Musk’s Starlink Says It’s ‘Unfair’ The FCC Pulled $886 Million In Subsidies Musk Claims He Doesn’t Want Anyway
from the love-hate-relationship-with-subsidies dept
You might recall that Elon Musk claims that he hates taxpayer subsidies. They should all be “deleted.” Except for the subsidies given to his companies, apparently.
You might recall that Musk’s Starlink gamed the Trump FCC Rural Digital Opportunity Fund (RDOF) to grab $886 million in taxpayer dollars. It was a deal consumer groups noted was a huge waste of money, because the proposal itself — which involved bringing expensive satellite broadband to a lot of places like airport parking lots and traffic medians — wasn’t the best use of taxpayer funds.
The Biden FCC noted the problems with the application and forced Starlink to re-apply last summer. Starlink did, but was then rejected last month by the FCC, which stated that they weren’t sure Starlink could meet program speed goals, and might not be affordable to the heavily rural, lower income users being targeted (Starlink requires a $600 up front equipment fee and costs $110 a month).
It’s worth noting the FCC didn’t just single out Starlink, several other companies had their wrist slaps for subsidy applications for projects that made no coherent sense. I tend to think the Biden FCC call on Starlink was the correct one. And given the regulatory earlobe nibbling Musk’s companies receive in general (see: auto safety regulations), I’m surprised they even made it.
One, Musk himself has made it clear he’s not sure if Starlink will even survive the next five years. Two, Starlink is too expensive for users in many of these rural, lower-income target areas. Three, Starlink capacity (which maxes out at around 800k users for the moment) is only a drop in the bucket in a country where 20-40 million lack access and 83 million live under a broadband monopoly.
The FCC argued that if you’re going to spend taxpayer money on broadband, it should likely be prioritized for more affordable, higher capacity, future-proof fiber. Not thrown at a limited capacity satellite broadband service owned by one of the wealthiest, erratic, and subsidy-averse men on the planet:
“Starlink’s technology has real promise,” continued Chairwoman Rosenworcel. “But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032.”
Needless to say, Starlink isn’t happy about losing out on its billion dollar boondoggle. In a new appeal filing with the FCC, Starlink complains that the FCC’s rejection was “flawed as a matter of both law and policy,” “erroneous and unreasonable,” “contrary to the evidence,” “grossly unfair,” and will hurt poor people:
the Bureau Decision, if allowed to stand, would leave the Commission with no plan to connect the many Americans living and working in the areas covered by SpaceX’s winning bids, stranding them on the wrong side of the digital divide
There’s a pretty broad consensus among consumer groups and telecom experts that the best use of that money was to spend it on more reliable fiber. Again, Wall Street estimates that Starlink’s max global capacity is somewhere around 800k users for the time being. The speed at which the service is growing under those limitations means existing users are just starting to see network slowdowns:
Hundreds of miles south near Leonard, Texas, John Lawyer has encountered download rates on his Starlink dish that can dive as low as 1Mbps, especially during the evenings. Speeds “are absolutely getting worse,” he said. Lawyer and his wife could make do with a download rate as slow as 30Mbps. “But we aren’t getting even that with any kind of useable consistency,” he added.
And again, Starlink’s high costs (not many struggling, rural households can afford a $710 first month bill) means it’s simply not affordable to these largely rural, poor markets Starlink professes to be such a big fan of. And this is before you return to the fact that Starlink’s original application pretty clearly tried to exploit FCC program guidelines to grab money for deployments that made no sense.
Now, Starlink promised that the network would hold up fine as subscriptions soar, that next generation satellites will improve capacity many years from now, and that they’d offer more sensible pricing in some of these areas. And maybe some of those claims are even true. It’s a Musk company, so who knows.
But even if Starlink survives and thrives, I still think the FCC made the right bet. Starlink doesn’t need taxpayer money. Starlink’s CEO is on record repeatedly stating he doesn’t want the government’s money. But I talk weekly to countless, smaller fiber ISPs (many community owned and operated open access networks) absolutely desperate for money to deliver faster, cheaper, more reliable fiber service.
