Tag Archives: SpaceX

Starlink’s Interesting Approach to Cellular

There was an announcement on SpaceX’s first-ever earnings call that got the attention of the wireless industry. SpaceX said on the call that StarLink would enter the terrestrial cellular business by building a large number of cell sites provisioned with satellite backhaul. The company would leverage the power of its next-generation V3 satellites along with an increasingly larger fleet of satellites to provide the backhaul to feed cell sites.

It’s impossible to know if the company is serious about this. Elon Musk has always made exaggerated claims of what he will be doing in the future, and many of his claims never came to fruition. On the same call, Elon also said that the company plans to build factories on the moon.

There are a number of obstacles that stand in the way of SpaceX pulling this off. First is the basic question of why anybody would wade into the U.S. cellular market that has become increasingly competitive. Starlink could probably only gain significant numbers of customers by lowering prices, and that brings into question how profitable this might be.

Cellular networks in cities have already boosted cellular data speeds to 300 Mbps or faster, so Starlink wouldn’t have any technological advantage. Perhaps the real goal of the company is not the U.S. market, but populous countries like Nigeria, which have inferior cellular networks and a population that relies on cellular much more than on landline broadband.

At least for now, Starlink doesn’t have enough spectrum to pull this off. They are acquiring 65 MHz of spectrum from EchoStar, which is not nearly enough to compete for terrestrial cellular service. However, after the recent IPO, the company is awash with cash and could buy more spectrum. In the OBBB, Congress mandated the FCC to find 800 MHz of midrange spectrum for auction, so there will be plenty of spectrum coming into play over the next decade.

Another big question for me is the overall bandwidth needed to feed a cellular network. Most cell sites today are fed with 5-10 Gigabit backbone connections. The new Starlink constellations will have a greatly increased amount of capacity, but the backhaul to hundreds of thousands of cell sites would have to eat into the overall capacity of the satellite constellation. SpaceX must be counting on being able to grow far past the current 15,000 satellites currently approved by the FCC, and in fact, they have requested to grow the constellation to 100,000 satellites. The increasing usage to support cellular would also mean the need for a lot more earth stations to feed the network.

Perhaps the biggest obstacle would be getting started. The three big carriers all have roaming agreements with each other, but they might decide not to make it easy for a new competitor to enter the market. Very few people would buy a cellular service that wouldn’t work when they travel to other parts of the country. There was speculation after SpaceX made this announcement that the real purpose was to pressure the big cellular companies into giving the company an MVNO deal (resold cellular) so it could combine terrestrial resold cellular with satellite cellular. That’s an interesting dilemma for the big cellular companies, because if SpaceX had an MVNO, it could then selectively build cell sites over time.

SpaceX will likely never stop surprising the market with big ideas that are outside of the box. While this one is certainly doable, it wouldn’t be easy unless one of the big cellular companies blinks and lets SpaceX into the cellular business through the backdoor of an MVNO. But you can never say that SpaceX wouldn’t do this even without that easy onramp.

Satellite News August 2026

Starlink’s Capacity Growing. An analysis by MoffettNathanson estimated a huge increase in potential capacity based upon a migration to the new V3 rockets. The analysis said that the current capacity with the V2 satellites is between 8 and 16 customers per square mile, which limits the overall penetration to 2% – 3% of U.S. households, even when the current 15,000-satellite constellation is completed. The new V3 satellites should bring a lot of additional capacity, including the opportunity to sell broadband in denser population areas. MoffettNathanson estimates the overall capacity, assuming that two-thirds of satellites are upgraded to V3 by 2030, is between 24% – 35% of households, or the capacity to serve 35 million to 50 million potential subscribers. This increase is fully dependent on the company being able to regularly launch the new Starship rocket, which will only be able to carry 60 V3 satellites per launch. SpaceX successfully launched a Starship rocket on July 27 that carried twenty V3 rockets into space. This was a test, and the satellites were allowed to quickly deorbit.

