber.

Again, if you can afford the $600 first month payment, can actually secure a pre-order, and have no other options, it's very likely that Starlink will be a godsend regardless of where on the planet you live. It will also probably be helpful for those interested in getting portable access when camping, driving around in an RV, or in the middle of the ocean. But even the normally hype-prone Musk is making it abundantly clear that those expecting a major U.S. broadband market disruption shouldn't hold their breath.

Filed Under: broadband, competition, elon musk, satellite, starlink
Companies: spacex

From Jurassic Park To Telepathic Monkeys, Elon Musk Press Hype Is Getting A Bit Thick

from the born-every-minute dept

Last week the press was jam packed with headlines discussing how Elon Musk and his Neuralink co-founder Max Hodak would soon "have the technology to build a real life Jurassic Park." From the New York Post to The Hill, outlets quickly parroted the claim that Neuralink might soon get into the reanimated dinosaur business, triggering not only waves of Jeff-Goldblum-themed ridicule on social media, but a lot of free advertising for Elon Musk and Neuralink.

Except none of that's actually happening. For one thing, the original tweet by Hodak doesn't even mention Neuralink by name:

Hodak appears to have been speaking generally, not specifically, and there's zero evidence the company is even pursuing the concept. Nor is it clear that Hodak is actually correct in his statement that such a venture is technically possible:

"...it's pretty much impossible to resurrect a dinosaur. The science of bringing dinosaurs back from the dead isn't really as sound as Hodak makes it seem though. Even humanity would have a tough time building a Jurassic Park in the next 15 years. First, we'd need some DNA from the prehistoric tyrants. Unlike in the film Jurassic Park, where the DNA is retrieved from mosquitoes in amber and fused with frog DNA, that information has completely degraded over the millions of years it has spent in the ground."

To be clear, Musk has done, and is doing, plenty of interesting, innovative things. Just Space X/Starlink alone are impressive achievements that are delivering genuine innovation. At the same time, Musk and friends have a growing history of over-hyping products that either don't exist, or don't deliver what was promised by marketing. Like his Boring Company's Las Vegas Loop, a project built on $50 million in taxpayer dollars that was supposed to revolutionize mass transit. Yet during a media event last week was shown to be just a boring, one-way tunnel filled with non-automated Tesla vehicles moving at 35 MPH:

"Whatever happened to those 16-person vehicles? When Musk first announced the Loop, it genuinely looked like an exciting new transportation system. Musk promised that each vehicle could fit over a dozen people inside and everything was autonomous. But it doesn’t look like much of anything is automatic anymore. You even have to tell your human driver where you want to go."

Many outlets couldn't be bothered to even mention any of this, instead offering gushing, unskeptical stories that called the undercooked tunnel a "thrill ride":

Last week Neuralink also made an ocean of headlines after posting a video showing a monkey playing Pong with a brain implant. Press outlets went to great lengths claiming this new pong-playing psychic monkey would soon be "revolutionizing healthcare." Only a few outlets could be bothered to mention that nothing Neuralink is doing has been peer reviewed, FDA approved human trials appear nowhere on the horizon, there's notable safety and adoption issues that could derail such efforts, or that most of what Neuralink was hyping isn't particularly new:

"It's really cool and looks really impressive. But so does the below video, which shows an implant being used by a human to control a robotic arm. Notably, this video dates from 2012. The actual work was probably done earlier, and there were undoubtedly trials in monkeys well before this."

Meanwhile, actual experts and neuroethicists quietly doubted Neuralink can get remotely close to the kind of technology the company and Musk have promised anytime soon. But such voices in unskeptical, hyper-enthusiastic news coverage weren't particularly well represented.

That's not to say that Neuralink's experiments don't hold potential, or that it's not damn impressive to see scientists transmitting data from 1,000 electrodes implanted in a monkey over a Bluetooth link. But at the same time, a lot of what Musk promises simply never materializes (like full and safe Tesla self driving), and news outlets aren't particularly great at presenting Musk and friends' latest claims with a grain or two of salt, or seeding stories with the essential context of a growing pattern of empty or over-inflated promises.

