Tag Archives: OneWeb

Satellite Broadband Competitors

Starlink gets almost all of the satellite press in the U.S., which is fair since the company now serves a lot of homes and RVs with broadband. The company now has over 4,600 active satellites in orbit, and if it sticks with its original business plan it will eventually have 30,000. But there are a few other satellite companies working in the broadband space that don’t get the press.

Not all competitors want to chase the residential market that is the bread and butter for Starlink. OneWeb went through start-up pains and came out of bankruptcy in 2020. Since then, the company was reorganized to include ownership from the British government and a few other large carrier investors. OneWeb now has 634 satellites in space parked at about 1,200 miles above Earth – twice the height of Starlink. The company is still in the process of constructing the ground stations needed to be able to provide broadband connections around the world.

OneWeb recently announced a successful test of using satellite broadband to connect to Britain’s Royal Fleet Auxiliary ship, Argus. This is the first successful test for the company with a mobile military application, and OneWeb intends to emphasize using its satellites to support governments and militaries around the world.

The U.S. military recently inked an arrangement with Starlink to provide basic broadband, but the military is not comfortable using Starlink satellite broadband for mission-critical applications. There are valid concerns by the military of relying on broadband connections for active troops with an ISP that could refuse service in times of conflict.

The ability of OneWeb to support military operations will be enhanced with the pending merger with the French company Eutelsat, which operates geostationary satellites parked at 22,000 miles above Earth. The combination of the two satellite fleets should be able to guarantee the connections that the military demands. OneWeb is already in the process of upgrading its satellites to support military applications. It’s planning to start replacing existing satellites with ones that contain two separate platforms for military and commercial applications. The company is focusing the rest of its business on bringing broadband to governments, telecommunications carriers, and energy companies.

Another company that is enhancing its satellite fleet to remain relevant is Intelsat. The company has been signing contracts with the militaries of smaller countries who want to make sure that troops always have connectivity. Intelsat can provide reliable broadband to militaries but is also working with countries that want to put up their own military and government satellites.

Intelsat is also exploring the expansion of its fleet by using Medium-Earth-Orbit (MEO) satellites that are parked at between 6,000 and 13,000 miles above Earth. There are a few applications like GPS today that use MEO satellites, and Intelsat thinks there are a lot of advantages to having satellites that have less latency than the higher orbit geostationary satellites.

There still is not a lot of news from Amazon’s Project Kuiper. The company has been trying for several years to launch its first test satellites and has been plagued by problems with the planned use of the RS1 rocket from ABL Space Systems. Amazon now plans to use rocket launches from the United Launch Alliance and others to start getting its fleet into space. Amazon has supposedly made great progress in the design of its satellites and still has plans to launch over 3.200 satellites to compete with Starlink.

For those interested in keeping track of events in space, I highly recommend the Payload newsletter.

Update on Satellite Broadband

It’s been a busy few weeks with announcements from the satellite broadband industry. The industry keeps moving us closer to a time when almost anybody in the world will potentially have access to broadband.

The first announcement came from OneWeb. The company successfully launched 36 new satellites with rockets supplied by NewSpace India Limited. This new rocket company was formed in 2019 and is a public sector undertaking sponsored by the Indian Government and an arm of the India Space Research Organization. This launch is a reminder that many parts of the world are now interested in the space business.

These new satellites bring the OneWeb fleet of satellites up to 462. The company says it will ultimately launch 648 satellites. OneWeb intends to soon open up the constellation to global coverage. OneWeb’s business plan is to reach the remotest places in the world. The company has also been hinting at using the satellites to bring broadband to remote cell towers and to remote outposts for governments and militaries around the world.

Project Kuiper, owned by Amazon and Jeff Bezos is finally ready to hit the skies and plans to launch its first two prototype satellites in early 2023. The company has an ultimate goal of launching a total of 3,236 satellites. The first launch will use rockets from the United Launch Alliance using the new Vulcan Centaur rockets. Project Kuiper has already secured 38 additional launches on the Vulcan Centaur rockets, but the majority of its satellites will be deployed using the ULA Atlas V rockets. The company is rumored to have secured as many as 92 rocket launches.

