Rivals circle Starlink as satellite service ignites

Rivals circle Starlink as satellite service ignites

On 23 August, SpaceX chief engineer Elon Musk triumphantly tweeted his Starlink satellite business had shipped 100,000 user terminals to customers around the world, with five-times as many people placing deposits or orders in hopes of accessing the internet service, which is expected to exit beta this year.

Starlink has already launched almost 2,000 Low Earth Orbit (LEO) satellites, less than 5 per cent of the total it plans to put into orbit. Stargazers are complaining Elon Musk is littering the sky, but this is likely to be the least of Musk’s concerns.

Some of the biggest names in tech and telecom are taking aim at Starlink, and mobile network operators are sure to be impacted by the fallout.

Amazon founder Jeff Bezos, Dell Technologies founder Michael Dell and Dish Network chairman Charlie Ergen all appear to be lobbying the US Federal Communications Commission (FCC) to limit Starlink’s reach.

Amazon is trying to launch its own LEO satellite service, Kuiper.

This month a solicitor representing Kuiper told the FCC it should reject a SpaceX request to evaluate two potential configurations for Starlink’s future satellite constellations. Kuiper claims Starlink’s indecisiveness will create extra work for network operators, which will need to evaluate potential interference from two possible Starlink configurations.

The Kuiper complaint came just a few weeks after a group of consultants specialising in satellite communications told the FCC they foresee no problem with 5G network operators sharing the 12GHz spectrum band Starlink uses for downlink transmissions in the US. A large swathe of the spectrum is owned by a company called RS Access, which commissioned the study.

RS Access’ investors include MSD Capital, a money management business founded by Michael Dell.

Dell Technologies launched a telecom systems business unit in 2020 and a 5G innovation lab this year. The company is now supplying open RAN technologies to Vodafone UK and Dish Network.

Dish Network owns more 12GHz spectrum than any other US company and is keen to use the band for 5G. Ergen has repeatedly urged the FCC to allow terrestrial use of the band, meaning mobile network communications.

Spectrum spat
Early in 2021, the FCC issued a Notice of Public Rulemaking (NPRM) seeking comment on whether the 12GHz band could support “new or expanded terrestrial mobile allocation” without “causing harmful interference to incumbent licensees”.

One of those incumbent licensees is SpaceX, which consistently argued the band cannot be shared with mobile operators.

In a recent rebuttal to the RS Access-backed study, SpaceX told the FCC it plans to eventually offer satellite internet service in urban areas, where 5G network transmissions will be concentrated. This would put Starlink into direct competition with mobile operators and ISPs.

William Ho, principal analyst at 556 Ventures, predicted the lines will blur between services offered by satellite, mobile and fixed line providers. “Everybody will be in everybody’s sandbox”.

Ho expects IoT connectivity to be another battleground. Mobile operators want IoT to eventually be a big contributor to 5G revenue streams, and Musk is muscling into this area as well. SpaceX recently purchased Swarm, a Silicon Valley company which uses tiny satellites to connect meters and machines to the internet.

Eventually, Starlink could be a direct competitor to MNOs in more than one market. But, for now at least, Musk is positioning the service as complementary to mobile networks.

During MWC21 Barcelona, Musk told attendees Starlink will be useful for “filling in the gaps between 5G and fibre”. The executive has made it clear one of the big fissures is in rural America, where he has positioned the service as way to provide high-speed broadband to people who will not otherwise be able to get it.

Down on the farm
SpaceX is one of the companies awarded funding through the FCC’s Rural Digital Opportunity Fund (RDOF). The agency made awards through a reverse auction, with bidders submitting the amounts they’d require to cover certain areas. SpaceX walked away with $885 million in exchange for a pledge to provide broadband to 642,925 rural homes and businesses in 35 US states.

The company committed to provide broadband service at speeds of at least 100Mb/s in the downlink and 20Mb/s up, with round trip latencies at or below 100 milliseconds.

Latest data from Ookla showed Starlink’s average US downlink speed at 97.23Mb/s and 13.89Mb/s up during Q2 2021. Average latency was 45 milliseconds.

556 Ventures’ Ho explained Starlink needs robust speed test and latency data to show the FCC it can perform as promised.

Some of SpaceX’s $885 million RDOF award is already in jeopardy though.

In late July, the FCC said it had inadvertently awarded SpaceX and other companies funds to build infrastructure in places that already have it. The agency is proposing auction winners rescind the bids they made to cover areas since found to have adequate broadband service.

With or without RDOF funding, SpaceX is clearly planning to launch thousands of new satellites. Musk may not need the FCC’s money, but he clearly seems to think he needs the agency’s assurance Starlink can continue to use the 12GHz spectrum without interference from MNOs.

To this end, Musk needs to convince regulators Starlink can provide fast, reliable broadband to rural America at scale.

If the FCC decides to protect the 12GHz band for incumbents it will not be the only government to support internet service delivered by LEO satellites.

Canada’s government recently announced plans to invest CAD1.4 billion ($1.1 billion) in Telesat Lightspeed to help its LEO satellite network deliver mobile service and broadband across the country, while the UK government has invested in OneWeb.

During the months ahead, FCC members may well face a decision between supporting Starlink’s effort to bridge the digital divide and freeing up more spectrum for 5G. The fight over the 12GHz spectrum band seems to put two of the Commission’s top priorities in opposition to one another, and the fact some of the country’s most outspoken business leaders are also on opposite sides complicates the debate.

At the moment, Elon Musk seems to be targeted from all sides, but the billionaire may have allies waiting in the wings. At MWC21 Barcelona, Musk said Starlink has two “quite significant” partnerships with unnamed mobile operators, which will presumably be announced in the coming months.

Even if things don’t go his way in the US, Musk will almost certainly continue to grow Starlink globally. And he is likely to persist in positioning the service as a way to connect the unconnected, because it is already proving its ability to do so.

Starlink is also proving its ability to attract virulent opposition from competitors, and this may be the strongest indicator of its ultimate potential.