Many journalists and readers alike can't seem to hold conflicting ideas in their heads simultaneously when it comes to Musk. The reality is that Musk is both an innovative tech pioneer and an egomaniacal grifter who routinely says dumb and untrue things:

"It turns out it’s all true. The cars are impressive and their flaws get covered up. Musk is a lying ignorant grifter and he has inspired innovation in the electric car industry. Understanding that these seemingly contradictory things can be true simultaneously is important, because societies who cannot hold these two ideas at the same time may end up following scam artists and false prophets off the cliff and into the abyss."

There are countless researchers and scientists laboring under harsh halogen lighting at the edge of breakthrough tech and scientific innovation, who see little public attention. Their slow, steady progress generally isn't of interest to the ad-based media model. Such a model often isn't keen on explaining the deeper nuances of innovation with actual experts, because that simply doesn't make as much money as slack-jawed hype. Combine our ad-based media dysfunction with the generalized fanboy treatment of Musk as some kind of hybrid between Tony Stark and a god, and the net result is compounded hype untethered from reality.

Filed Under: dinosaurs, elon musk, hype, jurassic park, telepathic monkeys
Companies: neuralink

Wall Street Analysts Say Musk's Starlink Poses No Real Threat To Traditional Broadband

from the gonna-need-more-satellites dept

To be clear: Space X's Starlink broadband service won't be taking on traditional broadband providers in major metro areas. Instead, the company will be using thousands of low orbit satellites (with lower latency than traditional satellite broadband) to deliver marginally decent service to under-served rural Americans, assuming it winds up being profitable longer term. In a country where an estimated 42 million can't get any broadband at all (during a raging pandemic, no less), any improvement helps.

At the same time, many Musk fanboys and press outlets continue to overstate Starlink's (which provides speeds "up to" 100 Mbps for $100 per month plus a $500 first month equipment charge) overall impact. And many telecom analysts continue to try and temper this unbridled enthusiasm, warning that by Musk's admission, the service isn't going to have the kind of capacity necessary to truly disrupt the traditional fixed broadband market. That includes Wall Street analyst Craig Moffett, who has been trying to calm investors in traditional broadband companies worried about Starlink's disruptive potential:

"For investors worried about Starlink's threat to terrestrial broadband, we think the threat is minimal," Moffett surmised. "Based on our analysis of the data available today … Starlink is much better suited for bringing broadband to unserved or underserved markets than it is for bringing competition to already-wired markets."

Even in the largely rural (and maritime) markets Musk's company is targeting, the overall impact is notably smaller than you might think:

"According to his analysis of available capacity and anticipated usage, Moffett estimates that Starlink's US TAM, at a full deployment of about 12,000 low-earth orbit (LEO) satellites (about 1,400 are in orbit today), is in the range of just 300,000 to 800,000 households, or less than 1% of the US market, Moffett notes."

On the maximum end, Moffett's study guesstimates that Starlink could ultimately serve as many as 6 million US subscribers once the company upgrades the low orbit satellites and boosts overall satellite total to 42,000. But again for context: there are 42 million Americans with no access to broadband whatsoever (double official FCC estimates), and another 83 million US consumers stuck under a broadband monopoly (usually Comcast). Tens of millions more live under a broadband duopoly, usually consisting of Comcast and a local phone company that probably hasn't upgraded its DSL lines since 2004 or so.

So again, while Starlink will be a very good thing for rural users with no options who can afford the $100 monthly charge, it's simply not going to revolutionize the sector anytime soon.

Filed Under: broadband, competition, elon musk, satellite, starlink
Companies: space x

Annoyance Builds At Elon Musk Getting A Billion In Subsidies For Starlink Broadband

from the not-really-helping dept

So we've noted a few times how Elon Musk's Starlink is going to be a great thing for folks stuck out of reach of traditional broadband options. Though with a $600 first month price tag ($100 monthly bill and $500 hardware charge) it's not some magic bullet for curing the "digital divide." And without the capacity to service more densely populated areas, the service is only going to reach several million rural Americans. That's a good start, but it's only going to make a tiny dent for the 42 million Americans that lack access to any broadband, or the 83 million currently stuck under a broadband monopoly (usually Comcast). Starlink is going to be a good thing, but not transformative or truly disruptive to US telecom monopolies.