One of the most interesting pieces of news comes from subscribers of Starlink. The company recently added new language to the terms of service for both residential and business customers that introduces the idea of a data cap. The new terms of service say that customers will get a monthly limit of ‘priority access’, and once that limit is reached, the customer will no longer be prioritized over traffic generated by other customers.

This is interesting from several perspectives. First, Starlink said in the early days of the business that it would never put a cap on usage. And with this announcement, it still hasn’t done that since customers will be free to continue to use broadband for the remainder of the billing cycle.

This feels eerily reminiscent of plans offered by the high-orbit satellite companies where usage slows down after customers reach a monthly usage limit.

Numerous engineers have speculated that any satellite constellation will have a finite capacity to move data, and this announcement hints that that data limit is already foreseeable for Starlink. Of course, the company can continue to launch more satellites and has plans on the drawing board to have as many as 30,000 satellites in its constellation. But for now, with a little over 2,300 satellites, this announcement says that the constellation is probably already getting over-busy at times. The ability to slow down customers is a classic way to serve more customers than the capacity of a network. The technique has been used for years by cellular carriers, and the supposed unlimited cellular data plans are not really unlimited because user speeds get significantly slowed when a customer reaches the subscribed data limit.

Satellite providers face the same dilemma as all ISPs in that the average broadband data consumption by consumers continues to grow at a torrid pace. According to Ookla, the average monthly broadband usage in the US has grown from 215 gigabytes per month in early 2018 to 481 gigabytes in June of this year. This growth puts a strain on all networks, but it has to be more of a problem for a satellite constellation which is going to have more backhaul restrictions than a landline network fed by fiber.

Bringing Broadband to the Arctic

The Arctic region has largely been left out of the broadband arena in the past due to the high cost of building last-mile broadband infrastructure. The primary broadband available in the region has been provided for decades by Iridium Communications, which provided only low-bandwidth connections capable of supporting satellite phones and low-bandwidth monitoring devices. The lack of broadband looks to be changing as multiple satellite companies are targeting the region as a good business opportunity.

Starlink and OneWeb already have polar-orbiting satellites that can serve the region. In fact, the original OneWeb business plan focused on the Arctic as its first priority due to the lack of competition.

Telesat has negotiated to connect to indigenous communities in the Arctic through a partnership with the Canadian government. The government has already provided some grants and last year announced a financing deal that will invest $690 million in preferred equity and $790 million in loans to enable Telesat Lightspeed to complete its low-orbit satellite constellation. The government will also receive warrants that can be exchanged in the future for additional shares of Telesat stock. This adds to the $400 million provided by the government of Quebec. The low-orbit constellation will begin with 298 satellites positioned to deliver speeds up to a gigabit across Canada.

SES plans to serve the Arctic with a fleet of medium-earth-orbit satellites that should start launching by the end of the year. MEO satellites deploy in orbits higher than 1,200 miles but closer than the geostationary satellites at 22,000 miles above the earth. The biggest challenge for these satellites is finding orbits that avoid the high-energy Van Allen radiation belts. The SES business plan is to provide high-bandwidth connections to remote places and in addition to the Arctic, will be pursuing broadband for cruise ships, cellular towers, and government networks.

The Arctic Satellite Broadband Mission (ASBM) is being built by Northop Grumman and is a joint venture between Inmarsat, the British satellite operator, the Norwegian Ministry of Defense, and the U.S. Air Force. These satellites are aimed at providing cellular telephone service and also supporting the military. Two satellites are scheduled to launch by the end of this year and will have highly elliptical orbits that will vary between 5,000 and 27,000 miles above the earth. The orbits can be changed to avoid radiation storms.