The broadband subsidy process should prioritize fiber, then fill in the spots with 5G and fixed wireless. Low-orbit billionaire hobbyist services from Starlink and Amazon can come in and fill in any remaining gaps. There’s nothing “grossly unfair” about that approach. And you’d think a company whose CEO is routinely on record stating he hates government subsidies wouldn’t care either way.
Filed Under: broadband, competition, digital divide, fcc, high speed internet, low orbit satellite, subsidies, telecom
Companies: spacex, starlink
Comments on “Musk’s Starlink Says It’s ‘Unfair’ The FCC Pulled $886 Million In Subsidies Musk Claims He Doesn’t Want Anyway”
I know of one person that had starlink and returned it, because it’s so limited in utility.
https://twitter.com/stephenjbrooks/status/1494404830248452096
returned it because there’s so many ports shut, you can’t even have people FTP you, because it’s so NAT’d, due to bad planning.
Re:
To be fair, that’s “bad planning” done mostly before Starlink ever existed. IPv4 has been obsolescent since 2015 (when the last address blocks were allocated), if not earlier.
I’ve heard rumors that Starlink is really half-assing their IPv6 support though, which is entirely their fault.
Psshh, and when would most customers get their equipment or service anyway? 2030?
Open-access fiber, I hope. Otherwise we’re just helping the old monopolies, or replacing them with the same thing.
That are bad unless they are for me.
There's a bit of Not Getting It here
So, let’s get this straight.
Anywhere on Earth, if one looks straight up, after getting past the air molecules, there is Space. With stars, galaxies, other planets, asteroids, and, yeah, low-earth satellites.
Is there Space above parking lots? Sure.
Is there Space above inner city neighborhoods? Yep.
Is there Space above airports? Uh-huh, that’s the way it works.
Is there Space above land in the Middle of Nowhere? Sure, Space is everywhere, up there.
In everything but the last, one can get Internet access via fiber, cable, 5G (or 4G or 3G), or (shudder) DSL connectivity.
Starlink happens to serve everywhere where one can plop down one of their dishes. In particular, out in the boonies where the Big ISPs refuse to go. And if you give the Big ISPs money to go to nowhere… they take the money and they don’t go there anyway. Starlink will take your money and give you connectivity at reasonable speeds anywhere in their service area. Which is getting close to being the entire Earth.
Now, I understand that hating Musk is kind of like shooting fish in a barrel: It’s easy, as a human being he doesn’t quite fit like a square peg in a round hole. But screaming at SpaceX and Starlink because the satellites go everywhere is just, well, kind of weird. What do you want, the satellites to zig and zag so they don’t happen to go over populated areas or something?
In the meantime, if you’re in Moosejaw in Nowhere County, Starlink is your best bet. And a couple hundred Mb/s is sure better than the nada you’ll get from the DSL-deprived CO 50 miles down the street.
Re: Funny!
you’re funny! Over 10k in people have given Musk $100 for a dish that they haven’t even received in 3 years! So where is their connectivity at? Reasonable speeds? So 1Mbps is reasonable? Okay! StarJunk is NOBODY’s best option! It’s dead always was. Musk even said that at the start!
Re: You missed the point
Neither this article nor the FCC have complained about Starlink’s potential ability to serve remote areas. In fact, Jessica Rosenworcel specifically applauded that.
The point is that Starlink cannot do so at a low cost, which is the whole point of this fund. That Starlink tried to game the system by promising to service stupid places like the middle of highways. That Starlink cannot currently service 800,000 people with anything anyone would describe as broadband, let alone 20 million. That in exchange for this iffy service, Starlink wants an outsized portion of the money available.
I get it. Satellites are expensive. It would be nice to be subsidized. But that doesn’t mean you deserve to be subsidized. And those points have nothing at all to do with “hating Musk.”
Musk: Subsides are terrible when they're not to me
Unless the majority if not all of that amount was slated to help pay the costs of getting the hardware and paying the mandatory first month’s fee then throwing money at Starlink in order to help poor people strikes me as solving the wrong problem.