Satellites Monitoring Wildfires. Satellites have been used to view the progress of wildfires, but to a limited degree of effectiveness. Existing satellites don’t notice fires until they have spread to several acres, and they typically only transmit a picture of a wildfire every twelve hours. The nonprofit Earth Fire Alliance has launched three satellites that are the beginning of a fifty-satellite constellation to detect and track wildfires in real time. The full constellation won’t be in place until 2030. The satellites are sensitive and will be able to see a fire as small as a 5-meter square. When fully deployed, the satellites will be able to give an update on a fire every twenty minutes.

A Big Drop in Satellite BEAD Locations. There is a significant drop in the number of eligible locations for the BEAD grant awards made to Starlink and Amazon Leo. The NTIA analysis compared the location of BEAD awards to the new FCC mapping fabric. The new mapping identified 50,578 BEAD locations that are no longer considered as mapping points, meaning they are probably buildings like barns and sheds. The analysis showed 262,053 locations that are now considered to be served by broadband of at least 100/20 Mbps. Finally, there are 61,512 locations that would be excluded if NTIA accepts broadband provided by unlicensed spectrum to qualify as served. Altogether, these reductions could reduce the amount awarded to Starlink and Amazon LEO by at least $354 million. Note that these same kinds of reductions are also being made to fiber and other technology awards as NTIA continues to nibble away at the total BEAD dollars being awarded.

 Texas Broadband Office Facing a BEAD Audit. Lt. Gov. Dan Patrick and House Speaker Dustin Burrows called for an audit of the Texas Broadband Development Office (BDO). The audit is coming from industry allegations that BDO too heavily favored satellite broadband over fiber and other technologies. The BDO recently put the entire BEAD grant program in the state on hold, seemingly due to this issue. Even if the accusations are proven to be true, it seems highly unlikely that NTIA would allow for higher dollar awards if the State wanted to re-award canceled satellite locations to a more expensive technology.

SpaceX Rocket Hit the Moon. The discarded upper portion of a rocket launched in January 2025 by SpaceX crashed into the moon on August 5 at a speed of 5,400 per hour, creating a 60-foot-wide crater. The original launch was to deliver a moon lander.

Data Centers in Space. Early this year, SpaceX announced plans to put one million satellites in space to create a huge AI data center. Since then, additional applications for AI satellites have been filed with the FCC, including 88,000 satellites by StarCloud, 51,600 satellites by Blue Origin, and 20,000 by Cowboy Space. These are just the U.S. companies, and there are discussions around the world of creating orbiting data centers.

SpaceConnect Association Launched. In an inevitable move, the companies in the space business created a trade association that will propose and lobby worldwide for regulations that will “enable innovation, investment, and expanded connectivity through next-generation satellite networks”. The inaugural Board consists of Chair, Ashleigh de la Torre, Vice President of Public Policy at Amazon; Secretary, Michael Schwartz, Senior Vice President, Corporate and Business at Telesat; and Treasurer, Barbee Ponder IV, General Counsel and Vice President of Regulatory Affairs at Globalstar

SpaceX Wants to Handle the World’s Broadband

In a recent request filed with the FCC, Starlink asked to increase the size of its broadband satellite fleet to 100,000. This coincided with the FCC’s announcement that it wants to ease the process for approving new satellites, so I have to think the idea will sail through. There was one extraordinary statement in this filing that is the topic of today’s blog. SpaceX said it has the goal of handling the majority of the world’s Internet traffic. Elon Musk has always been one for huge hyperbole, so statements like this are not surprising. I want to examine a few reasons why that goal is ridiculous.

No carrier handles a large percentage of the world’s internet traffic today. According to statistics shown on Cloudflare Radar, the company with the biggest percentage of worldwide traffic today is Amazon, with 3.5% of all traffic. The companies that carry more than 2% of worldwide traffic include Cloudflare (2.2%), Comcast (2.5%), Amazon (2.4%), Microsoft (2.2%), Reliance/Jio (2.1%), and AT&T (2.1%). SpaceX is on the worldwide list at number 18 today, already carrying 0.7% of the world’s Internet traffic. SpaceX would have to grow by five times to catch Amazon. But that would still be a long way from carrying a majority of the world’s traffic, and it’s hard to imagine any carrier growing to carry even 10% of the world’s traffic.

