Space X Engine Production Woes Could Screw Up Musk's Starlink Broadband Play

from the trouble-looming dept

We’d already noted how Elon Musk’s Starlink isn’t going to be the broadband disruption play many people had imagined. The service lacks the capacity to really provide broadband to more than 500,000 to 800,000 users during its first few years in operation (for context, somewhere between 20 and 40 million Americans lack access to broadband, and another 83 million live under a broadband monopoly). With a $100 monthly cost and a $500 first month equipment fee, it’s also not doing any favors for the millions of Americans who lack access to affordable broadband.

Eventually, with a fully upgraded fleet of 42,000 low orbit satellites years from now, Wall Street analysts estimate Starlink could potentially reach upwards of 6 million users. But again that’s an optimistic high end guess, and it requires that everything go swimmingly the next few years.

Everything is not going swimmingly. Chip shortages initially delayed Starlink’s exit out of beta. And now a new leaked email suggests that Musk is warning about a potential bankruptcy for Space X if the company can’t sort out production of the company’s Raptor engine:

“Unfortunately, the Raptor production crisis is much worse than it had seemed a few weeks ago. As we have dug into the issues following the exiting of prior senior management, they have unfortunately turned out to be far more severe than was reported. There is no way to sugarcoat this…What it comes down to, is that we face a genuine risk of bankruptcy if we can?t achieve a Starship flight rate of at least once every two weeks next year.

Will Heltsley, former SpaceX senior vice president of propulsion, recently left Space X due to a lack of progress on the project. In the email, Musk makes it clear that if things don’t improve, Starlink could also be in deep trouble:

“The consequences for SpaceX if we can not get enough reliable Raptors made is that we then can?t fly Starship, which means we then can?t fly Starlink Satellite V2 (Falcon has neither the volume nor the mass to orbit needed for satellite V2). Satellite V1, by itself, is financially weak, while V2 is strong.”

One problem, of course, is that Starlink is poised to receive millions in FCC subsidies to bolster a service that may not be financially viable several years from now. The Trump FCC already faced a scandal after it announced it would be doling out nearly a billion dollars to the planet’s richest man (who professes a performative disdain for government subsidies) to deliver broadband to some traffic medians and parking lots. The Biden administration is scaling back the scope of the hand out after backlash, but Musk’s Starlink is still poised to receive tens if not hundreds of millions of dollars.

Those subsidies are dependent on Starlink meeting certain projected deployment goals Musk’s newly leaked email suggests they won’t be able to actually meet if things don’t turn around quickly:

So again, the question then becomes: why is the FCC continuing to dole out millions in subsidies for a service that may not even exist in a few years? Especially when that money can be used to help fund future-proof and already proven fiber deployments across countless communities? Starlink does have the potential to provide some help to shore up U.S. broadband access, but even before these latest problems its full potential reach was limited. And the world’s richest man, who routinely professes a disdain for subsidies and “freeloading,” has made it abundantly clear he doesn’t want or need government financial help.

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Companies: spacex

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Comments on “Space X Engine Production Woes Could Screw Up Musk's Starlink Broadband Play”

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17 Comments
migi says:

subject left blank

In the original article Musk also says this gem: "Unless you have critical family matters or cannot physically return to Hawthorne, we will need all hands on deck to recover from what is, quite frankly, a disaster."

And further down "Space Explored’s take: Don’t for a minute take Elon’s mention of bankruptcy at face value [snip] Despite what the email says, if Starship isn’t actually flying every 14 days by the end of next year SpaceX won’t literally go under"

A failure by management is not an emergency for me, and if they can’t be honest about the stakes why should I trust anything they say about anything else?
I literally don’t understand why anyone would work for this dipshit or why he has a rabid fanbase willing to believe his every word.

Tanner Andrews (profile) says:

Re: subject left blank

don’t understand why anyone would work for this dipshit

Most likely the same reason that many people work their jobs: they get paid. Sure beats working for a certain unreliable real estate heir now located down in Palm Beach, if the reports are correct.

[unsuccessfully embeds image of former NY atty with melting hairdo and limited prospects of receiving money]

Anonymous Coward says:

Re: Re: subject left blank

I’m not sure working for Musk does beat working for golfer boy, though for very different reasons. Musk won’t throw you under the bus to protect himself, but he will set very high expectations. He won’t fire you for trying something that doesn’t work out, but he will fire you in a second if you don’t make heroic attempts to meat heroic goals. Honest failure isn’t a firing offence, but lying to Musk is, no matter who you are or how highly placed you are in the org. It’s a brutal environment, but if you can take it it can also be an unbelievably inspiring place to be. SpaceX is doing things that no one else is, some of them thought impossible by most not so long ago. For some this is worth the brutal work and sometimes capricious boss. For some, working on such a project inspires extraordinary effort.