There are a few other issues with the tech as well. One is the creation of light pollution that's harming scientific research (which US regulators have absolutely no plan to mitigate). Then there's the fact that Musk's Starlink recently gamed the broken FCC auction process to nab nearly a billion dollars it doesn't really deserve. Consumer group Free press did a good job breaking down how we're throwing a billion dollars at the second richest man on the planet via an FCC RDOF auction that's very broken, and by proxy easily exploitable by clever companies:

"But lest I be accused of West-Coast bias, here’s a parking lot outside the Pentagon, where Elon Musk’s Starlink is getting scarce ratepayer funds to offer his “coming soon” satellite service, one that he’s previously said was intended to bring broadband to the hardest-to-reach rural areas. Apparently Uncle Sam wants you to pay for completely unnecessary satellite-internet service to an urban parking lot a few feet from one of the most connected properties on the planet.

Again there's really no reason to be subsidizing Musk here. Especially for somebody that has lots of deep thoughts on stuff like "socialism." Needless to say, there's a growing roster of companies and broadband co-ops that also aren't particularly keen on Elon Musk getting money that could be going to truly struggling local broadband providers, many of which operate on highly restrictive budgets, and are deploying actual fiber connections:

"SpaceX’s broadband-from-orbit “is a completely unproven technology,” said Jim Matheson, chief executive officer of the National Rural Electric Cooperative Association, which has members that vied for the funding. “Why use that money for a science experiment?"

I think it's less about the tech not working (early beta reports are pretty great), and more about not throwing a billion dollars at a billionaire for a low orbit satellite technology that's both inferior to fiber, and easily funded by Musk without the government's help. To get money from the government, Musk's Starlink promised it could deliver 100 Mbps to each consumer. And while users on the largely empty network are seeing those speeds, another report this week suggested they'd probably never hit that benchmark for most users:

"Boiled down further, the study estimates that 56% of SpaceX's RDOF locations in a "low capacity" use case (average data usage of 15.3 Mbit/s per location) and 57% of locations in a "high capacity" use case (average data usage of 20.8 Mbit/s per customer) "will experience service degradation during peak times and not meet the RDOF public interest requirements." The Cartesian study also estimates that 25% to 29% of locations will receive an average of less than 10 Mbit/s of capacity during peak times."

To be clear, some of these critics are companies that are simply worried about having to compete with Starlink. I imagine that smaller WISP CEOs aren't sleeping particularly well right now. Traditional satellite providers, whose costly, capped, and high latency services have been mocked for decades, aren't going to enjoy competition from Starlink either. Rural cellular companies are also probably going to lose some subscribers. Especially if Starlink winds up being easy to use and delivers consistent speeds (which we won't see until they launch a fully loaded commercial network).

But that still doesn't really address that the planet's second wealthiest man shouldn't be subsidized for a project he would have paid to deploy anyway, and is only likely to put a small dent in the overall problem. One more time for scale: Starlink will probably help serve somewhere between 485,000 to 1.5 million subscribers. There are 42 million in the US without broadband, 83 million stuck under a monopoly, tens of millions more stuck under duopoly, and then countless millions more who can't afford service due to monopolization. Starlink will be helpful, but it's a drop in the bucket.

There's a lot of middle and last-mile fiber-based broadband solutions that will have a lot more capacity, being pushed by companies for which a few million bucks is a life or death equation. Instead we're throwing a billion at a billionaire for a service that's not really all that affordable, and, once fully loaded to capacity is very likely to come with all manner of throttling, deprioritization, and other restrictions in the post net neutrality era. Add in an FCC whose broadband maps suck and auction processes are completely broken, and you can probably see how this isn't a recipe for success.