Starlink has built an impressive ISP business by gaining 12 million broadband customers. Worldwide, there are over 6 billion Internet users, about 74% of the world’s population. If you assume an average of 2.5 people per household, Starlink today represents 0.5% of all residential Internet users. But residential broadband, as large as it is, is still only a fraction of the world’s Internet traffic. Again, according to Cloudflare, bots are currently making 56.8% of all web connections.

Starlink largely has a near-monopoly for satellite broadband today, but that’s going to change over the next five years. There are major plans by others to compete with Starlink, including Amazon, China’s Guowang, Shanghai’s Quinfan, Blue Origin’s TeraWave, and Eutelsat’s OneWeb. Competition will dilute Starlink’s share of the satellite market.

Love him or hate him, Elon Musk has aligned himself with politics, which is unusual for somebody operating a giant retail business. There are already many countries that ban Starlink, and this list could grow. Even in countries where Starlink is available, there are a lot of people who would never buy service from an Elon Musk-backed company.

I think the biggest reason is that there is a lot more risk associated with trusting your broadband to satellites. A massive 1,000-year solar flare could knock a lot of satellites out of commission. There is a real threat of a spreading cloud of space debris killing a lot of satellites, as predicted by the Kessler syndrome. There is a chance that satellites could be knocked out deliberately during a war or by a rogue nation.

Fiber networks face no similar worldwide threats. Large users of broadband are never going to trust their traffic to satellite. Don’t expect to see data centers, universities, governments, or large corporations favor satellite connections over fiber.

I have to admit that I like Elon Musk’s brashness, but his claims are always overboard. I think he has a better chance of establishing his colony on Mars than of capturing the majority of the world’s Internet traffic.

Satellite News June 2026

FCC Approves AST SpaceMobile Constellation. The FCC approved an application from AST SpaceMobile to launch an additional 248 low-orbit satellites to deliver mobile service using 700 MHz and 800 MHz spectrum. These is a premium spectrum for this use since it carries further and penetrates clouds and storms better than higher frequencies. A year ago, the FCC gave the company permission to test direct-to-device connectivity using Band 14 spectrum, which is 700 MHz spectrum that had previously been reserved for public safety and first responder emergency use.

AT&T is Looking for Multiple Partners for D2D. AT&T Chairman and CEO John Stankey said recently that the company is looking at additional partners other than its current partnership with AST SpaceMobile for offering direct-to-device cellular services. He noted that SpaceX should have better capacity after it purchased spectrum from EchoStar. He also noted that Amazon will be a player when it completes the acquisition of Globalstar in 2027. Stankey noted that he is not interested in helping the D2D satellite companies disrupt the terrestrial satellite business, and that he believes that D2D is an alternate service that makes the most sense where cell networks don’t reach.

UK Launches D2D Service. The UK became the first country in Europe where a cellular company is offering D2D service for smartphones that is integrated into normal cellular service without the need for a special phone or a separate app. Virgin Media O2 uses the Starlink constellation and licensed 1800 MHz spectrum to offer an add-on service. Virgin customers can add satellite cellular service for £3 per month or can get the service for free with premium cellular packages. The initial service offers messaging and data, and works automatically in areas where Virgin doesn’t have good cell coverage.

This action in the UK is prompting the European Union to accelerate its effort to finalize spectrum for D2D service. The EU’s current spectrum plans include using 2 GHz spectrum, which is prized by LEO satellite companies, but Starlink and Amazon Leo are worried about current EU plans to allocate most of this spectrum to European satellite companies.

SpaceX IPO. In preparation for the SpaceX IPO on Nasdaq, the company announced that it had $13 billion in losses since the beginning of 2023. In 2025, the company had almost $18.7 billion in revenue but had an overall loss of $4.9 billion. The recent losses were driven by xAI, the company’s artificial intelligence venture that was founded in 2023.

The SpaceX IPO (SPCX) sold 556 million shares at a price of $135 on June 12. On the day when trading opened, the price started at $150 per share and closed at $160.95 at the end of the first trading session. The stock climbed to as much as $216 per share before ending around $190 per share yesterday.

