The FCC’s high-profile bet on Elon Musk

The FCC’s high-profile bet on Elon Musk

2021-05-17 16:30:00
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Derrin Carelli & # 39; s Reddit post couldn't be a better ad for Starlink, the satellite internet service offered by Elon Musk's SpaceX.

In a short video, Carelli shows the breathtaking view from his cabin, nearly 3,500 feet high in the Colorado Rockies. The camera swings to a small satellite dish perched on the edge of a cliff, then Carelli walks into his cabin, tapping his iPad. A YouTube video of Joe Rogan interviewing Musk pops up and loads immediately. Fast, low-latency internet in the middle of nowhere. Carelli puts his thumb up.

Carelli & # 39; s cabin is really off-the-grid – he told Recode that cell service (and the nearest supermarket) is 30 miles away and the nearest land line is five. There are no power lines, no water pipes, no sewer connections and no roads. Carelli has to walk about a mile to reach his cabin, which he calls Wolf Lodge. He wanted that isolation, but he also wanted to be able to communicate with the outside world in an emergency.

But like millions of Americans living in remote areas, he didn't have many options. There was no terrestrial broadband. Not 5G. Satellite internet was overpriced and slow. That is a problem that the government has been trying to solve for decades; the Federal Communications Commission (FCC) has made it one of his mandates. And the agency has awarded a lot of money to SpaceX to help close the digital divide with its new Starlink Internet service, which is slowly rolling out to a small group of beta testers.

When Carelli heard about the so-called "better than nothingBeta program, he says he "became obsessed with everything Starlink," even looking out for his satellites in the night sky and "giggling like a little kid as they passed" while waiting for his chance to become a beta tester. In February, he got his satellite dish: Dishy. (Yes, the company has given it a cute name. Dishy's full name is Dishy McFlatface.) And it's safe to say that Carelli certainly thinks Starlink better is nothing then.

“The feeling I got from connecting Dishy and receiving the Internet in my cabin is similar to what it must have been like for cavemen to discover fire,” said Carelli. “ A sense of 'Wow, civilization is moving forward!' & # 39; & # 39;

Carelli is one of more than 10,000 Starlink beta testers worldwide. Another 500,000 people signed up and paid their $ 99 down payment to get the service when it is available in their area, according to the company. Musk tweeted that he expects to have "several million" users in both urban and rural areas – although he also recognized that serving them all will be a "challenge". The Starlink subreddit where Carelli posted his video is full of stories similar to his: people whose remote location previously made it difficult or impossible to get enough broadband internet, and who are very happy with the service they now have. from Starlink. They are posting photos and videos of unboxing and setting up their new Dishys, screenshots from internet speed tests and, in one case, a poem dedicated to their "crappy rural DSL provider" that they were finally able to leave behind now that they had Starlink.

But not everyone is thrilled with Starlink or SpaceX, which failed to respond to numerous requests for comment. Some reviews complain that the service is unreliable and can be slow. Astronomers are concerned that the thousands of satellites planning to deploy Starlink and similar services will obscure their view of the sky; others are concerned that the satellites will contribute to space that is already to pressure, and increases the risk of collisions. Rivals have accused SpaceX of over-promising Starlink's capabilities to get nearly $ 1 billion in government grants from the FCC, money that was part of a program that was also controversial.

It remains to be seen if Starlink can live up to its potential. But it certainly has a lot of potential.

Why We Need Better Satellite Internet

We've had satellite internet for decades, as my colleague Adam Clark Estes explained last fall. Traditional satellite Internet, provided by companies like Viasat and HughesNet, places a pair of high-Earth orbiting satellites – about 35,000 kilometers up – orbiting the Earth at the same speed as the planet is spinning. This is called a geosynchronous or GEO orbit. At that height, few can cover most of the Earth's surface, and that's what many people in America who don't have a terrestrial internet have to rely on to connect.

But GEO satellite internet has a reputation for being slow and expensive, and it wasn't designed for data-heavy real-time applications where low latency is critical. The distance that signals travel from Earth to satellite and back causes a significant delay for things like Zoom meetings, video games, and streaming videos. Many of the things people use the Internet for today – things essential to school, work, and even healthcare – are difficult or impossible to do. And that puts those people at a clear disadvantage compared to those who do have high-speed, low-latency internet. The pandemic made that disadvantage clear.

Starlink is different. SpaceX will put thousands of small satellites into low Earth orbit, or LEO. Most are about 350 miles higher. Here they form an interconnected constellation around the planet. Because it is closer to the users, data has less distance to travel and lag is significantly reduced. And it's fast too: SpaceX says it can provide 100 megabits per second download speeds and 20 Mbps uploads to users and plans to increase that to 1 gigabit per second or even 10 Gbps. Compare that to HughesNet, which offers only 25 down and 3 up – the FCC's bare minimum standard for broadband – and Viasat, which offers download speeds of up to 100 Mbps for the most expensive plan, but only 3 Mbps up.