Filed Under: elon musk, starlink, subsidies
Companies: space x, starlink

ViaSat Asks FCC To Investigate Space X For Space Pollution

from the competitive-elbowing dept

So we've already noted how Space X's Starlink low-orbit satellite broadband service isn't going to 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. It's also going to be a significant upgrade for those currently stuck on last-generation expensive, capped, and sluggish traditional satellite lines.

Enter ViaSat, which clearly isn't keen on having its captive business market disrupted. The company this week urged the FCC to conduct an environmental review of SpaceX’s low-orbit Starlink constellation, arguing that the fledgling system poses environmental hazards in space and on Earth. Since the 80s, satellite systems have had a baked in exemption from the National Environmental Policy Act (NEPA), excluding their businesses from environmental review. But the 12,000 lower orbit satellites Space X intends to launch should change that equation, ViaSat argues:

"given the sheer quantity of satellites at issue here, as well as the unprecedented nature of SpaceX’s treatment of them as effectively expendable, the potential environmental harms associated with SpaceX’s proposed modification are significant,” the company stated.

“Relying on the Commission’s decades-old categorical exemption to avoid even inquiring into the environmental consequences of SpaceX’s modification proposal would not only violate NEPA, but also would needlessly jeopardize the environmental, aesthetic, health, safety, and economic interests that it seeks to protect, and harm the public interest,” Viasat continued.

ViaSat's motivations here are in part anti-competitive to be sure, but that doesn't mean there's not a problem. A massive rise in lower orbit, cheaper satellites means a lot more junk and orbital debris floating around, putting other space craft at risk. ViaSat also argues this unprecedented rise in spacecraft also means more satellites burning up in orbit, which in turn can create environmental hazards like the production of ozone-destroying chemicals from launch vehicles to chemicals released when satellites burn up in re-entry:

"The petition cites research by The Aerospace Corporation on atmospheric impacts of launches and reentries. At the Fall Meeting of the American Geophysical Union earlier this month, the organization presented research that concluded that the rise of satellite megaconstellations could increase the mass of satellites reentering the atmosphere from about 100 metric tons a year to as much as 3,200 metric tons."

Again, ViaSat's likely playing some competitive games here while also citing serious issues. Issues the FCC hasn't really paid much attention to as it greenlights not only the launch of Starlink, but Amazon's massive low-orbit satellite ambitions. This is all before you get to issues of massive light pollution caused by these systems, a problem Musk claimed wouldn't happen (right before it did), and something scientists recently argued can't be easily fixed, if it can be fixed at all.

The inquiry was enough to get Elon Musk to comment on Twitter, calling ViaSat's inquiry "sneaky":

It should be noted that Charlie Ergen is CEO of Dish Network, not ViaSat. And while Musk is probably right that ViaSat is largely interested in preventing disruption of its largely-captive market, at the same time we've noted how regulators aren't really taking many of these problems particularly seriously as they stand around in slack-jawed awe at the somewhat innovative potential of emerging low-orbit satellite tech.

Filed Under: competition, elon musk, fcc, low earth orbit, satellite broadband, space pollution, starlink
Companies: space x, viasat

Space X Tempers Expectations As Starlink 'Better Than Nothing' Broadband Beta Starts

from the better-than-nothing dept

Space X has begun sending invites out to folks interested in participating in the company's Starlink low-orbit satellite broadband service. Users took to Reddit to note that Starlink is promising users speeds of 50-100 Mbps downstream for about $100 per month, plus $500 down for a connection terminal and antenna. The company is also promising significantly lower latency (20 to 40ms) than what you'll typically see with satellite broadband (often 200ms or higher). The best part, no monthly usage caps and overage fees (so far):

"Expect to see data speeds vary from 50Mbps to 150Mbps and latency from 20ms to 40ms over the next several months as we enhance the Starlink system. There will also be brief periods of no connectivity at all.

As we launch more satellites, install more ground stations, and improve our networking software, data speed, latency, and uptime will improve dramatically. For latency, we expect to achieve 16ms to 19ms by summer 2021.

