Will Starlink be in the RDOF Auction?

Jonathan Chambers of Conexon wrote an interesting blog where he assumes that the FCC has already allowed Starlink, the satellite company owned by Elon Musk, into the top tier in the RDOF auction. If so this would be a disastrous decision by the FCC.

The RDOF auction will be a reverse auction, but with a twist. In a reverse auction, the bidder willing to take the least amount of money to provide service to a given geographic service area wins the auction. However, the twist is that the FCC is giving priority to gigabit broadband providers. If there is still a gigabit provider left in a given area after a few rounds of bidding, that bidder wins if the other bidders offer slower technologies. This twist was added to favor fiber deployment, which the FCC understands is the best broadband solution – when a community gets fiber they are set for the rest of the century and the FCC can scratch fiber-served communities off their worry list. The highest tier also favors traditional cable companies that decide to serve areas around towns where they offer gigabit broadband.

If Starlink is allowed to bid as a gigabit provider then the whole auction gets turned upside down. In areas where Starlink is bidding against fixed wireless or other slower technologies, Starlink would always win by simply staying in the auction for a few rounds. To make matters worse, Starlink could bid against fiber providers until the grant awards get so low that a fiber provider drops out of the auction.

If Starlink is considered a gigabit provider and bids on every RDOF cluster, it could theoretically win the entire $16 billion auction. That would mean no money for fiber networks or cable company networks. It would mean no money for fixed wireless networks or other technologies that promise to deliver 100 Mbps broadband or slower.

A natural question to ask is why worry about this if Starlink can deliver gigabit broadband to all of the rural areas covered by the RDOF grants? The easy answer is to that question is that nobody outside of Starlink has any idea what the company can deliver (and even Starlink probably is only guessing at the bandwidth that will come from a fully-deployed network). It’s certainly possible that Starlink satellites can make a 1-gigabit connection to earth – they have enough satellites already in the sky that the company can probably demonstrate this. We know that the recently bankrupt OneWeb demonstrated a 400 Mbps connection from a satellite to an earth station – but that has nothing to do with the amount of bandwidth that can be delivered to many users at the same time. Networks get slower and bog down as users are added and as bandwidth is oversubscribed.

As Chambers suggests, before the FCC offers any public money to Starlink, the company needs to publicly fully disclose its network architecture and capabilities. We already know what fiber networks, cable networks, and fixed wireless networks can deliver. Before opening the public purse-strings to Starlink, let the whole world see how they plan to deploy, so that smart network engineers can opine if fast speeds are possible with a fully-deployed satellite constellation.

An even bigger worry is that Elon Musk’s SpaceX company looks to be in financial trouble. A recent blog by TMF Associates, a consultant in the satellite industry, provides ample evidence that SpaceX has big financial woes. The company is far behind its original business plan of raising money for rocket launches and is going to spend a lot of resources this year sending up the planned 1,500 Starlink satellites. TMF says that the company is burning through $100 million per month in operating expenses. A more immediate worry for SpaceX and Starlink is the impact of having to send staff home due to COVID-19. What’s going to happen this year in the supply chain for satellites and their components? According to the figures cited by TMF Associates, Elon Musk and Starlink likely must win big dollars out of the RDOF auction just to keep SpaceX afloat.

Just because LEO satellite broadband has big promise is no guarantee that we’ll ever see an iota of bandwidth out of the sky. OneWeb recently declared bankruptcy and blamed COVID-19, but the company was already out of cash before the pandemic. The company needs a buyer to emerge out of the bankruptcy and the company might just evaporate into obscurity.

I have always been hopeful that Starlink can provide decent rural broadband. This might be the only way to get broadband to the most remote customers in the country. But I’ve been troubled that the company has still never made any public claims about the speeds they will be able to deliver after mass launches, or the price they are planning to charge. On March 20, the FCC granted Starlink up to 1 million licenses for earthside connections to the satellite constellation. That does not sound like a network that is going to solve the broadband shortage for tens of millions of rural homes and businesses.

I’ve always guessed that the company hasn’t disclosed any details because the speeds will be unspectacular – at least in terms of attracting the billions of investor dollars needed to complete the satellite constellation. Much of rural America would be thrilled in Starlink can mass-deliver 50 Mbps or 100 Mbps at an affordable price. But those kinds of speeds won’t attract investors and don’t rate a top tier designation for Starlink in the RDOF auction.