The Russian Satellite Communications Company (RSCC) announced plans to launch four satellites in highly elliptical paths within a few years to serve the far north polar regions. I have to wonder if these plans are on hold due to the severe economic sanctions in place against the country.

Satellite broadband is an awesome solution for places where there are likely to be no alternatives. I understand why rural residents of the U.S. are flocking to Starlink since, for many of them, it’s the only workable broadband solution on the horizon. I continue to wonder how satellite broadband will stay competitive in the lower forty-eight after the many grant-funded networks are finally built. But there will always be homes in the U.S. out of reach of landline networks or customers that don’t like the landline ISPs, so it would not be surprising to see the satellite companies with a small but steady customer base south of the Arctic for the long-haul.

But satellite broadband ought to dominate the Arctic for decades to come. It can bring decent bandwidth to remote places that may never be candidates for building landline networks. It will be an interesting change for the area as it goes from barely connected to fully connected.

Can Satellite Broadband be Affordable?

When we first heard of the possibility of broadband from low-orbit satellites, there was a lot of speculation that the technology could bring affordable broadband to the masses around the globe. The latest announcement from Starlink shows that affordable broadband is probably not coming in the immediate future.

Starlink announced a premium tier of service with a $500 monthly fee for 150-500 Mbps. The receiver has a one-time cost of $2,500. The product offers faster speeds by doubling the size of the receiving area of the receiver. These prices are a big step up from the current Starlink broadband product that offers 50-150 Mbps service for $99 per month with a $500 fee for the receiver.

I’ve been thinking about the issues faced by a satellite constellation owner in trying to recover the cost of the network to make a profit. At current costs, it’s incredibly expensive to launch Starlink satellites. It’s rumored that it currently costs about $60 million for one launch that can place 49 satellites into orbit. That’s a cost of over $1.2 million per satellite before considering the cost of the satellite hardware. But this cost is supposed to be dropping due to the ability to reuse rocket components, with near-future costs soon to be around $30 million per launch. That would still mean a cost per satellite of $600,000 each. Elon Musk says his goal is to get the cost per launch down to $10 million, and that would still mean a launch cost per satellite of over $200,000.

These costs wouldn’t be bad if the satellites had some longevity, but it’s estimated that low-orbit satellites will remain in orbit from 5-7 years, meaning a satellite owner must recover its launch costs in a relatively short period of time.

This is not to say that Starlink can’t make money, and I have to assume that the current prices are set so that the company can become profitable. But it’s hard to imagine lowering prices until a satellite company has a large enough customer base to cover operating costs and the continued cost of replacing satellites.

Starlink also admits that it is subsidizing the home receivers it sells for $500. But with mass production, that cost is likely to plummet. But for now, it’s one more financial hurdle to overcome.

The other component of cost to consider is the cost of backhaul. In the U.S., it will be easy for Starlink to build a series of earth stations that can download and upload data with the satellite constellation. We have fiber backhaul routes crisscrossing the country, and there are numerous carriers willing to negotiate good prices with Starlink for connecting earth stations to the Internet.

But this is not going to be so in much of the rest of the planet. Consider places like inland Africa where there are far fewer fiber middle-mile routes, and where the amount of bandwidth is limited and expensive. Lack of backhaul could make it a challenge to operate in markets like Africa.

There are also countries that will block Starlink or that might impose big license fees to deliver the broadband. China is unlikely to allow broadband connections that bypass the Great Firewall of China. India is discussing license fees with Starlink, and could make it expensive to do business there. Those two countries alone contain 36% of the world’s population.

The last complexity faced by any satellite broadband company will be competition from other satellite owners. It’s likely that within five years that we’ll see worldwide coverage from Starlink, OneWeb, and Project Kuiper – and other companies and countries are considering satellite constellations. The industry math will quickly get challenging if there is any downward pressure on prices through competition. Starlink is only going to be able to sell $500 premium connections if no other satellite company offers something less expensive.