The Starlink phased-array user terminal, which is more advanced than what's in fighter jets, plus mounting tripod and Wi-Fi router, costs $499 and the monthly subscription costs $99.

Space X is clearly attempting to get ahead of expectations that the offering poses a serious challenge to entrenched U.S. broadband monopolies. So much so that the company is calling this the "Better Than Nothing" beta. And for good reason. As we've noted previously, Musk himself has repeatedly acknowledged the system will lack the capacity to provide service to anything outside of rural markets. From a conference earlier this year:

"The challenge for anything that is space-based is that the size of the cell is gigantic... it's not good for high-density situations," Musk said. "We'll have some small number of customers in LA. But we can't do a lot of customers in LA because the bandwidth per cell is simply not high enough."

How Space X decides to manage capacity constraints should prove interesting. With the FCC and net neutrality rules effectively lobotomized, it wouldn't be particularly surprising to see throttling implemented to help manage the load, a reminder that it's hard to beat traditional fiber. Still, Starlink could do some good things in a country where 42 million Americans are currently unable to access any broadband whatsoever. Even though for many Americans cost is the biggest obstacle, and it's not particularly clear a $600 first month bill is something a lot of these struggling users can actually afford.

In other words, Starlink will be great if your only option is currently traditional satellite broadband, a technology long despised for being slow, expensive, capped, and having high latency. It's also probably great for users who've been forced to rely exclusively on a capped and throttled wireless connection. And it's particularly great for folks who've been just out of reach of any broadband entirely. But how well Starlink differentiates itself will probably come down to how annoying its network management practices wind up being on a crowded, fully loaded network.

For most everybody else it will be a non starter. And you can probably expect a disconnect between Starlink's attempt to set realistic expectations (which should be applauded for a company not unfamiliar with hype), and regulators eager to portray Starlink as something more than the sum of its parts.

Captured regulators from both parties historically enjoy portraying emerging broadband technologies as near-miraculous examples of why regulatory oversight isn't needed. As in, "we don't need competitive policies because amazing competition is already happening." Or, as Michael Powell did with doomed powerline broadband technology in the early aughts, trying to claim that pandering mindlessly to AT&T, Verizon, and Comcast is a good idea because the free market and innovation will swoop in and save the public from monopolistic harms.

That may be true in more functional, healthier markets, but it's simply not true in the monopoly-dominated U.S. telecom sector. As such, the several million users Starlink is expected to help is a drop in the bucket in a country where 42 million Americans lack access to any broadband, 83 million more are trapped under a broadband monopoly, and tens of millions more are stuck with an apathetic duopoly. Starlink will be more akin to a band aid than a cure. Raise a skeptical, arched eyebrow at anybody claiming otherwise in the months to come.

Filed Under: competition, digital divide, elon musk, expectations, latency, satellite broadband, starlink
Companies: space x

Report Notes Musk's Starlink Won't Have The Capacity To Truly Disrupt U.S. Telecom

from the not-good-enough dept

We've noted a few times that while Space X's Starlink will be a very good thing for a limited number of rural customers out of the range of traditional broadband options, it's not going to truly disrupt the busted U.S. telecom market in any revolutionary way. The service should be a step up from traditionally expensive, capped, and sluggish old-school satellite broadband, since new low-orbit satellites can provide lower latency service at a price point Elon Musk insists will be competitive.

That said, the financial analysts at Cowen came out last week to note that even at its current maximum of 12,000 such satellites, Starlink will never have enough capacity to truly service more than 485,000 subscribers at full capacity:

"While Starlink has the ability to provide a practical satellite-based broadband solution for the underserved, the capacity has limitations in most of the US especially considering the growing demand for bandwidth driven by in-home data-rich applications and devices," the firm wrote in a research note first spotted by Light Reading.

Starlink currently has 650 satellites in orbit, with 12,000 planned by 2026. But even at full capacity the researchers estimate the service won’t be able to service any more than 485,000 simultaneous data streams at speeds of 100 Mbps.

