Tag Archives: Kuiper

Why BEAD to Kuiper?

There is no question that this has turned into one of the oddest years for broadband during my career. We’ve seen Digital Equity grants killed. We’re seeing the spending for BEAD being cut in half. And maybe oddest of all, we’re seeing States make sizeable BEAD grant awards to Kuiper, although the company isn’t close to having its first broadband customer.

You might think we should have learned a lesson from when Starlink was a big winner in the RDOF reverse auction. The FCC eventually killed those awards after it determined that Starlink was not ready to fulfill a major commitment to serve large numbers of locations in specific geographies.

As of the date of this blog, Kuiper has 153 working satellites in orbit. It has scheduled launches of an additional 72 satellites before the end of the year. It’s worth noting that previous planned launches have all been seriously delayed.

Kuiper was granted permission in July 2020 to deploy a constellation of 3,236 satellites. The satellites will be deployed at three altitudes of 370 miles, 380 miles, and 390 miles. The company says it will begin beta testing when it reaches 578 satellites deployed at 390 miles. To put this into perspective, Starlink launched commercial service when it reached 1,260 satellites. Even with that number, early Starlink customers complained about short service lapses between satellites. Kuiper is under pressure from the FCC to have 1,618 satellites in orbit by mid-2026 to maintain its spectrum licenses.

For the last month, I’ve been perplexed by the magnitude of the BEAD awards being made to Kuiper. As of the date of this blog, Kuiper has tentative BEAD awards for 324,000 locations, second only to Starlink at 427,000. The next biggest award winner is Comcast with 233,000 locations. These are tentative awards, and NTIA is still reviewing and may reject some of the tentative awards to fiber, which would likely increase the awards to satellite.

Kuiper is not nearly as ready as Starlink was with RDOF. The RDOF reverse auction closed at the end of 2020, and Starlink invited selected customers from its waiting list to try the service in January 2021. Starlink started taking pre-orders nationwide in April 2021. Starlink could finally reach every part of the lower 48 states in March 2022.

One of the oddest things about Kuiper is that nobody knows how fast the service will be until it is deployed. Early Starlink customers received speeds that were faster than advertised, but speeds went downhill quickly as customer additions outpaced satellite deployments.

Starlink is only now on the cusp of delivering consistent 100/20 Mbps broadband. According to a report from Ookla, Starlink speed tests in the second quarter of 2022 showed a median download speed of 53.95 Mbps, meaning half of customers had speeds faster than that speed, and half were slower. Median upload speeds in that quarter were 7.5 Mbps. In the first quarter of 2025, Ookla reported that Starlink had climbed to a median broadband speed of 104.71 Mbps download and 14.84 Mbps upload, nearly double the speeds in 2022. The Ookla report said that only 17.4 % of Starlink customers fully met the FCC definition of broadband of 100/20 Mbps per second, with the limiting factor for many customers being slow upload speeds.

I saw a recent quote from a State broadband manager, when asked why he made an award to Kuiper, said it was because they bid the lowest cost per passing. That seems like a cynical response, and it makes me wonder if State Broadband Managers have thrown up their hands and are just following NTIA’s rules without questions.

The chances are good that Kuiper will complete the constellation and will eventually deliver satellite broadband. But history has also shown that new technology companies are often late in meeting commitments and sometimes fail altogether. The BEAD grant process is taking a big chance that Kuiper will meet its obligations and that speeds will be reasonably fast – something that nobody can know until it happens.

BEAD Awards and Satellite

North Carolina, where I live, recently announced its preliminary awards for BEAD. The State has allocated $408.5 million for preliminary BEAD awards out of an allocation of BEAD money to the State of $1.5 billion. That leaves an astounding $1.1 billion on the table and likely unspent. There is some hope that the unspent money, referred to as non-deployment funds, will be at least partially available to the State for broadband-related activities. But that possibility seems to be dwindling every day.

The State had to cover 93,138 homes and 374 community anchor institutions with the BEAD funds. The State made awards to build fiber to 68% of the locations, to deploy cable or fixed wireless to 2% of locations, and to subsidize low-orbit satellite providers for the remaining 30% of locations.