Elon Musk has said many times in the last year that there is no guarantee of financial success at Starlink and that the company could easily go bankrupt. The company must be losing money during this early beta stage, but that’s experienced by all new ISPs. Let’s also not forget the stated original reason for funding Starlink. The goal was to create a cash cow that would spin off the funding needed to settle Mars. The need to generate cash isn’t going to tempt the company to have affordable rates. There is a lot of moving parts to operate a satellite business, with many of the long-term costs still unknowable. It will be interesting watching the satellite companies figure out the business on the fly.

Keeping Track of Satellites

The topic of satellite broadband has been heating up lately. Elon Musk’s StarLink now has over 540 broadband satellites in the sky and is talking about starting a few beta tests of the technology with customers. OneWeb went into bankruptcy but it being bought out by a team consisting of the British government and Bharti Airtel, the largest cellular company in India. Jeff Bezos has continued to move forward with Project Kuiper and the FCC recently gave the nod for the company to move ahead.

These companies have grandiose plans to launch large numbers of satellites. Starlink’s first constellation will have over 4,000 satellites – and the FCC has given approval for up to 12,000 satellites. Elon Musk says the company might eventually grow to over 30,000 satellites. Project Kuiper told the FCC they have plans for over 3.300 satellites. The original OneWeb plan called for over 1,200 satellites. Telesat has announced a goal of launching over 500 satellites. A big unknown is Samsung, which announced a plan a year ago to launch over 4,600 satellites. Even if all of these companies don’t fully meet their goals, there are going to be a lot of satellites in the sky over the next decade.

To put these huge numbers into perspective, consider the number of satellites ever shot into space. The United Nations Office for Outer Space Affairs (NOOSA) has been tracking space launches for decades. They reported at the end of 2019 that there have been 8,378 objects put into space since the first Sputnik in 1957. As of the beginning of 2019, there were 4,987 satellites still in orbit, although only 1,957 were still operational.

There is a lot of concern in the scientific community about satellite collisions and space junk. Low earth satellites travel at a speed of about 17,500 miles per hour to maintain orbit. Satellites that collide at that speed create many new pieces of space junk, also traveling at high speed. NASA estimates there are currently over 128 million pieces of orbiting debris smaller than 1 square centimeter, 900,000 objects between 1 and 10 square centimeters, and 22,000 pieces of debris larger than 4 inches.

NASA scientist Donald Kessler described the dangers of space debris in 1978 in what’s now described as the Kessler syndrome. Every space collision creates more debris and eventually there could be a cloud of circling debris that will make it nearly impossible to maintain satellites in space. While scientists think that such a cloud is almost inevitable, some worry that a major collision between two large satellites, or malicious destruction by a bad actor government could accelerate the process and could quickly knock out all of the satellites in a given orbit.

There has only been one known satellite collision when a dead Russian satellite collided with an Iridium communications satellite over a decade ago. That satellite kicked off hundreds of pieces of large debris. There have been numerous near misses, including with the manned Space Station. There was another near-miss in January between the defunct Poppy VII-B military satellite from the 1960s and a retired IRAS satellite that was used for infrared astronomy in the 1980s. It was recently reported that Russia launched a new satellite that passed through one of StarLink’s newly launched swarms.

The key avoiding collisions is to use smart software to track trajectories of satellites and provide ample time for the satellite owners to make corrections to the orbital path to avoid a collision. Historically, that tracking role has been done by the US military – but the Pentagon has made it clear that it is not willing to continue in this role. No software is going to help avoid collisions between dead satellites like the close-call in January. However, all newer satellites should be maneuverable to help avoid collisions as long as sufficient notice is provided.

A few years ago, the White House issued a directive that would give the tracking responsibility to the Commerce Department under a new Office of Space Commerce. However, some in Congress think the proper agency to track satellites is the Federal Aviation Agency which already tracks anything in the sky at lower levels. Somebody in government needs to take on this role soon, because the Pentagon warns that its technology is obsolete, having been in place for thirty years.