Granted most ISPs operate under the "oversubscription" model, which correctly assumes that not all customers will be using the full throughput of their connection all day, every day. So Starlink can certainly offer slower speeds to notably more people. Especially if (with no net neutrality and a Trump FCC that couldn't care less about it) Starlink utilizes strange throttling technology that limits what users can do with those connections. But even that would barely dent the estimated 42 million Americans that lack access to any broadband, or the 83 million currently stuck under a broadband monopoly (usually Comcast).

Musk himself has acknowledged this limited capacity means Starlink won't be a major player in any major urban or suburban U.S. markets. That brings us to the other problem Cowen raises, namely that low orbit satellite will never really be able to scale with consumer demand the way traditional fiber optic broadband can. Especially not in the cloud computing, 4K game streaming era:

"US broadband consumption, and the speeds that users demand, is continuously growing," Cowen wrote. "Thus, as satellite throughput and technology continues to progress, so too will demand for faster speeds. As such, our analysis shows that LEO satellites will continuously be a step behind wireline telco/cable operators in meeting US consumer demand for broadband."

So yes, Starlink will be a good thing for a limited number of folks out of range of decent broadband or somewhere on a boat. But anybody framing this as a massive disruption to the status quo (something the press tends to enjoy doing when Musk is involved) is misrepresenting what the service will actually accomplish. As Starlink lobbies the FCC for up to $16 billion in subsidies, it's also worth remembering that U.S. taxpayers have thrown countless billions at existing monopolies for fiber optic networks that routinely wind up only half deployed.

Which is to say we could focus on state and federal corruption, and the decades of fraud and cronyism that have gifted entrenched telecom giants like AT&T, Comcast, and Verizon massive geographical monopolies. Then finally just deploy the coast to coast fiber networks American taxpayers have likely already paid for several times over with the help of pissed off communities. Or we could do nothing about that problem, over-hype half-measure efforts to re-invent the wheel, then grumble in a few years about the fact we never seem to quite fix America's stubborn "digital divide."

Filed Under: broadband, capacity, competition, elon musk, satellite, starlink
Companies: space x, starlink

Space X's Starlink Won't Be The Broadband Disruption Play Many People Think

from the don't-get-your-hopes-up dept

After initially obtaining an FCC license for up to 1 million Starlink satellite broadband customers in the United States, Space X last week quadrupled that estimate, and is now hopeful that 5 million Americans will sign up for service. To be clear: Space X's service won't be taking on traditional broadband providers in major metro areas. Instead, the company will be using thousands of low orbit satellites (with lower latency than traditional satellite broadband) to deliver marginally decent service to under-served rural Americans, assuming it winds up being profitable longer term.

In a country where an estimated 42 million can't get any broadband at all (during a raging pandemic, no less), any little improvement helps. By and large, most major outlets have framed Starlink as a massive disruption of the broadband industry:

"Starlink is the company’s ambitious plan to build an interconnected network of about 12,000 small satellites, to beam high-speed internet anywhere in the world. To date, SpaceX has launched more than 500 Starlink satellites. In addition to getting the satellites in orbit, SpaceX will need to build a vast system of ground stations and affordable user terminals if it is going to connect consumers directly to its network."

But those thinking that Starlink is going to truly disrupt the broadband industry at large probably shouldn't be holding their breath. Even the industry-cozy FCC has expressed skepticism about Musk's latency claims. And Musk himself has made it clear the service won't be a big threat to incumbent broadband providers because there just won't be enough capacity available to offer the service in major metro areas. No limit of marketing hype will be able to defeat the law of physics:

"The challenge for anything that is space-based is that the size of the cell is gigantic... it's not good for high-density situations," Musk said. "We'll have some small number of customers in LA. But we can't do a lot of customers in LA because the bandwidth per cell is simply not high enough."

Again, that's not to say Starlink won't be a positive advancement for rural broadband users, but it's mostly a play aimed at a niche market American companies have, time and time again, deemed to costly to serve after some initial flirtation. In time, Space X may as well. Given there have been so many failed attempts to disrupt the heavily monopolized residential US telecom sector (especially in low orbit satellite), it makes sense to wait for a fully commercial launch -- and to see what pricing and weird usage restrictions are applied -- before getting too excited about Starlink's potential for meaningful innovation.