Blue Origin Disaster. Amazon’s space ventures suffered a setback when the heavy-duty New Glenn rocket exploded on the launch pad in late May at the Canaveral Space Force Station in Florida. This will likely slow the launch of Amazon Leo, as this rocket was scheduled to carry 48 satellites into space. This also probably delays the company’s planned moon mission. The FCC had recently granted Amazon a requested delay in meeting the dates for activating the broadband satellite constellation.

100 Million Starlink Subscribers? New Street Research predicted that Starlink could reach 100 million subscribers by 2034. The prediction is based on the increasing number of satellites in the Starlink constellation and the technical improvements that will be introduced with the next generation of V3 satellites. For Starlink to reach that many subscribers will likely require the company to compete in urban or suburban areas with lower prices.

Satellite Update April 2026

There is so much news and activity in the satellite sector that I find myself gathering a pile of news items each month. Here are some of the highlights from April.

Amazon Entering Direct-to-Device Market. Amazon announced it has signed an agreement to buy Globalstar for $10.8 billion. Globalstar is one of the early leaders in developing technology for providing direct-to-device services to smartphones and other devices. Globalstar currently has about two dozen satellites in orbit.

Jeff Bezos Enters the Space Data Center Race. Jeff Bezos’s rocket company Blue Origin has applied to the FCC to launch a data center in space. The application asks for approval to launch 51,600 satellites that would constitute a huge AI data center. The company argues that a data center in space will complement terrestrial data centers and will give the U.S. the edge in machine learning, autonomous systems, and predictive analytics. The satellites would be placed between 300 and 1,100 miles above Earth, with most of them higher than broadband satellites. This announcement follows a proposal from SpaceX and Elon Musk to put a million data center satellites in space.

Growing Feud Between SpaceX and Amazon Leo. We’re seeing a budding regulatory rivalry between the two American broadband satellite companies. It seems that both SpaceX and Amazon Leo file comments about anything filed by its rival at the FCC. Earlier this month, SpaceX filed comments at the FCC complaining that Amazon Leo is violating the FCC’s orbital space debris mitigation plans. SpaceX claims that Amazon Leo placed several satellites 90 kilometers higher than authorized by the FCC. In a similar complaint, Amazon LEO accused SpaceX of placing satellites too low into its authorized space. Both companies have made negative comments on the other’s plans to create a satellite-based AI data center in space.

Will Starlink Honor BEAD? A group of House Democrats sent a letter to the NTIA Administrator Arielle Roth that raises concerns that SpaceX might not meet its BEAD obligations. The letter was prompted by letters sent by SpaceX to various state broadband offices that said the company doesn’t want to comply with various BEAD reporting requirements. The legislators fear that Starlink will walk away from BEAD, leaving locations with no broadband alternative (although these customers can buy satellite broadband regardless of the BEAD grants).

Failed Satellite Launch. A Blue Origin rocket failed to place a satellite for AST Space Mobile into the proper orbit, and the satellite had to be de-orbited. It was expected that insurance would be used to recover the cost of the lost satellite.

Amazon Leo to Launch Service in Mid-2026? The company said earlier this month that it is still planning to begin offering broadband service by mid-2026. That seems like an extraordinary claim since the company still had around 240 satellites in orbit as of the date of this blog. By comparison, Starlink had almost 900 satellites in service when it began beta tests with customers. At the time, the beta test customers described noticeable gaps in coverage between satellites. What’s most interesting about the announcement is that Amazon has asked the FCC for a two-year delay in meeting the full deployment obligation for its first constellation of over 3,200 satellites.

Environmental Protesters. Residents who live close to SpaceX’s Starbase launch site recently protested during a meeting centered on SpaceX’s planned IPO. The residents of the area complained about the repeated vibrations and pollution caused by regular rocket launches, along with concern about possible fires set in the arid South Texas landscape.