The need for tracking is vital. Congress needs to decide soon how this is to be done and provide the funding to implement a new tracking system. It would be ironic if the world solves the rural broadband problem using low orbit satellites, only to see those satellites disappear in a cloud of debris. If the debris cloud is allowed to form it could take centuries for it to dissipate.

An Update on LEO Satellites

A lot of rural America continues to hope that low orbit satellite (LEO) service will provide a broadband alternative. It’s been a while since I’ve covered the status of the companies proposing to deploy constellations of satellites for providing broadband.

In March, OneWeb filed for Chapter 11 restructuring when it was clear that the company could not raise enough cash to continue the research and development of the satellite product. In July, a bankruptcy court in New York approved a $1 billion offer to take over the company filed jointly by the British Government and Bharti Airtel. Airtel is India’s largest cellular company. The restructured company will be owned with 45% stakes by Britain and Bharti Airtel, with the remaining 10% held by Softbank of Japan, the biggest original shareholder of OneWeb. Other earlier investors like the founders, Intelsat, Totalplay Telecommunications of Mexico, and Coca-Cola have been closed out of ownership by the transaction.

There is speculation that the British government purchased the company to create tech jobs in the country and that all R&D and manufacturing for OneWeb would immediately shift to England from Florida.

Of more concern for rural broadband is speculation that the mission of the company will change. Greg Wyler, the original CEO of the company had a vision of using the satellites to bring broadband to parts of the world that have no broadband. He chose a polar orbit for the satellites and was going to launch the business by serving Alaska and the northern territories of Canada like Nunavut. I’ve seen speculation that the revised company is likely to concentrate instead on wholesale connections to telcos and ISPs, such as providing backhaul for rural cell sites.

Elon Musk’s satellite venture StarLink was recently in the news when the company said it was going to raise ‘up to $1 billion’ to continue the development of the business. The company still has a long and expensive road to success. The company has raised over $3.5 billion to date before this latest raise, but a recent Bloomberg article estimates that the company will need to raise an additional $50 billion between now and 2033, which is when the company is projected to be cash-positive.

StarLink now has over 540 satellites in orbit, but the business plan calls for over 4,000. Keeping the constellation in place will be an ongoing challenge since the satellites have an estimated life of 5 to 6 years. Starlink will forever have to be launching new satellites to replace downed satellites.

The US government and the FCC seem to be in StarLink’s corner. The FCC is still evaluating if it will allow StarLink to participate in the upcoming RDOF grants auction in October. It would be incredibly unusual to award giant federal grants for a product that is still on the drawing board and for an ISP that hasn’t raised 10% of their needed funding.

StarLink recently made a very-public announcement that it was looking for beta customers – likely as a way to spur fundraising. Early Starlink customers will likely see blazingly fast speeds, which would happen for any broadband technology that could devote the bandwidth from one server to connect to one or two customers. The bandwidth delivered on a fully-subscribed satellite network will be far less – but that won’t stop the company from using a beta test to set unrealistic expectations of future satellite broadband speeds.

The last LEO player that is still active is Jeff Bezos venture that is still using the preliminary name of Project Kuiper. The FCC recently approved the licensing for Project Kuiper to move forward. Immediately following the FCC approval, Jeff Bezos announced that he will be investing $10 billion in the business. This ability to self-fund likely gives Project Kuiper an advantage over other competitors. It was reported that just for the month of July that Bezos’s net worth had climbed by $9 billion.  Funding is going to be a constant hurdle for the other two major competitors, but Project Kuiper might be the fastest to deploy if funding is not an issue.

The FCC approval pf Project Kuiper and the funding announcement by Bezos came at the same time that Starlink is seeking another round of financing and is trying to get into the FCC auction. It’s going to be interesting to see how the battle between two billionaires unfolds – my bet is on Amazon due to easy access to funding.

Low-orbit Satellite Security

I’ve been watching the progress of the low-orbit satellite providers which are promising to bring broadband solutions across the planet. There has been some serious movement since the last time I discussed their status.