If Starlink ends up in the RDOF auction at a top tier designation without the needed public disclosure then Elon Musk will have sold a bill of goods to the FCC – which is badly searching for a big rural broadband win. However, it will be a disaster if most of this money goes to Starlink and they then deliver mediocre speeds, or high prices – or even worse, never fully deploy. There are still plenty of doubters that Starlink and SpaceX can deploy the 6,000 promised satellites for the first constellation, let alone up to 30,000 more that Musk has promised.

My biggest fear is that a lot of the grant money will go to Starlink and they then fizzle or underperform. If so we will have wasted the biggest pile of grant money ever offered to improve rural broadband. Before Starlink grabs billions of taxpayers dollars – money that each of us paid from the fees added to our telephone and cellular bills – the public deserves a full disclosure from Starlink on the realities of their technology, their business plan, and their financial health. Without that they shouldn’t be allowed within 400 miles of the RDOF auction.

Starlink Making a Space Grab

SpaceNews recently reported that Elon Musk and his low-orbit space venture Starlink have filed with the International Telecommunications Union (ITU) to launch an additional 30,000 broadband satellites in addition to the 11,927 now in the planning stages. This looks like a land grab and Musk is hoping to grab valuable orbital satellite paths to keep them away from competitors.

The new requests consist of 20 filings requesting to deploy 1,500 satellites each in 20 different orbital bands around the earth. These filings are laying down the gauntlet for other planned satellite providers like OneWeb that has plans for 1,910 satellites, Kuiper (Jeff Bezos) with plans for 3,326 satellites and Samsung with plans for 4,600 satellites.

The Starlink announcements are likely aimed at stirring up regulators at the ITU, which is meeting at the end of this month to discuss spectrum regulations. The FCC has taken the lead in developing satellite regulations. Earlier this year the FCC established a rule where an operator must deploy satellites on a timely basis to keep the exclusive right of the spectrum needed to communicate with the satellites. Under the current FCC rules, a given deployment must be 50% deployed within six years and completely deployed within nine years. In September, Spacelink revised its launch plans with the FCC in a way that meets the new FCC guidelines, as follows:

Satellites Altitude (Km) 50% Completion 100% Completion
Phase 1 1,584 550 March 2024 March 2027
1,600 1,110
400 1,130
375 1,275
450 1,325
Phase 2 2,493 336 Nov 2024 Nov 2027
2,478 341
2,547 346
11,927

This is an incredibly aggressive schedule and would require the company to launch 5,902 satellites by November 24, 2024, or 120 satellites per month beginning in November 2019. To date, the company has launched 62 satellites. The company would then need to step launches up to 166 per month to complete the second half on time.

I’m guessing that Starlink is already starting to play the regulatory game. For example, if they can’t meet the launch dates over the US in that time frame, then some of the constellations might not work in the US. If the company eventually launches all of the satellites it has announced, then every satellite would not need to serve customers everywhere. If the ITU adopts a timeline similar to the US, then it’s likely that other countries won’t award spectrum to every one of the Starlink constellations. Starlink will be happy if each country gives it enough spectrum to be effective there. Starlink’s strategy might be to flood the sky with so many satellites that they can provide service anywhere as long as at least a few of their constellations are awarded spectrum in each country. There are likely to be countries like North Korea, and perhaps China that won’t allow any connections with satellite constellations that bypass their web firewalls.

Starlink faces an additional challenge with many of the planned launches. Any satellite with an orbit at less than 340 kilometers (211 miles) is considered as very low earth orbit (VLEO) since there is still enough earth atmosphere at that altitude to cause drag that eventually degrades a satellite orbit. Anything deployed at VLEO heights will have a shorter than normal life. The company has not explained how it plans to maintain satellites at the VLEO altitudes.

At this early stage of satellite deployment, there is no way to know if Starlink is at all serious about wanting to launch 42,000 satellites. This may just be a strategy to get more favorable regulatory rules. If Starlink is serious about this, you can expect other providers to speed up plans to avoid being locked out of orbital paths. We’re about to see an interesting space race.

More Details on Starlink

A few months ago Starlink, the satellite broadband company founded by Elon Musk, launched 60 broadband satellites. Since that launch, we’ve learned a few more things about the secretive venture.

We now know more details about the satellites. Each one weighs about 500 pounds. They are thin rectangular boxes like a flat-panel TV. Much of the surface is a solar panel, and each satellite also extends a second solar panel.

Each satellite comes with a krypton-powered ion thruster to use to navigate the satellite into initial orbit and to avoid future debris when necessary. This may sound like a cutting-edge propulsion system, but it’s been around for many years and the tiny engines create a small amount of thrust by shooting out charged ions of the noble gas – not a lot of thrust is needed to move a 500-pound satellite.

