Elon Musk Talks up Starlink as a New Breed of Internet Service Provider Takes Off

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Mar 12, 2020
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After the launch of Sputnik 1 on October 4, 1957, Americans looked up from their backyards and saw a threat. Maybe some recognized the progress the first artificial satellite represented. But for most, that dim light speeding by in the night sky simply filled them with fear. Anyone, anywhere on the planet could be reached from space.

The paranoia surrounding space technology is now less than what it was 63 years ago. Or at least that is what a new generation of internet providers is hoping.

On Monday, at the Satellite 2020 conference in Washington DC, Elon Musk talked at length about Starlink – the SpaceX project to send thousands of satellites into space to provide high-speed internet access here on Earth. Almost 300 Starlink satellites are already active. SpaceX estimates it will start providing internet service this year in America and next year all over the world.

starlink satellite
A Starlink satellite on orbit. Source: Steve Jurvetson, Future Ventures

Starlink has competition. Four other projects are aiming to provide internet access anywhere in the world using a constellation of satellites. Two others have smaller ambitions but still aim to provide internet access in underserved areas.

A new breed of internet provider

loon balloon
A Loon high-altitude balloon. Source: Loon

During the interview, Musk said, "I want to be clear, it's not like Starlink is some huge threat to telcos. I want to be super clear it is not." This probably means that someone out there thinks that the new internet providers will be competition for existing ones, such as small and large telecommunications companies all over the world

Some would argue that more competition is a good thing. The Alliance for Affordable Internet estimates that more than 2.3 billion people live in a place where a monthly 1GB data packet is unaffordable. Internet World Stats estimates that 3.2 billion people don't currently use the internet, due to both the lack of availability and unaffordable cost of access. According to The Alliance for Affordable Internet, "Market competition is one of the most influential factors for the price of mobile data,".

However, access to high-speed internet is not just a problem in poorer countries. Even in the US, penetration of high-speed internet is as low as 70% in some states. The effects are social as well as economic. Remote work and setting up thriving businesses are all possible far away from urban areas, but only if the infrastructure is good enough. In 2020, a big part of that infrastructure is a fast internet connection. For example, the website BroadbandNow reports that high-speed broadband service in rural areas would "generate $65 billion annually through increased crop yields for farmers."

It's easier to see how these new providers will immediately benefit users in North America and Western Europe, which is also where all the companies listed above are based. Despite recent disagreements over the use of Huawei equipment in 5G networks, these markets are relatively open to new competition. These new services could fill the holes in high-speed internet coverage for rural users in the US, Canada, and Europe.

It's harder to see how this will make a dent in internet coverage in poorer countries, despite the promise to provide "internet for everyone." The cost of any of the services isn't known yet. But even if it is affordable for the poorest of users, they may not be able to get internet access from Amazon, Facebook, or Starlink. Lack of trust and lack of openness will both be issues.

The story of Facebook Free Basics in India is instructive. Facebook wanted to offer affordable internet with access to a limited number of sites through its initiative. Facebook withdrew Free Basics amid widespread protests in 2016. There were many problems with the initiative, not least among them a conflict of interest in letting Facebook decide which websites would be accessible. Even more than that was a lack of trust that Facebook had good intentions along with a direct conflict with Indian internet providers. Even if we take away some of the restrictions of Free Basics, those two fundamental problems will still remain.

Many countries will surely not allow internet access from the providers on the basis that local governments won't be able to control them. It will be even harder for American companies. Recent revelations that the CIA secretly operated an encryption company for years, giving it access to encrypted messages, won't be easily forgotten. Everyone has also heard about the US government asking technology companies for ways around encryption in all kinds of internet services. Many won’t believe that these new internet providers are neutral, even if they are.

Universal internet access and increased competition in the telecommunications industry sound wonderful. But there are many hurdles to get over before either is a global reality. A lack of trust among countries may be the biggest problem of all. This new battle of internet providers might not be so different from the 1950s Sputnik paranoia, after all.

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