On January 29, Starlink launched its latest round of low-orbit satellites, bringing the number in space to 242. Not all of these will be delivering broadband. The first half dozen satellites were test units to try out various concepts. Starlink will use 10 of the most recent batch to test the ability to ‘de-orbit’ and bring satellites back to earth.

The latest Starlink satellites weigh 260 kilograms, up from 227 kilograms for the first satellites launched in May 2019. The latest satellites are designed to be 100% demisable, meaning they will completely burn up in the atmosphere upon reentry.

Starlink still has a long way to go to meet its business plan. If they meet all of the planned launches this year, they’ll have 1,500 satellites in orbit. They’ve told the FCC that they plan to have 6,000 satellites in orbit by the end of 2024 and 12,000 by the end of 2027. As they add new satellites the company must also replace the short-lived satellites that only have a planned life of about five years. That means by 2026 they’ll have to launch 1.200 satellites a year forever just to maintain the first fleet of 6,000 satellites.

We also saw some progress being made by OneWeb, the satellite company founded by Greg Wyler with backing from Virgin, Airbus, SoftBank, and Qualcomm. The company launched 6 satellites last year. They recently launched 34 more satellites and the company’s goal is to put 200 satellites in orbit this year.

These launches show that the industry is for real and that over the next few years we’ll see big numbers of low-orbit satellites in the sky. We finally heard just last week from Elon Musk that he does not intend to compete with rural ISPs and will only sell satellite broadband in the most remote places. He still hasn’t disclosed prices – but if he doesn’t compete with existing ISPs he’s not going to have to be competitively priced. Starlink hints that it might add some customers by the end of this year, but the serious launch of broadband service will start next year.

It’s starting to feel odd that these companies won’t talk about broadband speeds. Like with any broadband technology, the degree of oversubscription will affect broadband performance. The first customers to use the satellites might see blazingly fast speeds – but speeds will lower quickly as customers are added. One of the biggest temptations facing these companies will  be to oversubscribe the technology.

Like with any new technology, satellite broadband brings a new set of worries. There is a recent article on Fastcompany by William Akoto asking how we’re going to protect satellite fleets from hacking. If the proposed satellite constellations grow as promised, there will be tens of thousands of satellites circling the earth delivering broadband. Akoto points out that the satellite supply chain is far from secure and open to tampering. The satellites are being constructed by a number of different vendors using off-the-shelf components. The satellites are not much more than a router connected to a solar array.

It’s clear that there are virtually no hardware or software system that can’t be hacked by a determined effort. The satellites will fly over every country on earth, giving ample opportunity for hackers to hack into satellites directly overhead. The satellites will be controlled by earth station hubs, which also might be hacked in the same manner that happens to big corporate server farms.

The consequences of hacking for satellites are direr than with land-based technology. Hackers could turn satellites off making them dead weights in space. They could rearrange the solar collectors to make them run out of power. Hackers could direct all satellites to come back to earth and burn up in the atmosphere.

In the worse scenario, hackers could crash satellites together creating a lot of space debris. NASA scientist Donald Kessler described the dangers of space debris in 1978 in what’s now described as the Kessler syndrome. Every space collision creates more debris and eventually creates a cloud of circling debris that makes it impossible to maintain satellites in space. Many scientists think such a cloud is almost inevitable, but malicious hacking could create such a cloud quickly.

Hacking won’t only affect rural broadband. The ability of satellites to connect remote locations into a unified network is going to be attractive to a wide range of industries. It’s not hard to imagine the satellite constellations being used to connect to critical infrastructure like rural electric grids, rural dams, and industries of all sorts that connect to rural or third-world locations.

Industry experts are already calling for regulation of satellite security. They believe that governments need to step in to mandate that satellite constellations be as safe as possible. While this could be done voluntarily by the industry there doesn’t seem to be any such effort afoot. The consequences of not getting this right could be a disaster for the planet.

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.

