Amazon, Space X Throw Hissy Fits As They Bicker Over Government Contracts, Subsidies

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from the nobody-wins dept

We’ve noted a few times that the Space X, Starlink satellite broadband service isn’t going to be quite as disruptive to telecom as many people might think.

For one, capacity constraints mean that the company will only be able to serve somewhere between 500,000 and 800,000 subscribers in the first few years. That’s a drop in the bucket when you consider 42 million Americans don’t have broadband, and 83 million live under a monopoly (usually Comcast). Once Musk fanboys flock to limited subscriber slots to outfit their boats and RVs, there likely may not be many left for those that genuinely need access. And at $100 per month (plus a $500 equipment cost) the service doesn’t really help with the primary reason for low broadband adoption: high costs.

Starlink, like a lot of what Musk does, is really about other things. One, to help drive up company value via press excitement (like that recent dancing robot vaporware). Two, to help subsidize Space X’s other space ventures (Starlink recently courted controversy for nabbing nearly $900 million in FCC funds to serve a few parking lots and traffic medians). Other companies have the same idea as they try to hoover up government subsidies and nab lucrative contracts, which is why we’ve been seeing a significant boost in hissy fits between companies like Space X, Amazon, and ViaSat.

ViaSat has been trying to derail Space X by (accurately if not self-servingly) pointing out the company’s low-orbit satellites may pose environmental and light pollution threats. Amazon has also been ramping up its verbal assault on Space X and Starlink, claiming the company’s plan to launch updated low-orbit satellites violates FCC rules. In filings this week with the FCC, Amazon lamented the fact that when it comes to Starlink and Space X, rules often just don’t apply:

“Whether it is launching satellites with unlicensed antennas, launching rockets without approval, building an unapproved launch tower, or re-opening a factory in violation of a shelter-in-place order, the conduct of SpaceX and other Musk-led companies makes their view plain: rules are for other people, and those who insist upon or even simply request compliance are deserving of derision and ad hominem attacks.

While Amazon, like ViaSat, is absolutely engaged in self-serving behavior here (it doesn’t want competition, wants government subsidies and contracts for itself, isn’t much of a fan of regulatory authority, etc.), that doesn’t mean it’s not true. The Trump administration for example twisted itself into pretzels to throw hundreds of millions of dollars in subsidies at Starlink for broadband coverage promises that made no coherent sense. But when it comes to the light pollution both Starlink and soon Amazon are creating (something researchers say can’t be fully mitigated), U.S. regulators are just completely asleep at the wheel.

Amazon’s specific complaints in their latest filings focus on claims that Space X is violating FCC rules governing inconsistent and incomplete applications, and has redesigned several antenna arrays “clandestinely.” The company then whined to the FCC that when you point out the company’s tendency to play fast and loose with government rules, Space X acts like a brat:

“Try to hold a Musk-led company to flight rules? You?re ?fundamentally broken.? Try to hold a Musk-led company to health and safety rules? You?re ?unelected & ignorant.” Try to hold a Musk-led company to U.S. securities laws? You?ll be called many names, some too crude to repeat. In the words of the Wall Street Journal, Elon Musk wages a ?War on Regulators,? the public servants charged with uniformly applying the same rules to all. As the Journal reported, ?Federal agencies say [Musk is] breaking the rules and endangering people . . . . Rather than engaging in a give-and-take with government authorities, Mr. Musk?s default response includes making public, sometimes crude, remarks via Twitter disparaging them.”

Of course Amazon’s sudden concern about regulatory authority is highly performative as a company that routinely enjoys tap dancing around regulatory obligations and rules when it suits it (like say its union busting). But again, that doesn’t mean it’s wrong that Space X is also terrible in this particular arena. Because Space X doesn’t deem it necessary to have a functioning PR department, the best you get in response to Amazon’s allegations is often just… more Musk tweeting:

Starlink is currently in beta and will likely launch next year. Amazon’s comparable low-orbit satellite broadband service isn’t expected to go live until 2023. While both services will provide users with an additional option for broadband access, limited capacity and physics means it will be some time before either has the impact their billionaire owners promised, assuming both projects can remain financially viable that long (the low-orbit satellite market is a historical highway of failures). Honestly, at least in terms of broadband access, it remains utterly uncertain if any of this endless drama is going to actually be worth it.

Filed Under: competition, elon musk, fcc, jeff bezos, low earth orbit, satellite broadband, spectrum, starlink
Companies: amazon, spacex, starlink, viasat