It seems the satellites can’t detect nearby space debris, so Starlink instead connects to the Air Force’s Combined Space Operations Center, which tracks the trajectories of all known space debris. The company will direct satellites to avoid known debris.

Probably the most important announcement for readers of this blog is that the company is likely to only compete in rural areas where there are few other broadband alternatives. This was finally admitted by Musk. There has been hopeful speculation in some parts of the industry that the low-orbit satellites would provide a broadband alternative everywhere, thus supplying a new competitor for cable companies. Since widespread competition generally results in lower prices there was hope that satellite broadband would act to make the whole broadband market more competitive.

We already had an inkling that satellite broadband was going to be rural-only when OneWeb, one of the competitors to Starlink, told the FCC that they were likely going to ultimately need about like 1 million wireless licenses for receivers. While that might sound like a huge number, one million satellite connections spread across the US is not creating a major competitor. We also heard the same message when several of the satellite companies talked about eventually having tens of millions of customers worldwide at maturity. Even with multiple satellite companies competing for customers there probably won’t be more than 3 – 4 million satellite broadband customers in the US – that would make a dent but wouldn’t fix the rural broadband gap. This strategy makes sense for the satellite companies since they’ll be able to charge a premium price for rural customers who have no broadband alternative instead of cutting prices to compete with cable companies.

There has still been no discussion from Starlink or the other competitors on broadband speeds or broadband pricing. It’s been nearly impossible to predict the impact of the satellites without understanding data speeds and total download capacity. The physics suggest that backhaul to the satellites will be the critical limiting factor, so it’s possible that there will be monthly data caps or some other way to control consumption.

One of the most interesting unanswered questions is how the satellites will do backhaul. Landline ISPs of any size today control cost and control data volumes by directly peering with the largest sources of broadband demand – being mostly Netflix, Google, Amazon, and Microsoft. As much as 70% of the traffic headed to an ISP is from this handful of destinations. Engineers are wondering how Starlink will handle peering. Will there be backhaul between satellites or will each satellite have a dedicated link to the ground for all data usage? This is a key question when a satellite is passing over a remote area – will it try to find a place within sight of the satellite to connect to the Internet or will data instead be passed between satellite with connections only at a major hub?

Answering that question is harder than might be imagined because these satellites are not stationary. Each satellite continuously orbits the earth and so a given customer will be handed off from one satellite to the next as satellites pass out of the visible horizon. The company says the receivers are about the size of a pizza box and they are not aimed at a given satellite, like what happens with satellite TV – instead, each receiver just has to be generally aimed skyward. It’s hard to think that there won’t be issues for homes living in heavy wooded areas.

One last interesting tidbit is that the satellites are visible to the naked eye. When the recent launch was first completed it was easy to spot the string of 60 satellites before they were dispersed. Astronomers are wondering what this will mean when there are ten thousand satellites filling the sky from the various providers. Elon Musk says he’s working to reduce albedo (the reflection of sunlight) to reduce any problems this might cause with land-based astronomy. But for stargazers this means there will always be multiple visible satellites crossing the sky.

Delays in Satellite Broadband

One of the big unknowns for rural broadband is if there will ever be a better satellite broadband option. The industry was surprised last year when Elon Musk announced that he planned to blanket the earth with over 4,000 satellites and operate as a worldwide ISP under the newly formed Starlink. These satellites would be launched by SpaceX, another Elon Musk company that that provides commercial rocket launches.

I’ve been following the financial news about the Elon Musk family of businesses, and about SpaceX and Starlink more specifically, since a successful launch of the business could provide another rural option for broadband.

There are several financial analysts predicting that Starlink is now largely on hold, due mostly to funding issues. They report that Starlink has stopped hiring the new employees needed to implement the business plan. Further, it appears that SpaceX needs up to $10 billion to fulfill its own business plan and that any money raised by the company is likely to go there first before Starlink is funded. At a minimum this probably means a major delay in satellite launches for Starlink.

These analysts warn that the SpaceX business plan is not yet solid. The commercial launch business is now seeing other major competitors. ULA, the existing major competitor to SpaceX has been stepping up their game. Boeing is behind Space Launch Systems, another newcomer to the field. Jeff Bezos of Amazon has started Blue Origin and has started construction on a spaceflight center in Florida. There is also a new competitor announced in Japan. The competition is going to drive down the cost of space launches and will also spread the launches among numerous parties, diluting any early advantage enjoyed by SpaceX.