SpaceX isn't the only company trying this. Among its competitors are those of Amazon Project Kuiper and OneWeb, which recently emerged from bankruptcy. But Starlink is currently the only LEO satellite broadband service operating and beaming the Internet to residential customers – a proof of concept that is actively being added. There are now about 1,500 Starlink satellites there, and there are plans for a whopping constellation 42,000 of them (SpaceX is planning a series in the near future 4,408 satellites).

The LEO constellation concept is not new, but we are now seeing multiple efforts as it has become cheaper to produce satellites and put them into orbit, technology has advanced and the demand – basically the need – for better satellite internet and Universal connectivity has never been higher, Jeff Loucks, executive director of the Deloitte & # 39; s Center for Technology, Media, & Telecommunications, told Recode.

For SpaceX, which owns and operates the rockets that send its Starlink satellites into space – and has made them partially reusable – it's even cheaper to get into orbit. Starlink could be a nice little source of income for SpaceX. Or it could be a huge drain on the company's finances.

How Starlink became one of the FCC's nationwide Internet solutions

A government agency has already decided that Starlink has enough promise to give the money, so some of your money will go with this. SpaceX was one of the biggest beneficiaries of the FCC's recent $ 9.4 billion Rural Digital Opportunity Fund (RDOF) auction, winning nearly $ 900 million to provide a low-latency Internet service with "above baseline" speed (defined as 100 Mbps download and 20 upload) to approximately 640,000 locations in 35 states.

It was a surprisingly large amount of money awarded to a company that had a major breakthrough in the last minute, when the FCC decided it was eligible for the low latency level. That gave SpaceX a huge advantage over the traditional satellite internet companies (Viasat got nothing; HughesNet only got $ 1.3 million) and even some terrestrial providers who needed more money to build connections to those locations.

But that price was also decided when the FCC was chaired by Trump-appointed Ajit Pai, whose tenure has been marked by a pro-free market, anti-regulation approach that fits well with how Musk does business.

"Pai decided to do everything about this," Harold Feld, senior vice president at open internet advocacy group Public Knowledge, told Recode. "If you don't really want to do anything about regulating the existing incumbents, you're betting on new technologies."

The FCC is now headed by Acting Chairman Jessica Rosenworcel, who previously criticized the RDOF auction and said the maps used to determine which areas needed a high-speed broadband Internet connection were not accurate.

“We spend billions of dollars without the facts we need,” Rosenworcel wrote in partially dissenting opinion in February 2020. "We did nothing to fix our dubious broadband data or address our inaccurate broadband maps."

As some have done pointed out, the FCC allocated funds to companies to cover areas that do not appear to require an Internet service or that already have adequate access to it. To give just one example, I was surprised to find that the FCC found one of the malls in my hometown eligible for RDOF grants (although not the surrounding houses or the hospital), as well as a small portion of my other mall in my hometown, most of which are parking lot. SpaceX was the winning bidder for both and awarded several thousand dollars in grants. Nor is it in an area that anyone would consider rural or remote.

These concerns are also echoed by some legislators. Shortly before Pai stepped down from the FCC when President Biden took office, a bicameral, two-member group sent him a letter to request that the RDOF winners be thoroughly vetted in a transparent process before any withdrawals are made – which the FCC told Recode it plans to do.

"FCC personnel carefully review lengthy requests for the technical, financial and operational capabilities to ensure that the winning bidders can meet their commitments," spokesman Will Wiquist told Recode. "This assessment will be completed before any support is disbursed."

But the committee did not respond to follow-up questions about re-examining the locations it believes are eligible to receive grants (particularly the malls in my hometown and their parking lots), or about when the funds will be paid out.

There are also concerns that areas allocated to SpaceX will now not receive any investment in terrestrial Internet, as the subsidy that those providers say they need to make such connections cost-effective is not there. That's fine if the location is so remote that no terrestrial internet company would ever spend the money to connect it anyway. It might not be nice if it means that your home now relies on Starlink to get out of beta mode, work properly and be affordable, while a grant from a terrestrial provider would have tied you up much sooner.

"I don't think a billion dollars is necessarily a bad bet," said Feld. “But at the same time, we need to push for a much larger investment in rural infrastructure. … We need to provide much more support for having fiber optic (internet) in the home, even in rural areas. "

He added, "I'm glad they are doing it. I support it. What I'm worried about is people think this means we solved the problem when we really didn't, and we don't know. agree if this is going to be as good as it says. "

In Starlink's favor, the Biden-era FCC may have said closing the digital divide is a priority, with President Biden allocating $ 100 billion to connect all Americans to affordable super-fast internet in his $ 2 infrastructure plan trillion. LEO internet could help with this, especially for the remote places where terrestrial broadband just isn't a reality.

"The Internet Society would prefer to see funding made available to new service providers, including community and municipal networks," Mark Buell, the Internet Society's regional VP for North America, told Recode. "For communities where fiber may not be possible, LEO satellites can work with community-driven solutions."

If Starlink is ultimately unable to live up to the promises it has made to the FCC, it wouldn't be the first time a government program has brought the Internet to under- and unmanned areas – or one of the companies it gave money – was short. The government has been trying to connect the country for years through various initiatives and policies. That is clearly not the case. RDOF's predecessor, the Connect America Fund, saw at least two established terrestrial ISPs getting hundreds of millions of dollars, Frontier and CenturyLink, repeatedly fail to meet deadlines. Despite this, both companies got hundreds of millions of dollars more at the RDOF auction.