Denied Spectrum Sharing. The FCC recently denied requests from multiple satellite companies that wanted to share in spectrum bands already being used by other entities. As an example of the rejection, SpaceX had asked to share in the 1.5 GHz, 1.6/2.4 GHz, and 2 GHz bands. Other satellite companies had asked to share other spectrum bands. The FCC rejection said these requests were premature and that the agency needs to revise the way it allocates spectrum to accommodate direct-to-device service.

Starlink Flexing Its Market Power

In a short period of time, Starlink has taken three actions that demonstrates the company’s growing market power. The companies market power will be strengthened with the impending merger between SpaceX and Elon Musk’s AI company, xAI. Analysts have estimated the combined companies could garner a market value over $1 trillion.

The first move from Starlink came on January 15 when the company updated its user Privacy Policy. The revised terms say that, unless a customer opts out, Starlink can use user data “to train our machine learning or artificial intelligence models”, and that user data could be shared with third-party collaborators without providing more details to customers.

This should be disturbing to customers, because this doesn’t just mean sharing details of emails. In today’s broadband world, it could mean sharing video images, voice prints, and the giant amount of private information that an ISP can learn about its customers if it is looking.

Starlink’s second big move came when it sent a document to State Broadband Offices where Starlink is a tentative winner of BEAD grants. Starlink asked that LEO providers be excused from many of the BEAD obligations that will apply to other grant winners. The Starlink communication included a veiled threat that the company could pull out of BEAD if SBOs don’t meet its suggested terms.

Among the suggested changes, Starlink payments would not be linked to adding subscribers, and it would get 50% of BEAD funding up front and the rest over a specified schedule. Starlink would not have to provide financial reporting or provide any documentation about how it spends the grant funding. Starlink wants to be excused from speed test requirements since it can’t guarantee that subscribers have installed the satellite receiver properly. Starlink also wants to be excused from insurance and labor requirements.

On January 30, SpaceX asked the FCC for the ability to launch 1 million new satellites to create a giant orbital data center for AI. These satellites would be placed between 310 and 1,240 miles above Earth, in narrow 30-mile bands that would leave room to deconflict with other companies with similar goals. SpaceX says the giant satellite constellation is needed as the first step for humanity to become a Kardashev II-level civilization that fully harnesses the Sun’s power, while also providing enough AI capacity to serve billions of people. FYI, a Kardashev II-level civilization is one that fully harnesses the total energy output from its parent star. SpaceX says putting data centers in space is the most efficient way to meet the growing energy demands of AI data centers.

The constellation would use laser communications between satellites and would communicate back to Earth using Starlink’s current broadband constellation.  SpaceX says it could launch the data center satellites at a rapid pace using its new Starship launch vehicle.

Announcing these three things within a month shows a company that is feeling emboldened enough by market power to act as it wishes. If a terrestrial ISP openly said it will use customer data to train AI, it would risk being shunned in the market, but Starlink operates in many places where there are no other competitive options. I wonder how safe Starlink customers will feel about their data even if they opt out of sharing it with Starlink.

It’s going to be interesting to see how State Broadband Offices react to the Starlink demand for easier BEAD terms. Many of the SBOs didn’t want to make big awards to LEO satellite providers, and were coerced by  NTIA to do so with the Benefit of the Bargain rules. It’s not unimaginable that some States will outright reject Starlink’s request, which could lead to some interesting fights between States and NTIA.

The request to launch 1 million satellites could be a stunt to boost interest in the upcoming IPO and merger. Or it could be real. This FCC clearly favors satellite technology, but even for them, a request to launch 1 million satellites has to be an extreme request.

Broadband Shorts October 2025

These are a few topics I found interesting, but which don’t support a full blog.

NTIA BEAD Work to Continue During the Shutdown. We found out that the BEAD and other programs at NTIA were not subject to the government shutdown. NTIA is continuing work on BEAD, the Middle Mile program, the Tribal Broadband Connectivity program, the Broadband Infrastructure Program, and the Connecting Minority Communities program. Overall, NTIA was able to keep 463 of its 600 employees, largely because their work isn’t tied to annual appropriations.