SpaceX was counting on riding the coattails of other commercial launches to get the broadband satellites into space. The company is scheduled to complete 28 launches by the end of this year but is only scheduled so far for 18 launches in 2019. The company is also banking on making money from selling commercial space travel to rich tourists, but the analysts doubt that will be enough revenue to keep the company afloat.

Starlink had originally announced plans to have 40 million broadband subscribers generating $30 billion in annual revenues by 2025. That’s an average revenue per customer of $63 dollars per month. It now looks like the date for getting the company started will be significantly delayed. Starlink launched two test satellites earlier this year, but has not reported how they performed.

I’ve also wondered if Starlink would strongly pursue the residential broadband business in North America. While they will be a great alternative for rural America, they will be just another player in cities. Being an ISP makes a lot more sense in those parts of the world where the company could enjoy a near-monopoly.

In the US and Canada there is probably a lot more money to be made instead by serving the many proposed small cell sites if 5G turns out to be a relevant business plan. Starlink says they can deliver speeds of a gigabit or more to a given customer, but the math behind the bandwidth available at any given satellite means that would only be available to a relatively small number of customers rather than to the whole residential market. Speeds for residential broadband are likely to be at much lower speeds. However, gigabit satellite broadband could be the backhaul solution that 5G needs and might let it escape the bottleneck of needing fiber everywhere. I’ve never seen any discussion of such a partnership, but that’s probably because the satellite business is still somewhat theoretical and at a minimum, delayed from the original projected time line.

Edging Closer to Satellite Broadband

A few weeks ago Elon Musk’s SpaceX launched two test satellites that are the first in a planned low-orbit satellite network that will blanket the earth with broadband. The eventual network, branded as Starlink, will consist of 4,425 satellites deployed at 700 miles above earth and another 7,518 deployed at around 210 miles of altitude.

Getting that many satellites into orbit is a daunting logistical task. To put this into perspective, the nearly 12,000 satellites needed are twice the number of satellites that have been launched in history. It’s going to take a lot of launches to get these into the sky. SpaceX’s workhorse rocket the Falcon 9 can carry about ten satellites at a time. They also have tested a Falcon Heavy system that could carry 20 or so satellites at a time. If they can make a weekly launch of the larger rocket that’s still 596 launches and would take 11.5 years. To put that number into perspective, the US led the world with 29 successful satellite launches last year, with Russia second with 21 and China with 16.

SpaceX is still touting this as a network that can make gigabit connections to customers. I’ve read the FCC filing for the proposed network several times and it looks to me like that kind of speed will require combining signals from multiple satellites to a single customer and I have to wonder if that’s practical when talking about deploying this networks to tens of millions of simultaneous subscribers. It’s likely that their standard bandwidth offering is going to be something significantly less.

There is also a big question to me about the capacity of the backhaul network that carry signal to and from the satellites. It’s going to take some major bandwidth to handle the volume of broadband users that SpaceX has in mind. We are seeing landline long-haul fiber networks today that are stressed and reaching capacity. The satellite network will face the same backhaul problems as everybody else and will have to find ways to cope with a world where broadband demand doubles every 3 years or so. If the satellite backhaul gets clogged or if the satellites get over-subscribed then the quality of broadband will degrade like with any other network.

Interestingly, SpaceX is not the only one chasing this business plan. For instance, billionaire Richard Branson wants to build a similar network that would put 720 low-orbit satellites over North America. Telesat has launched two different test satellites and also want to deploy a large satellite network. Boeing also announced intentions to launch a 1,000-satellite network over North America. It’s sounding like our skies are going to get pretty full!

SpaceX is still predicting that the network is going to cost roughly $10 billion to deploy. There’s been no talk of consumer prices yet, but the company obviously has a business plan – Musk want to use this business as the primary way to fund the colonization of Mars. But pricing is an issue for a number of reasons. The satellites will have some finite capacity for customer connections. In one of the many articles I read I saw the goal for the network is 40 million customers (and I don’t know if that’s the right number, but there is some number of simultaneous connections the network can handle). 40 million customers sounds huge, but with a current worldwide population of over 7.6 billion people it’s miniscule for a worldwide market.

There are those predicting that this will be the salvation for rural broadband. But I think that’s going to depend on pricing. If this is priced affordably then there will be millions in cities who would love to escape the cable company monopoly, and who could overwhelm the satellite network. There is also the issue of local demand. Only a limited number of satellites can see any given slice of geography. The network might easily accommodate everybody in Wyoming or Alaska, but won’t be able to do the same anywhere close to a big city.

Another issue is worldwide pricing. A price that might be right in the US might be ten times higher than what will be affordable in Africa or Asia. So there is bound to be pricing differences based upon regional incomes.