Can Starlink scale up? Do we want it at all?

But there are already concerns about whether SpaceX and Starlink can deliver on all of their promises once the service finally gets out of limited beta mode.

Competitors have been vocal over perceived flaws in the company and its technology, with a number of them – including Viasat, Amazon, DISH Network, HughesNet and OneWeb – protesting SpaceX's recent request to the FCC to modify its license so that its satellites can be can operate lower job. Their concerns were then largely dismissed or not addressed by the FCC decided in April to grant SpaceX's request by saying that it is & # 39; in the public interest & # 39; and that the change would "improve the experience for users of the SpaceX service, including in often disadvantaged polar regions".

As Viasat pointed out in the documents provided to the FCC and reviewed by Recode, Starlink is not consistently meeting its 100/20 target, according to some speed tests, and Viasat's research indicates that Starlink will not be able to overcome various legal, technical and economic hurdles.

“I've been in the industry for 33 years and I've seen many systems come and go,” said John Janka, Viasat's head of global government affairs. "And I would say it's not the first time I've heard these pie-in-the-sky promises. … Everyone got excited. And then they couldn't deliver."

While it's easy enough to dismiss Viasat's complaints as those of a jealous rival – like Musk virtually has Starlink's competition isn't the only one making them. Nilay Patel of The Verge, who was part of the beta tester program, said in one recent review that Starlink "was unreliable, inconsistent and foiled by even the closest suggestion of trees". Sometimes, Patel said, it worked as promised. But often that did not happen. And while this is a beta test, Starlink already has about a third of its originally planned network of satellites in the sky, serving just a fraction of the number of customers SpaceX promised the FCC. It seems the company still has a lot of work to do.

Astronomers have also expressed concern that the number of satellites and their proximity to Earth required for constellations such as Starlink will make the night sky too bright or obstruct their view. We could literally look at tens of thousands of satellites in low Earth orbit if SpaceX, OneWeb and Amazon's Project Kuiper get their way, or hundreds of thousands of other companies get involved. And this greatly increases the number space debris and the potential for collision, especially if those satellites malfunction and cannot implement their collision avoidance systems. The SpaceX and OneWeb satellites have already had a near miss (though, according to SpaceX, OneWeb exaggerated the threat).

"There is something called the Kessler effect, which is essentially a chain reaction that renders space useless because it is filled with debris," Gabriel Rebeiz, an associate at the Institute of Electrical and Electronics Engineers (IEEE), told me. Recode, and that "at this point it is not yet clear" what the effect will be of so many more satellites in that orbit.

Meanwhile, LEO is getting busier. SpaceX's most recent launch, on May 15, added 52 more satellites. It came just a week after the launch of 60 satellites on May 9.

Even if Starlink can provide access, affordability can remain an issue – for the customers as well as SpaceX. Beta testers pay $ 499 for a Dishy and $ 99 a month for unlimited data. That's cheaper than other satellite Internet services (depending on how much data you're using), but it's still not cheap. There is also no guarantee that Starlink's prices will not increase from there. The sheer number of satellites required by LEO internet and their relatively short lifespan means that SpaceX will constantly replace its satellites to keep its constellation going. The discount it gets from using its own rockets may not cover the cost of constantly launching them.

"These are quite sophisticated devices, and they are relatively new," said Loucks of Deloitte. "It remains to be seen how robust and reliable they will be."

Meanwhile, SpaceX is already losing money to Dishys. SpaceX President Gwynne Shotwell said in April that they cost the company $ 1,500 each to earn, even though it charges the consumer $ 499. In other words, SpaceX loses $ 1,000 on every Dishy. If and when Starlink scales up to the millions of customers SpaceX hopes to have around the world, those costs could drop and the company will find its way to financial viability. But, as with many things Starlink, it's still an open question – some research from last year says the constellation of that Starlink simply will not have the capacity to serve even 500,000 customers with 100 Mbps high-speed Internet at the same time, let alone several millions.

Musk also tweeted that Starlink was not yet financially viable and that he could only "hope" it could do what previous attempts at LEO satellite internet could not: not go out of business.

Points for honesty, but it's not exactly a vote of confidence.

In the meantime, other LEO and GEO satellite internet companies are trying to catch up, either by setting up their own constellations or improving their existing services with new generations of higher capacity satellites.

As for Carelli, his enthusiasm hasn't waned three months after starting his beta test. He hopes to use that service to stream a sunset from Wolf Lodge on his live stream Youtube Channel. But he is not stopped by the Internet service, but by YouTube's rules: he does not yet have the minimum of 1000 subscribers to live stream. In the meantime, he says he is "really satisfied" with Starlink's service.

"The greatest pioneer alive today and the person who works most to help our species become a multi-planetary species is Elon Musk," said Carelli. "When it comes to the price of Starlink, I am happy to pay three times what it currently costs."

It remains to be seen exactly what those costs will be.


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