from the don't-believe-the-hype dept
We’ve noted for a while now how Elon Musk’s Starlink low-orbit satellite broadband service isn’t going to be the miraculous revolution many people think. For one thing, the service can currently only provide service to a maximum of around 800,000 subscribers globally. For context, around 20-40 million people in the U.S. lack broadband, and 83 million live under a broadband monopoly (usually Comcast).
Another issue: for millions of Americans the real issue is broadband affordability (see this OTI report on the subject). Starlink already wasn’t cheap, launching at a price point of $100 a month, with a $500 first month down payment for hardware. The company is now bumping the monthly price to $110 per month, and users will now have to shell out $600 for the same hardware:
“SpaceX’s internet-from-space program Starlink is increasing prices for both the purchase of Starlink kits and for the monthly service, according to a new email sent out to customers this afternoon reviewed by The Verge. The company says the “sole purpose of these adjustments is to keep pace with rising inflation.”
The service currently has around 250,000 active users worldwide. Roughly 500,000 people have pre-ordered, many of whom have been waiting for more than a year for service. Those users were already pissed off because Starlink customer service (or even a basic email update on shipping status) is basically non-existent.
Now, not only are new customers having to pay more for service, customers who already pre-ordered are being told they have to pay $550 for the hardware (instead of the $500 originally stated), and they’re understandably not particularly happy about it at forums like Reddit:
Went to bed early last night not feeling the best. Woke up this morning feeling better and checked my phone. EMAIL FROM STARLINK. YES! THE WAIT MUST BE OVER!
Nope. Still waiting… but here’s a $50 price increase for the dish and a $11 per month increase. What a kick in the nuts.
To be clear, Starlink is a nifty service if you can get it. Reviews so far have been decidedly average, though for many rural users gigabit service with low latency is going to be a huge upgrade from nothing, crappy DSL, or pricey, slow, and capped traditional satellite broadband.
Starlink’s obstacles are several fold. Musk has already made it clear that the service won’t have the capacity to disrupt existing duopolies, and may be tricky to keep financially viable even with a focus on underserved areas. Obtaining the scale needed to be profitable also requires fixing Dragon engine production woes and ramping up satellite production despite ongoing supply chain issues.
Even if everything goes perfectly smoothly, and the company launches its full array of 42,000 low orbit satellites, the maximum global reach is still estimated to be only around 6 million subscribers — which would still only be a drop in the bucket for demand in the U.S. alone. The uncertainty of whether Starlink will even survive means the FCC likely should stop subsidizing the billionaire-backed effort.
The other issue: as more users flood to the network, the inherent physics of limited satellite capacity means the company will likely start implementing restrictions on usage, whether that’s the throttling of HD video, or the imposition of usage caps and overage fees, driving up already high prices further.
And this is all before you even touch on the fact that scientific researchers say the Starlink constellation is creating significant light pollution that harms scientific research and cannot be mitigated (Musk stated in 2020 Starlink would “not cause any impact whatsoever in astronomical discoveries.”).
So again, while Starlink is a great niche option if you can actually get and afford it, anybody acting as if it’s going to disrupt a broken U.S. telecom market isn’t living in reality. It’s taking a year for many people to get it, it’s not affordable for a large swath of the people who need it most, and even at maximum potential it will struggle to have any meaningful impact on the US broadband market.
It’s a nifty niche product with a lot of obstacles to overcome to succeed and survive. Most broadband policy experts I talk to still think it makes better sense to spend the majority of investment cash on deploying “future proof” fiber to more places, and plugging any remaining holes with fifth-generation (5G) technology.