It's also worth noting that existing telecom monopolists just love using emerging technologies as justification for regulatory apathy (read: we don't need oversight because the sector is just so darn competitive). As we saw with failed broadband over powerline (BPL) technology or wireless tech like WiMax, that usually involves radically over-hyping emerging competitors as mystical panaceas in a bid to suggest that reasonable adult oversight of the sector is no longer needed. That's certainly the tactic being used for 5G (another technology that won't be as disruptive as claimed for a laundry list of reasons), and I'd wager that Space X and Amazon's low orbit satellite experiments will soon be abused in the policy arena by AT&T, Comcast, and Verizon in much the same way -- even if the actual impact on incumbent businesses will likely be negligible.

Filed Under: broadband, competition, elon musk, leo, low earth orbit, satellites, starlink
Companies: spacex, starlink

Space X Starlink Beta Starts In 6 Months, Bringing A Glimmer Of Hope To Crappy US Broadband Market

from the disrupt-the-undisruptable dept

The US broadband market is a competitive mess. US telcos have routinely refused to upgrade their aging DSL lines, as the return on investment has never been fast enough for Wall Street. That has left cable giants like Comcast and Charter (Spectrum) with bigger broadband monopolies than ever before. While many see 5G wireless as some sort of competitive panacea waiting in the wings, there's a litany of problems (cost, reach, competition eroding M&As) that suggests folks should temper their enthusiasm.

Then there's satellite broadband. Long despised by consumers for slow speeds, inconsistent performance, high prices, and usage caps, the sector is poised for disruption by a number of low-orbit satellite ventures. These new offerings offer significantly lower latency using a litany of smaller low-orbit satellites. One of the major players is of course Space X, whose Starlink satellite broadband service is slated for a public beta six months or so from now according to Elon Musk:

The beta is poised to include both Europe and the United States, which the company previously stated should see a full commercial launch sometime later this year. After launching another 60 Starlink satellites yesterday, Musk indicated there were now "420 operational Starlink satellites" preparing to offer service. The service offers the promise of some significant disruption to a sector that very much could use a competitive kick in the ass.

That said, Starlink may never truly challenge the domination of telecom monopolies like AT&T and Comcast. For one, it's still far too early to know what kind of speeds or prices users will be looking at, and it's quite possible that the price point, throttling restrictions, or usage caps could result in the service being a flimsy alternative to fixed-line broadband. Musk has also previously noted how while the service latency should be a LOT better than traditional satellite broadband (20ms versus 200ms or higher), the service isn't going to have the kind of bandwidth needed to seriously compete in denser urban or suburban markets:

"The challenge for anything that is space-based is that the size of the cell is gigantic... it's not good for high-density situations," Musk said. "We'll have some small number of customers in LA. But we can't do a lot of customers in LA because the bandwidth per cell is simply not high enough."

Keep in mind that the US broadband industry is routinely peppered by well hyped potential disruptors that consistently fail to deliver.

Broadband over Powerline, for example, was widely hyped as a competitive panacea by folks looking to deregulate the telecom sector, only to fall flat on its face due to interference issues. The current FCC has similarly justified its pandering to existing monopolies with the promise that competition (be it 5G or satellite) is just around the corner. But there's no shortage of low-orbit satellite ventures thatn have fallen flat on their face, and there's no shortage of politically powerful companies (AT&T, Verizon, T-Mobile, Comcast) busily lobbying to ensure another major competitor never upsets the apple cart.

That said, there's still hope that Starlink offers a genuine, helpful option to users left out of reach of traditional options. With more than 42 million Americans still unable to get any broadband at all, and millions more unable to afford it due to limited competition and high prices, the US broadband sector can certainly use all the help it can get.

Filed Under: broadband, competition, elon musk, satellite broadband, starlink
Companies: space x, starlink