The company having more money to work with doesn’t help individuals who would still have to deal with the several hundred dollar entry-fee unless that money is subsidizing them rather than the company, and at that point you might as well give it to the people directly and let them use it to pay the required amounts themselves.
Actual limitations
Moffett makes some incredible assumptions, and even his ending numbers are plus or minus 33%. Jon Brodkin takes a different approach:
https://arstechnica.com/information-technology/2020/08/spacex-now-plans-for-5-million-starlink-customers-in-us-up-from-1-million/
Either way, 1M, 5M, it’s more than 800K. The clear conclusions (based on Musk’s own words and SpaceX filing):
1. The higher density area you’re in, the less likely you are to be well-served (if at all) by StarLink.
2. The more rural area you’re in, the more likely you’ll love it.
Anecdotal stories about “My neighbor returned his dish” or “My dog ate my homework” are statistically insignificant. What is significant is that StarLink really is up there, and unlike Iridium, LEO delivers in latency what people want – gaming, and VoIP.
Those also require low jitter (difference in round trip times for various Internet Protocol packets in a communication…). That’s not so easy depending on handoffs between birds serving the ground station(s) but maybe the ability to do soft-handoffs — connecting to multiple stations and switching seamlessly — will help. And lasers. Lasers help.
FYI Not only do I disbelieve Moffett’s calculations, he bases those on an unnamed analyst. Really? Also, I find that other than being quoted by Karl here on Techdirt, most of the top searches for his content on StarLink are hosted… by… him and his firm.
Original article: https://www.lightreading.com/satellite/starlinks-threat-to-wired-broadband-minimal—analyst-/d/d-id/768528?
Draw your own conclusions from the site, and the “unnamed” analyst, and random result range without explanation.
Re: *yawn* same old crap
stick to posting it on /r/space, where you have fellow fanboys to back you up.
Every single criticism is ‘moffatt this’ or moffatt that’. And you’d have a point, IF HE WERE ALONE IN SAYING THAT. He isn’t.
ALL the data says 800k, to 1M max, because that’s the max throughput of their system.
Sure, they may want licensing for 5 million, as in Jon’s article, but what he didn’t mention there is that there’s no way to serve that many without a massive increase in the number of satellites in orbit, which was also requested (and likely to be denied).
And yes, I’m sure starlink does serve people in rural areas better, and you know what would be great to show that – prioritizing the people in those areas to get service, and not people who, like my friend 7 months ago, live in an area with multiple high-speed providers (he lives on Long Island, and works at Brookhaven National Lab, and went back to his faster wired internet after starlink was returned)
So while you continue to do your ‘bicep curls’ as past of your “Musk-Xercize” the rest of us will deal with actual facts, specifications, and reality.
Re: Re: fanbois
Merely saying:
If you’d like to unclench your cheeks and open your mind to data, check out http://www.satmagazine.com/story.php?number=1026762698
E
P.S. This isn’t about me, but if you insist: I’m not a fan of Musk, nor of Tesla, and am not a StarLink user nor know anyone personally who is one. My house is a space-fan house, so we watch any launch regardless of the company.
Re: Re: Re:
ah yes, so…
not 800k, 520k
I don’t know why they included europe and canada, but you could get to a theoretical maximum of a million in the US, including alaska and hawaii.
In fact, roughly 1-in-2 people in alaska could get starlink, in theory, for an area of 600,000 square miles, and a population of 700k.
In other words
it’s a shit technology
high-frequency trading in the US financial market
Light (information) travels faster in the air (microwave) than in low-oxygen copper (coax) or graded-index glass (fiber), but faster still in space, thus laser-linked low-earth-orbit is the fastest (least latency) so far. Musk is the richest person in the world as the result
Re:
Do you have any evidence of this? I also expected Musk to try for the low-latency trading market, but haven’t seen any indication that it’s happening yet, let alone that it’s what made him the richest person in the world.
The speed difference between air and space is much too small to matter. Light travels around 0.9997c in air (but less than 0.7c in fiber), so it’s always faster to stay in low-altitude air and avoid the 700 km round-trip to orbit. Starlink, however, would avoid the need for ground-based relay stations that may be politically or technically infeasible (e.g. in oceans).
