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SpaceX and Amazon Hope to Deliver Cheap Broadband With Low-Orbit Satellites

A new study shows how more broadband options should bring lower prices, assuming the promises pan out.

by Karl Bode
May 10 2019, 3:46pm

Traditional satellite is often seen as the last resort for those lacking better broadband options. Image: Patrick T. Fallon/Bloomberg via Getty Images

If you hadn't noticed by now, broadband competition is severely lacking in the United States, resulting in high prices, slow speeds, spotty availability, and terrible customer service. A new crop of low-altitude satellite broadband services from the likes of Amazon and SpaceX promise to change that equation, but not everybody's sold on the idea.

Traditional satellite broadband is historically terrible, and is usually seen as the last resort for those lacking better broadband options. High latency, daily usage limits, and high prices generally make satellite a sad substitute for fiber or cable.

But a new crop of lower-altitude satellite services promise to be a game changer.

Elon Musk's SpaceX, for example, says it will launch thousands of lower-orbit satellites under the brand name Starlink that it claims will provide faster connectivity. Commercial service availability isn't expected until 2021 or so, but the first demonstration satellites are expected to launch next week.


Starlink is promising speeds as fast as 1 Gbps at latency as low as 25ms thanks to the lower orbit, making the service potentially appealing to a broader audience such as gamers (traditional satellite offers "pings" as high as 500ms).

Several others have recently thrown their hat into the low-orbit satellite broadband arena. Government filings have indicated Amazon is preparing a constellation of 3,236 satellites as the backbone of its own planned service currently dubbed "Project Kuiper." Another outfit named Oneweb is designing a similar network of smaller, low-orbit satellites.

Many of these offerings will take years to materialize, if they even result in a commercial product at all. But should they take off, the benefits to consumers could be significant.

A new study by the broadband service availability tracking firm BroadbandNow claims that US consumers could save upwards of $30 billion annually thanks to the added competition these services could bring to market. The study is quick to highlight how the availability of more than one broadband provider quickly reduces consumer costs.

"The average 'lowest available monthly price' for the estimated 104 million Americans with only one wired broadband provider is $68," the study found. "For the 75 million Americans with two choices, that average lowest price drops to $59. For the lucky 15 million Americans with five or more choices, it's $47."

While added competition of any flavor is welcome, the telecom market has been historically filled with similarly well-hyped, low-orbit satellite ventures that didn't really materialize. Telecom history is peppered with promises from companies such as Globalstar, Iridium, Teledesic, and ORBCOMM that under-delivered or delivered nothing at all.

Read More: No One Trusts Big Telecom to Build a Better Broadband Access Map

BroadbandNow's Tyler Cooper told Motherboard in an email that this time could be different given the deeper pockets behind many of the initiatives.

"If there is a difference between past initiatives and the ones we're talking about today, it's that we now have what appears to be a concerted effort on behalf of some powerful industry players to bring consumer-focused arrays to market," Cooper said. "To my knowledge, no other significant project has been developed as robustly as Starlink, and Amazon/Oneweb seem equally committed to making this concept a reality, more so than many of the 'exploratory,' specialized services of years past."

While these technologies have promise, FCC Commissioner Jessica Rosenworcel has expressed concern that the rush to litter orbit with thousands of new, smaller satellites (without having adequate rules in place first) could cause a surge in "space junk," something NASA says is already a problem, especially in lower orbits.

Meanwhile, consumer advocates warn that satellite broadband will never surpass the capabilities of fiber-optic networks, which still aren't available across most of America despite millions in subsidies bankrolled by American taxpayers.

"There is nothing that has been unveiled so far in the market that is superior to fiber to the home yet in terms of capacity and potential," Ernesto Falcon, lawyer for the Electronic Frontier Foundation, told Motherboard via email. "Cable rolling out gigabit networks and eventually upgrading to 10 gigabit networks means the only real infrastructure left that will surpass cable is fiber to the home," he added.

It's far too early to know how much these new services will actually cost. It's also unclear what restrictions will be placed on these connections in the wake of the repeal of net neutrality. Much like wireless networks, the new options could come saddled with all manners of usage limits and caveats that hamper their usefulness.

That said, new satellite services could still provide some interesting alternatives to underserved portions of the globe. But as a general rule of thumb, when it comes to telecom industry promises, your best bet is to wait until an actual product is available before buying into the hype.