Now that the awards have been announced, we can finally see the proposed BEAD areas by location and technology. I live in Western North Carolina, that was devastated a year ago by Hurricane Helene. There was a lot of hope in this part of the state that most of the awards would go to fiber. The State mostly did okay for Western North Carolina. Of the 29,400 BEAD-eligible locations in this part of the state, over 24,000 went to ISPs who promise to build fiber, leaving 5,300 locations that will get awards for low-orbit satellite. Most of the satellite funding in the State went to Kuiper, which got $15.9 million out of the $18.3 million awarded to satellite. People here are scratching their heads, wondering why a company with only a hundred satellites is being awarded grant funding.

But now that the funding for satellite has sunk in, I’m starting to see what this means for Western North Carolina. First, there are five counties where satellite was awarded to all of the eligible BEAD locations – Clay, Madison, Mitchell, Polk, and Yancey.

What do County officials in those counties tell people? NTIA is giving money mostly to Kuiper and some to Starlink to be able to offer them satellite broadband. All of the BEAD-eligible locations in these counties can already buy satellite broadband from Starlink. The only benefit of BEAD for these residents is that they will probably get a free receiver for enrolling as a BEAD customer. Any hope these counties had of filling in the map with fiber is now gone.

There may be future broadband grants. For example, USDA is planning a new round of ReConnect grants. But even if we assume that ReConnect can be used to cover areas served by satellite, ReConnect won’t make a big dent in areas given satellite from BEAD. So far, with 45 states reporting preliminary BEAD results, the two satellite companies have been awarded $707 million in BEAD. That’s a lot of locations nationwide, and the number is likely going to grow significantly before BEAD grants are final.

It was understood from the time that the BEAD rules were adopted by Congress that there would have to be some remote locations that can’t be reached with fiber. But nobody thought it would be nearly as many as we are seeing. The BEAD grants were originally going to award $45.5 billion in grants, but it now looks like the actual awards will be less than half of that amount.

In North Carolina, a lot of the 5,300 locations in Western North Carolina could have gotten fiber if the state had been able to use more of the $1.1 billion it will be returning to Treasury. I fully understand the desire to be cost-conscious with federal funding, but BEAD was intended by Congress to be a once-in-a-generation opportunity to build long-term broadband infrastructure for a lot of rural America. I always assumed that the BEAD emphasis on fiber first would have meant that States would be judged for the whole portfolio of grants being awarded, and wouldn’t shy from awarding BEAD for areas where construction costs are higher than average.

I have to mention that the proposed grant awards are far from final. I’ve heard from multiple States that NTIA is now asking them to either reduce the amount of funding for some grants or reassign the money to somebody else. That likely will mean even more locations will go to satellite by the time the dust settles and the BEAD grants are final.

A Peek at the New BEAD

The State of Tennessee released a side-by-side comparison of the new Benefit of the Bargain round of BEAD applications compared to its initial round of BEAD applications conducted before the revised BEAD rules.

The side-by-side comparison (file:///C:/A/Articles/Tennessee-BEAD-Comparison.pdf) is interesting and shows some big differences between the two grant rounds:

  • Tennessee received 541 applications in the new Benefit of the Bargain round compared to 298 applications in the original round of BEAD.
  • The low-orbit satellite companies Starlink and Kuiper bid throughout the state. Starlink didn’t submit any applications in the first round but bid almost everywhere in the new BEAD round. Kuiper bid for most of the state in both BEAD rounds. Satellite is clearly going to win a significant amount of grant funding since there were 68 of 173 serving areas that got proposals from one or both satellite providers and no other technology. The satellite companies surprisingly don’t seem to be fazed by bidding in Appalachia.
  • There were surprisingly few proposals for fixed wireless technology, with proposals only made in 12 of the 173 study areas included in the new round of BEAD. Part of the reason for this might be the mountainous and hilly nature of much of Tennessee, but there are plenty of areas in the central and western parts of the state where wireless will work well.
  • Comcast switched technology from the first to the second round. In the first round, the company proposed to build fiber, and in the new round it mostly changed to traditional hybrid fiber/coaxial networks – apparently to be able to bid at a lower cost. This makes me wonder if it’s really cheaper to build copper coaxial cables than fiber or if Comcast is just willing to take less funding.
  • There has always been a big question of whether big ISPs would show up for BEAD. There are three big companies in the new round of BEAD – AT&T, Comcast, and Windstream. The industry has always wondered if AT&T would join BEAD.
  • There are a number of smaller ISPs asking for funding to build fiber that includes cooperatives and municipalities.
  • There are four service areas that had no proposals. The state will have to talk an ISP into serving these areas before they can close out their BEAD grants.