The Impact of Satellite Broadband

Recently I’ve had several people ask me about the expected impact of low-orbit satellite broadband. While significant competition from satellites is probably a number of years away, there are several major initiatives like StarLink (Elon Musk), Project Kuiper (Amazon), and OneWeb that have announced plans to launch swarms of satellites to provide broadband.

At this early stage, it’s nearly impossible to know what impact these companies might have. We don’t know anything about their download and speed capacity, their pricing strategy, or their targeted market so it’s impossible to begin to predict their impact. We don’t even know how long it’s going to take to get these satellites in space since these three companies alone have plans to launch over 10,000 new satellites – a tall task when compared to the 1,100 satellites currently active in space.

Even without knowing any of these key facts, BroadbandNow recently grabbed headlines around the industry by predicting that low-orbit satellites will bring an annual savings of $30 billion for US broadband customers. Being a numbers guy, I never let this kind of headline pass without doing some quick math.

They explain their method of calculation on their web site. They are making several major assumptions about the satellite industry. First, they assume the satellite providers will compete on price and will compete in every market in the country. Since the vast majority of American live in metro areas, BroadbandNow is assuming the satellite providers will become a major competitor in every city. They also assume that the satellites will be able to connect to a huge number of customers in the US which will force other ISPs to lower prices.

Those assumptions would have to be true to support the $30 billion in projected annual consumer savings. That is an extraordinary number and works out to be a savings of almost $20 per month for every household in the US. If you spread the $30 billion over only those households that buy broadband today, that would be a savings of over $23 per month. If your further factor out the folks who live in large apartments and don’t get a choice of their ISP, the savings jumps to $27 per household per month. The only way to realize savings of that magnitude would be from a no-holds-barred broadband price war where the satellite providers are chewing into market penetrations everywhere.

I foresee a different future for the satellite industry. Let’s start with a few facts we know. While 10,000 satellites is an impressive number, that’s a worldwide number and there will be fewer than 1,000 satellites over the US. Most of the satellites are tiny – these are not the same as the huge satellites launched by HughesNet. Starlink has described their satellites as varying in size between a football and a small dorm refrigerator. At those small sizes these satellites are probably the electronic equivalent of the OLT cabinets used as neighborhood nodes in a FTTH network – each satellite will likely support some limited and defined number of customers. OneWeb recently told the FCC in a spectrum docket that they are envisioning needing one million radio links, meaning their US satellites would be able to serve one million households. Let’s say that all of the satellite providers together will serve 3 – 5 million homes in the US – that’s an impressive number, but it’s not going to drive other ISPs into a pricing panic.

I also guess that the satellite providers will not offer cheap prices – they don’t need to. In fact, I expect them to charge more than urban ISPs. The satellite providers will have one huge market advantage – the ability to bring broadband where there isn’t landline competition. The satellite providers can likely use all of their capacity selling only in rural America at a premium price.

We still have no real idea about the speeds that will be available with low-orbit satellite broadband. We can ignore Elon Musk who claims he’ll be offering gigabit speeds. The engineering specs show that a satellite can probably make a gigabit connection, but each satellite is an ISP hub and will have a limited bandwidth capacity. Like with any ISP network, the operator can use that capacity to make a few connections at a high bandwidth speed or many more connections at slower speeds. Engineering common sense would predict against using the limited satellite bandwidth to sell gigabit residential products.

That doesn’t mean the satellite providers won’t be lured by big bandwidth customers. They might make more money selling gigabit links at a premium price to small cell sites and ignoring the residential market completely. It’s a much easier business plan, with drastically lower operating costs to sell their capacity to a handful of big cellular companies instead of selling to millions of households. That is going to be a really tempting market alternative.

I could be wrong and maybe the satellite guys will find a way to sell many tens of millions of residential links and compete in every market, in which case they would have an impact on urban broadband prices. But unless the satellites have the capacity to sell to almost everybody, and unless they decide to compete on price, I still can’t see a way to ever see a $30 billion national savings. I instead see them making good margins by selling where there’s no competition.