C in various media
C in vacuum: 3.0×10^8 m/sec. Let’s abbreviate as C(vacuum)
C in air: 2.9979×10^8 m/sec.
C in FO (depends on sm/mm and material): generally 70% of C(vacuum) or 2.1×10^8 msec
C in Cu: 97% of C(vacuum)
C in Ag: near C(vacuum)
C in Coax (steel): 66% C(vacuum)
The point is that even the worst of these (Coax) changes it from 3.0E8 to 2.0E8 meters per second.
To put this in perspective, if you somehow had a magic lossless heat-free coaxial cable from US coast to coast, that 4.8E6 meters would still be sub 20ms, and rtt sub 40ms. It only gets faster with lasers, vacuum, air, etc.
Note of course that there’s no such cable, so realistically a majority of your SFO-JFK run would be in FO, and therefore faster. We can ignore repeaters because they’re necessary no matter what you do terrestrially, and having a ground station for Starlink and then terrestrial to wherever is pretty much the same.
Re:
Hollow-core fiber is available now, with speeds very close to c. Companies are still working to improve it—for example, by increasing the distance between repeaters. If Starlink takes over the intercontinental low-latency market, it might not hold it for long.
/s, and i appreciate your math
Either I’m missing your /s or you missed mine:)
Bloggers & Musk did speak of a high-value customer base in high-frequency traders long before the launch of the first Starlink into LEO.
On a side note, when my studio was on Ventura Blvd. 40 years ago, a guy “checking the nitrogen pressure on coax lines 20 feet below the sidewalk, secure lines for the DOD” he said. 20 years later, contractors were pulling up the copper coax lines buried a 1,000 feet East of my Brother’s mountain property 25 miles North of LA, it was said that they went to Salt Lake. See https://coldwar-c4i.net/ICAF_lectures/L53-109.pdf
Right conclusion wrong reason
It’s an urban/suburban misnomer that rural communities are “struggling“ based on income reporting.
You’re talking about locations where a 3 bed 3 bath house is under $50k on multiple acres. The cost of living in a city has no comparison to rural America.
A penthouse living American in NY or Chicago or LA spends more in 4 month on just “basic needs” than an average rural family of 4 spends in a year.
It’s part of the reason I keep pointing out to the more urban, greater-city-area people that their need for higher wages doesn’t translate on a fully national level.
The national average price for Angus today is $8.50ish per pound. Remove the cities and surrounding suburban areas that price plummets to $6
But if I drive 2 hours west or south I can go to a local store and grab local beef slaughtered yesterday for just $4 per pound
Struggling is an offensive term to rural communities. The only place rural life is struggling is the awful oil prices.
————————————
That bit of cultural education out of the way:
Starlink, At its price, is never going to make a dent in rural areas. $1320+ per year?
That higher than property tax on a 10 acre property!!!!
There’s no way that is going to work out.
Re:
Nobody said all rural households are struggling. The point is that among those who are, Starlink is not going to help.
Starlink has 700k subscribers right now mostly in the US. The max definitely isn’t 800k for the 4,500 satellite constellation while they are at ~3,000. The subsidy Starlink got was for areas other ISPs didn’t even bid on since it’s too expensive for them to roll out service there. Fiber almost always bids gigabit and SpaceX only bids above baseline, so if fiber bids they are heavily preferred according to the auction rules. Starlink wasn’t supposed to be tested on QoS until a couple of years from now, which is a pretty compelling argument. 2/4 commissioners have voiced support for Starlink so far.
Re:
Might want to check you maths there chief.
and by that, I mean ‘you might want to do some maths there chief’
The 700k figure isn’t for active accounts in the continental US – that number is around 150k.
Now, depending on where you look on their [deliberately] confusing disclosures, 700k is either their active acconuts worldwide, or their deposited waitlist in the US.
But it’s easy for anyone with some basic skills to check that theres not 700k active, not unless musk’s turned the service into a TV service, because the hardware physically can’t support that many users each having their own feed.