My irony meter instantly went into full swing because NTIA is able to use the same funds allocated to BEAD to keep the federal side of the BEAD program open while the agency is actively working to claw back as much of that same funding as possible from State broadband grants and non-deployment funds.

Rights-of-way Not Permanent? The Georgia Supreme Court rules that local governments can withdraw contracts that granted rights-of-way, by relying on an argument that no contract can last forever, with no end date. This is bad news for telcos, cable companies, electric companies, wireless companies, and the many businesses that rely on maintaining rights-of-way to support long-term infrastructure. This might not mean much beyond the specific case that drew this ruling, but it opens up the possibility of local governments requiring periodic payments to maintain rights-of-way – something that infrastructure owners will be compelled to pay once infrastructure is using the rights-of-way.

Verizon to Buy Starry. Verizon purchased the fixed wireless company Starry, which is an interesting addition to the company’s expansion of wireless broadband. Starry has developed a unique wireless technology that it uses to bring broadband to large MDUs. Starry currently has over 100,000 customers in Boston, Denver, Los Angeles, New York/New Jersey, and Washington, D.C./Virginia.

Starry uses millimeter wave spectrum to reach customers. This fits in well with Verizon’s portfolio of millimeter wave spectrum that it had hoped to use for 5G. That use quickly died when it showed that the spectrum fizzled at street level when connecting to cellphones. Remember all of the Verizon commercials with a cellphone showing gigabit speeds?

FCC to Fast-Track Satellite Expansion. FCC Chairman Brendan Carr announced a push to fast-track satellite applications for expansions or changes to constellations. The process currently requires years of study by the FCC to consider any request from a satellite company. Carr described his planned changes as moving from a ‘Default to No’ process to a ‘Default to Yes’ framework”. He ways this will make the assumption that satellite technologies are in the public interest and should be treated in the same way that the FCC treats other technologies. This might be viewed as a pro-Starlink change, but there are dozens of companies asking for permission to launch satellites.

SpaceX has Chinese Investors. During a lawsuit, it was discovered that SpaceX has Chinese investors, a fact that has never been made public. This instantly raised a lot of questions since SpaceX is becoming increasingly important as a U.S. military contractor.

The extent of the Chinese investments, and the type of Chinese investor, was not disclosed, but it seems certain that this is going to be investigated. SpaceX has always kept its full ownership private, and that will likely have to change if it to wants to keep the role of defense contractor.

Starlink in the News

There is a lot of speculation that Starlink is positioned to get a lot more federal subsidy from the BEAD grant program. There are a few things that have to happen for that to come to pass, but that is not the only news about Starlink these days.

Starlink announced in September that it reached four million customers worldwide. What is most impressive about that announcement is the rate of growth, with the company just hitting the three million customer mark in May of 2024. The company served two million customers at the end of 2022, so the rate of growth is on a steep upward curve. The company currently has over 6,700 working satellites, up from 5,400 at the end of 2023. The company still plans to grow the first-generation constellation to 12,000 satellites. This growth puts the company on track to hit $6.6 billion in revenue for the year, which means the company will be able to internally fund its continued efforts to improve its reusable rockets.

At the end of November, the FCC’s Space Bureau granted the SpaceX application to construct, deploy, and operate a constellation of the next generation of satellites, which the company is calling its Gen2 Starlink constellation. The FCC authorized SpaceX to operate the Gen2 satellites at altitudes of 340, 345, 350, and 360 kilometers. The FCC also gave permission to connect to the new satellites using Ku-, Ka-, E-, and V-band frequencies. Starlink says it still hopes to eventually reach 29,988 Gen2 satellites, up from the 7,500 approved by the FCC so far.

In the application that requested the changes, Starlink said that “small-but-meaningful updates” can boost broadband speeds to 1 Gbps. Starlink’s website says that current actual speeds vary between 25 Mbps and 220 Mbps, with a majority of users experiencing speeds over 100 Mbps. Current upload speeds are typically between 5 and 20 Mbps. Current latency ranges between 25 and 60 milliseconds, with 100+ milliseconds in a few remote locations.