One of the stickier issues will be the reaction of governments that don’t want citizens using the network. There is no way China is going to let citizens bypass the great firewall of China by going through these satellites. Repressive regimes like North Kora will likely make it illegal to use the network. And even democratic countries like India might not like the idea – last year they turned down free Internet from Facebook because it wasn’t an ‘Indian’ solution.

Bottom line is that this is an intriguing idea. If the technology works as promised, and if Musk can find the money and can figure out the logistics to get this launched it’s going to be another new source of broadband. But satellite networks are not going to solve the world’s broadband problems because they are only going to be able to help some small limited percentage of the world’s population. But with that said, a remote farm in the US or a village in Africa is going to love this when it’s available.

Can Satellites Solve the Rural Broadband Problem?

satelliteA few weeks ago Elon Musk announced that his SpaceX company is moving forward with attempting to launch low earth orbit (LEO) satellites to bring better satellite broadband to the world. His proposal to the FCC would put 4,425 satellites around the globe at altitudes between 715 and 823 miles. This contrasts significantly with the current HughesNet satellite network that is 22,000 miles above the earth. Each satellite would be roughly the size of a refrigerator and would be powered by a solar array.

This idea has been around a long time and I remember a proposal to do something similar twenty years ago. But like many technologies, this really hasn’t been commercially feasible in the past and it took improvements to the underlying technologies to make this possible. Twenty years ago they could not have packed enough processing power into a satellite to do what Musk is proposing. But Moore’s Law suggests that the chips and routers today are at least 500 times faster than two decades ago. And these satellites will also be power hungry and weren’t possible until modern solar power cells were created. This kind of network also requires the ability to make huge numbers of rocket launches – something that was impractical and incredibly expensive twenty years ago. But if this venture works it would provide lucrative revenue for SpaceX, and Elon Musk seems to be good at finding synergies between his companies.

Musk’s proposal has some major benefits over existing satellite broadband. By being significantly closer to the earth the data transmitted from satellites would have a latency of between 25 and 35 milliseconds. This is much better than the 600 milliseconds delays achieved by current satellites and would put the satellite broadband into the same range that is achieved by many ISPs. Current satellite broadband has too much latency to support VoIP, video streaming, or any other live Internet connections like Skype or distance learning.

The satellites would use frequencies between 10GHz and 30GHz, in the Ku and Ka bands. Musk says that SpaceX is designing every component from the satellites to earth gateways and customer receivers. For any of you that want to crawl through specifications, the FCC filing is intriguing.

The large number of satellites would provide broadband capability to a large number of customers, while also blanketing the globe and bringing broadband to many places that don’t have it today. The specifications say that each satellite will have an aggregate capacity of between 17 and 23 Gbps, meaning each satellite could theoretically process that much data at the same time.

The specifications say that the network could produce gigabit links to customers, although that would require making simultaneous connections from several satellites to one single customer. And while each satellite has a lot of capacity, using them to provide gigabit links would chew up the available bandwidth in a hurry and would mean serving far fewer customers. It’s more likely that the network will be used to provide speeds such as 50 Mbps to 100 Mbps.

But those speeds could be revolutionary for rural America. The FCC and their CAF II program is currently spending $9 billion to bring faster DSL or cellular service to rural America with speeds that must be at least 10/1 Mbps. Musk says this whole venture will cost about $10 billion and could bring faster Internet not only to the US, but to the world.

It’s an intriguing idea, and if it was offered by anybody else other than Elon Musk it might sound more like a pipedream than a serious idea. But Musk has shown the ability to launch cutting-edge ventures before. There is always a ways to go between concept and reality and like any new technology there will be bugs in the first version of the technology. But assuming that Musk can raise the money, and assuming that the technology really works as promised, this could change broadband around the world.

This technology would likely be the death knell of slower rural broadband technologies like LTE cellular, DSL, or poorly-deployed point-to-multipoint wireless systems. In today’s world the satellites would even compete well with current landline data products in more urban areas. But over a decade or two the ever-increasing speeds that customers will want will ultimately still be better served by landline connections. Yet for the near future this technology could be disruptive to numerous landline broadband providers.

It’s hard to envision the implications from providing fast broadband around the globe. For example, this would provide a connection to the web that is not filtered by a local government. It would also bring real broadband to any rural place that has available power. In the poorer nations of the world this would be transformational.  It’s hard to over-state the potential impacts that this technology could have around our planet if it’s deployed successfully.

Musk says he would like to launch his first satellite in 2019, so I guess we won’t have to wait too long to see if this can work.  I’ll be watching.