For others, Musk companies are definitely a workplace to avoid. Although it must be said, a successful stint at SpaceX or Tesla looks really, really good on a resume.

Scary Devil Monastery (profile) says:

Re: Re: Re: subject left blank

It’s a problem people like Musk, Ford, Gates and Jobs have – their success comes over the burnouts of most of the people working with them.

Bluntly put it isn’t healthy to run your day job as if each day was the god damn Olympics. What comes out of those jobs are people who decided every other part of their lives take a back seat. And a lot of broken people who found out the hard way that continually pushing the envelope means every unexpected setback is that straw breaking the camel’s back.

"For some this is worth the brutal work and sometimes capricious boss."

The problem being when that capricious boss decides HSSE is an optional extra he doesn’t need and starts pushing out the beta version of his shit into the consumer market.

migi says:

Re: Re: subject left blank

"Unless you have critical family matters or cannot physically return" is not telling your employees they can earn a bit of overtime if they want, or letting on call employees know things are busy and they’ll definitely be called up, it’s dogshit.

He is literally telling his employees that they have to cancel thanksgiving because management fucked up, and pins all the blame on past management as if he isn’t the fucking CEO who was in charge of that previous manager like a week ago.

Anonymous Coward says:

Re: Re: Re: subject left blank

He is literally telling his employees that they have to cancel thanksgiving

No, because (1) "thanksgiving" is a public holiday that cannot be "canceled" by an individual and (2) one’s celebration thereof could be considered a "critical family matter" (certainly I wouldn’t be averse to using that loophole on someone who tried to push me to work on a holiday—and interestingly enough, the one time I had to tell a boss I wasn’t going to work on a weekend, and the problem was their own fault, I ended up with a promotion).

migi says:

Re: Re: Re:2 subject left blank

In case you aren’t being purposely obtuse, "they have to cancel thanksgiving" in the context of my comment means cancelling thanksgiving events or attendance at such events by SpaceX employees, not cancelling the public holiday. (To your point about individuals cancelling holidays, AFIK Congress needs to approve public holidays you are correct that it would need to be a team effort)

In response to your 2nd point about designating thanksgiving a critical family matter, that is certainly possible but frankly seems like the sort of gamesmanship which would severely displease your boss, even if it worked for you in the past. Given the lax labour laws in the US I suspect you could be fired for that sort of thing, especially at a company like SpaceX, especially in the context of Musky sending this email.

This comment has been deemed insightful by the community.
gary parsons says:

Musk Starlink Issues

I have never commented before, but I do follow and enjoy TechDirt religiously. I have a long history in the satellite industry, so I thought I could help add some context to the Starlink issue. Regarding the Raptor engines and financial implications for SpaceX overall…ramping high quality production is clearly a hurdle for them, but we should take Musk’s statements with a grain of salt (as with many/most of his pronouncements). There are clearly alternative launch vehicles, albeit more expensive, that can accomplish the task…and the Starlink/SpaceX ramifications will likely be more expensive service to absorb the added launch costs. While the current Starlink pricing is high already, receiver costs will decrease with volume…and the ‘willingness to pay’ a high price is elastic (ie. maybe not the 6+ million users the article mentions…but certainly the 5-600K users)

The second, more important critique I have of the article is the dismissive view of LEO satellite delivery vs fiber (and whether the FCC should include satellite delivery in its subsidization approach). I’ve build fiber networks and I’ve built satellite constellations in my career…and clearly fiber is superior in every possible way except one: cost effectiveness of serving rural, sparsely populated areas. So while FCC subsidization of fiber builds in small cities makes great sense, it is also critical to understand that rural/sparsely-populated areas are exactly the place where the main problem exists and where subsidization is most critical.

If you really want to close the ‘digital divide’, a suite of technologies will be required…none better than the other…each deployed where it is required. In descending order of ‘population density’, those technologies include: fiber, 5G (millimeter wave or mid-band), satellite (GEO/MEO/LEO).

Anyway, I hope this furthers overall understanding of the tradeoffs. Please don’t get pulled into the meaningless clickbait of ’empty parking lot coverage/etc’ and ‘giving away money to billionaires’…as that simply misses any intelligent discussion of an important subject.

Keep up the good work at TechDirt. I find your SLAPP and Section 230 discussions to be among the most knowledgeable I read.

Anonymous Coward says:

Re: Musk Starlink Issues

Fiber builds even in a small towns of, say, 1000 people, are profitable. Especially if the town has a small footprint – fiber is now cheaper than copper per linear foot. It holds up better, too.

The only reason providers whine and say they won’t build there without subsidy is because it isn’t profitable enough for them. That, and they’re in cahoots with the government, and can get corporate welfare whenever they want it. Even when they don’t need it (telecom never does.)