The company says the faster speeds would come from several changes. The company plans to use larger Starlink satellites, which are so big that only Starship can launch them. SpaceX has also requested to lower the altitudes of existing satellites, requesting to lower satellites at 525, 530, 535 kilometers to 475, 480, and 485 kilometers, respectively.” Another request to the FCC would change the elevation angles for satellites operating between 400 and 500 kilometers from 25 degrees to 20. This would increase the connection times to earth stations.

Finally, the FCC approved the request by SpaceX and T-Mobile to offer supplemental mobile coverage from space. The FCC ruling said this “will put an end to mobile dead zones.” For now, the approval extends to basic connection for texts or emergency communications using slices of T-Mobile’s spectrum in areas the mobile carrier’s terrestrial network can’t reach.

There is no guarantee that the FCC will approve everything Starlink is asking for. Companies like AT&T and Verizon have said that some of Starlink’s requests for frequency would interfere with and degrade service from terrestrial mobile networks.

One bit of negative news is that Starlink has reintroduced a wait list in some markets. Is this something that will be relieved as more satellites are launched, or will the rapid customer growth outstrip network capacity. This is the same kind of issue that every ISP that grows quickly faces.

Elon Musk’s close ties to the administration bodes well for the company to get much of its wish list. The company had a very good 2024, and the future looks even brighter.

Satellites Directly to Cellphones

AT&T and satellite company AST SpaceMobile announced a partnership to provide satellite cellular service directly from satellites to cellphones. This will provide a service that is much needed for the billions of remote users who are not in the range of a cell tower.

This is an emerging industry that is still being referred to be different acronyms. Direct-to-Device, or D2D seems to be emerging as a popular term. The FCC has been calling this Supplemental Coverage from Space (SCS). Others have been referring to this as Direct-to-Cell Phone.

AST offers a unique satellite technology that is far different than what can is used for broadband satellites like the ones being deployed by Starlink. The AST satellites have a large surface area which provides the ability to shape the signal to reach cellphones and to receive the signal back directly from a phone.

The company claims that the large satellites will be able to process up to one million simultaneous calls. The satellites will also be able to provide some broadband capability. AST is also using both low- and mid-band frequencies to increase connectivity options to and from users. Backhaul will likely be accomplished through links to AT&T ground stations.

The first AST launch will include five satellites in July or August that will be operational in about three months after launch. The satellites will be circling the globe at a high speed, and initial customers will only be able to make calls when the satellites are overhead. The company needs at least 45 satellites to provide constant connectivity, and over time, will likely keep adding satellites to improve overall capacity.

There are a lot of other players interested in pursuing the lucrative market that could include as many as 5 billion customers worldwide for folks who live, work, or travel to remove places. Here in the U.S., there are still huge parts of rural America with terrible cellular coverage.

  • Apple started the race by providing links directly from satellites to devices in 2022 when it announced that the iPhone 14 had the capability of connecting to Globalstar satellites for emergency text messages. Apple has invested more than $450 million to help Globalstar upgrade its ground stations.
  • Later in 2022, SpaceX announced a partnership with T-Mobile to also allow emergency texting. SpaceX had previously acquired Swarm in 2021 to try to develop the technology.
  • In early 2023, Qualcomm announced that its Snapdragon chip could connect directly to the Iridium satellite network to relay emergency text messages.
  • Lynk Global is working on constructing a fleet of satellites. The company has three test satellites in orbit. Lynk is collaborating with over 40 worldwide cellular carriers.
  • MediaTek has developed a satellite-compatible chipset that can connect to a Bullitt platform to use high-orbit GEO satellites from Inmarsat and Echostar.
  • Huawei and China Telecom have developed emergency calling and are working to deploy a LEO satellite constellation.
  • Deloitte predicted at the end of last year that 200 million smartphones will be sold in 2024 that contain the capability of connecting directly to a satellite.

There is a lot of demand for seamless cellular connectivity. People who travel around the world get frustrated by cellphones that only work in some countries. People who work daily in rural areas are frustrated as they move in and out of cell coverage. The ability to provide cellphone broadband could bring Internet connectivity to billions of people who are still not able to connect to an ISP. This service could also provide connectivity to remote sensors and other devices located out of reach of terrestrial networks.

