Elon Musk Makes It Clear Starlink Won't Have The Capacity To Disrupt U.S. Broadband
from the baby-steps dept
SpaceX says the company has received more than 500,000 pre-orders for the company’s growing low-orbit satellite broadband service. The company opened up pre-orders back in February, and says it currently has about 10,000 users around the world participating in the beta. Starlink, which (for now) costs about $100 per month (plus a $500 first month equipment charge), should provide a welcome new option for many folks currently stuck without any broadband whatsoever.
But for those who continue to think Starlink is going to truly disrupt the broken U.S. broadband market, here’s a few quick numbers. Up to 42 million Americans lack access to any broadband whatsoever, be it wired or wireless. Another 83 million currently live under a broadband monopoly, usually Comcast. Tens of millions more live under a broadband duopoly, which usually consists of Comcast and some regional phone company that stopped caring about upgrading its DSL networks sometime around 2005 or so. This regional monopolization directly results in spotty, expensive, sometimes sluggish service.
In contrast, SpaceX and Musk say that the 500,000 users will probably get the service they’ve pre-ordered. But Musk noted last week that as the company begins to push into the several million connection territory, things will likely get tricky. Particularly in more dense areas where capacity constraints will continue to be a big problem, much like existing higher-orbit satellite offerings:
Only limitation is high density of users in urban areas. Most likely, all of the initial 500k will receive service. More of a challenge when we get into the several million user range.
— Elon Musk (@elonmusk) May 4, 2021
Wall Street analysts recently predicted that even with Starlink’s projected max deployment of about 12,000 low-orbit satellites, it’s still only going to serve somewhere between 300,000 to 800,000 households, or less than 1% of the US market. And while over time analysts estimated that it could scale to about 6 million subscribers, that’s still a fairly small dent in a very large US broadband problem. And at $600 for the first month of service, it’s still out of range for many for whom broadband affordability is the real impediment to reliable access.
It’s also still not entirely clear what kind of network limitations we’ll see on a fully-loaded commercial Starlink network in the post net neutrality era. The company initially won’t want to impose too many draconian limits (like caps, overage fees, or heavy-handed throttling) in order to lure in new subscribers. But as the network gets congested and runs into the unnegotiable limitations of physics, it seems inevitable we’ll see more and more restrictions of this type, once again making it clear that wireless and satellite offerings are still no substitute for future-proof technologies like fiber.
Again, if you can afford the $600 first month payment, can actually secure a pre-order, and have no other options, it’s very likely that Starlink will be a godsend regardless of where on the planet you live. It will also probably be helpful for those interested in getting portable access when camping, driving around in an RV, or in the middle of the ocean. But even the normally hype-prone Musk is making it abundantly clear that those expecting a major U.S. broadband market disruption shouldn’t hold their breath.