I can somewhat agree with you on ‘very sparsely populated rural areas’ – they do need subsidy – but even when they get subsidy, they often don’t get any service. See Kushnick’s numbers regarding the amount of money the major players received to provide 50/50mbps symmetrical broadband by…what was it, 2015? TO THE ENTIRE COUNTRY.

Broadband (and tangentially, CELLULAR phone service) should have been designated a utility years ago, and held to strict oversight and regulation. The digital divide wouldn’t exist anymore if that were the case – see almost any other fucking first world country on the planet if you need evidence that works.

There also wouldn’t be an infinite river of taxpayer money flowing into the gaping mouths of cretins like former FCC executive Ajit Pai, either.

This country needs some serious help.

Scary Devil Monastery (profile) says:

Re: Musk Starlink Issues

"…but we should take Musk’s statements with a grain of salt (as with many/most of his pronouncements). There are clearly alternative launch vehicles, albeit more expensive, that can accomplish the task…and the Starlink/SpaceX ramifications will likely be more expensive service to absorb the added launch costs."

There are alternatives, sure. But where Musk can muscle up the amount of lift slots he’ll need? That’s more dubious.

The issue here seems to be that Musk planned to push the envelope every step of the way and failed to consider even the slightest setback. Crashing, as it were, his whole plan.

"…the dismissive view of LEO satellite delivery vs fiber."

There are plenty of reasons to doubt cubesat constellations as Musk envisioned it.

1) Environmental – the footprint of any single launch is significant. Musk is planning on a launch schedule rich enough that it can replace the full planned starlink constellation every five years or so. In case you’d missed the IPCC memo, as things stand right now we’re already looking at a future where within fifty years or so the economy might very well not exist. He’d have done better going for the SpinLaunch method of using a flywheel launcher rather than propellant rockets.

2) Sensory. Satellite constellations get in the way of astronomy. To whit, pure science aside, we already don’t have enough eyes on the sky and are as is statistically overdue for another yucatan event.

3) Sustainability. We’re talking about a project which requires constant and massive maintenance by replacing older cubesats. Meanwhile well-placed fiber can sit in the ground for a century or more which in the long run renders it a vastly more cost-effective option. Even for rural areas.

The thing is, satellite communications already exists for emergency situations and similar. Starlink is a gimmick which offers a fast resolution at a far higher long-term cost than just subsidizing fiber.

Bilvin Spicklittle says:

Asshole or not, I had hoped that Starlink would work. I’m used to being reamed as far as costs go… but even that is forgivable if the damned thing just works. Which cable internet doesn’t. It doesn’t have to solve the problem for all 40 million people in the US without decent service either. A fraction of that would still be an improvement.

Maybe this is just a motivational strategy a supervillain uses.

Anonymous Coward says:

Trying to insert a little balance into the conversation...

First off, the FCC is giving money to SpaceX, not Elon Musk, so it is not giving money to the world’s richest man. Plenty of the other recipient companies no doubt also have obscenely wealthy shareholders. Personally, I think the whole program is a scandalous waste of money. Singling out SpaceX just because Musk is the major shareholder, when there are other recipients with a proven history of taking the money and then failing to deliver on their promises is pathetic.

Now, I can understand Musk calling for all hands on deck over thanksgiving. He had just found out that people he had trusted to do a job had lied to him and let him down. He is under pressure that most of us couldn’t even begin to understand and works harder than most of us could, day after day for years on end. In his position I would definitely have snapped and sent out a far less reasonable email (not saying his was reasonable, just that mine would have been worse). Is SpaceX likely to fail? No. Is Starlink likely to fail? Probably not. Is it reasonable for Musk to call for an "all hands" effort? Yes. Starting on thanksgiving weekend? Absolutely not – he probably did this out of pique, without thought or consideration, given that he was planning his first weekend off in months if not years. Right? No. Understandably human? Yes, I’m afraid it is.

As for Starlink failing, not likely if starship does become available for launch. They are moving to a version 2 of the Starlink satellite. All we really know about this is Musk says it is larger than version 1 and more capable than version 1. If true, any calculations about Starlink’s viability base on version 1 satellite capability is probably worthless. According to Musk, the economic viablity of version 1 satellites is marginal, but strong with version 2. As we don’t know anything about version 2 satellites, beyond maybe that they are larger, we are really in no position to evaluate that assertion, or criticize future commitments on the basis of version 1 satellite capabilities.

Anonymous Coward says:

Re: Trying to insert a little balance into the conversation...

He had just found out that people he had trusted to do a job had lied to him and let him down.

Or, you know, he has shit fits when he hears things he doesn’t want to hear, so some people stop telling him how to fix things he doesn’t want to fix, and just nerd harder on his personal vision.

He is under pressure that most of us couldn’t even begin to understand and works harder than most of us could, day after day for years on end.

Musk’s fucking pathology is his own problem.

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