This is going to be an interesting market, and it’s likely to be a huge one. It’s not unexpected to see AT&T jump into the fray to chase a huge new revenue stream.

Who’s Chasing RDOF Grants?

There is a veritable Who’s Who of big companies that have registered for the upcoming RDOF auction. All of the hundreds of small potential bidders to the auction have to be a bit nervous seeing the list of companies they could end up bidding against.

As a reminder, RDOF stands for Rural Digital Opportunity Fund and is an auction that starts in October that will award up to $16.4 billion in broadband funding. The money will be awarded by reverse auction in a process that favors faster technologies, but also favors those willing to take the lowest amount of grant per customer. The areas that are eligible for the funding are among the most remote places in the country, which is why the list of potential large bidders is puzzling.

There are some big cable companies on the list: Altice, Charter Communications, Cox Communications, Atlantic Broadband, Midco, and Mediacom Communications. These companies serve many of the county seats or other nearby towns to many of the RDOF areas. One has to wonder what these companies have in mind. The only one that has chased any significant federal grants in the past is Midco in Minnesota and North Dakota. Midco has been using grant money to extend fiber backhaul to connect its smallest markets, to build last-mile broadband in some tiny towns, and to build fixed wireless in rural areas surrounding its cable markets.

One has to wonder if the other cable companies have a similar plan. It’s incredibly inefficient to build traditional hybrid coaxial-fiber networks in rural areas, so it’s unlikely that the cable companies will be extending their existing networks. The RDOF auction is being done by Census blocks, which in rural areas can cover a large area. The winner of the auction for a given Census block must offer service to everybody in that block. I also have a hard time envisioning all of these big cable companies getting into the wireless business like Midco is doing, so their presence in the auction is a bit of a mystery.

Then there are the traditional large telcos including Frontier, Windstream, Consolidated Communications, and CenturyLink. These companies already serve many of the areas that are covered by the reverse auction. These are the rural areas where these companies have largely neglected the old copper wiring and either offer no broadband or dreadfully slow DSL. The minimum technology allowed to enter the auction must deliver 25/3 Mbps broadband. It’s almost painful to think that these companies would chase the funding and promise to upgrade DSL to 25/3 Mbps after these companies largely botched an upgrade to 10/1 Mbps DSL in the just-ending CAF II grants. The cynic in me says they are willing to pretend to upgrade DSL all over again if that means substantial grant money. I have to think that some of these companies are considering deploying fixed wireless. To the extent any of these companies is willing to take on new debt or use equity, they could also build fiber. None of these companies has built a substantial amount of fiber to truly rural places, but may these grants are the inducement they were waiting for.

Verizon and U.S. Cellular have registered for the auction. You have to think the cellular carriers will be deploying fixed cellular broadband like the 4G FWA product that Verizon just announced recently. These companies already have equipment on towers in many of the RDOF grant areas and would love to grab a subsidy to roll out a product they might be selling in these areas anyway.

Then there are the satellite companies SpaceX, Hughes Network Systems, and Viasat. Viasat has won federal grant money before for selling broadband from its high-altitude satellites. SpaceX is the wildcard since nobody knows anything about the pricing or real speeds they can provide. We know that Elon Musk has been lobbying the FCC to let him have a shot at the billions up for grabs in this auction.

There is another interesting wildcard with Starry. Their business plan is currently selling fixed wireless to large apartment buildings in center cities and they’ve developed a proprietary technology that’s perfect for that application. They must have something else in mind in chasing grant money in remote areas that are 180 degrees different than their normal business model. Starry founder Chet Kanojia is incredibly creative, so he probably has a new technology in mind if he wins auction funding.

There may be other big players in the auction as well since many of the registered bidders are participating under partnerships or corporations that are disguising their identity for now. I think one thing is clear and some of the rural ISPs and cooperative who think nobody else is interested in their markets will get a surprise early in the auction. These big companies didn’t register for the grant auction to sit on the sidelines.