It’s impossible to make any definitive cost comparisons between applicants because the new BEAD rules allow ISPs to request to serve areas smaller than the serving areas suggested by the state. There are also roughly 7,000 fewer passings on the newest BEAD map than were included in the initial BEAD grants. But in general, the comparison shows:

  • Most companies proposing to build fiber bid less the second time, but some of this could be due to fewer eligible passings and not just to a sharpening of the pencil.
  • Fiber ISPs across the country are wondering how much lower other technologies will bid in BEAD. There is only a single company asking to build wireless in the state, and their proposed grant awards are roughly one-third the cost of those asking for fiber in the same study areas. But without knowing more details, that ratio might not mean anything for other states.
  • However, satellite bids are incredibly low, most at 10% or less than proposals to build fiber. There is a map showing the eligible passings by study area, and I eyeball the satellite bids to be in the range of $400- $600 per passing. Kuiper is generally significantly lower than Starlink. These low bids are going to worry ISPs everywhere.

 

Starlink vs. Kuiper

Strand Consult published an article on its website that makes numerous prediction for broadband and related industries in 2025 and compared to the company’s 2024 predictions. It’s fascinating and well worth reading. There is one prediction in particular that got me to thinking.

In its 2024 predictions, Strand Consult compared Elon Musk’s Starlink to Jeff Bezos’ Kuiper and said that Bezos had opened a burger bar while Musk runs an interstellar McDonald’s. The 2025 observation agrees with that assessment.

My first reaction was a chuckle because it’s an amusing analogy. But then I started to think about the companies to see how accurate it is.

Starlink has a huge head start on Kuiper, with 6,000 satellites already in orbit. It’s a no-brainer to say that Starlink is far superior as the two companies sit today. In fact, if Starlink is an interstellar McDonald’s, Kuiper is not even a menu at a burger bar yet.

But Strand is not talking about the current companies, but their long term potential, and that gets more interesting. Kuiper has a huge hurdle ahead to launch enough satellites to have a viable service. All indications are that the company is on the verge of doing so, but until those birds are in the sky, Kuiper is not much more than a blueprint of a company.

But what about after Kuiper has enough satellites to offer decent residential broadband? Starlink will still be ahead as it keep launching new satellites. Starlink plans will always have more a lot more satellites than Kuiper. But Starlink is now beginning the cycle where a lot of it’s launches will be replacing satellites that have hit the short short end of functional life.

The interesting thing about Starlink is that it seems ready to chase a wide range of new opportunities. It offers home broadband, but it’s expanded to also service mobile folks in campers and hikers. Starlink recently hinted that it’s going to chase other revenue opportunities, like encryption services for governments and communications infrastructure for militaries. This will greatly increase earnings per satellite but will divert a lot of broadband capacity to those big bandwidth users.

I think Strand’s observation is based on the belief that Kuiper is likely to concentrate on just selling broadband to people. It’s a boring product compared to many business lines that Starlink will be chasing. And that’s where I think the burger bar analogy gets interesting.

Jeff Bezos is a master of bundling. He makes money by getting people to buy multiple services, and it’s hard to think he won’t do this with satellite broadband. He might bundle this creatively with Amazon Prime! and other products, where the add-ons bring more profit than his satellite broadband alone.

I think the best way to think about Kuiper’s future is to compare it to the FWA cellular broadband being sold by Verizon and T-Mobile. The big ISPs all rail against FWA and say that it’s not adequate broadband. But the public is saying otherwise, and the two companies have taken the market by storm by adding over 10 million new customers while the rest of the ISPs in the country flounder.

My bet is that Kuiper broadband is going to be priced far below Starlink, and just like with FWA cellular broadband, a whole lot of ISP customers, including those who use Starlink today are going to be lured by the price.

The Strand prediction feels right to me. Starlink will be doing big, exciting things around the world for governments and huge corporations. It will be selling connections with a wow factor. Meanwhile, Bezos might be selling nothing more than plain household broadband bundled with other everyday products – but selling a lot of it.

This makes me wonder if ten years from now, the pedestrian Kuiper might have more customers while Starlink might make more money. It’s a big possibility unless Bezos is lured into competing head-to-head with Starlink on the big stuff. I think both companies will claim they are being highly successful, and it will likely be true – with each following a different business model. That might be the inherent advantage of satellite broadband – unlike a normal ISP network that can only pursue opportunities in the immediate geographic vicinity – a satellite company can choose from a wide range of business plans.

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.