Could Starlink Reshape the Internet Industry?
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Demand for broadband internet has been on the rise for more than a decade. The pandemic fueled that demand as we learned that school and most jobs can be done from home.
However, we also learned that millions of people in the United States do not have access to broadband internet either due to lack of availability or cost barriers. This defines the digital divide, a term used to describe internet access based on location and economic factors.
Change is clearly needed, and Starlink satellite internet, founded by Elon Musk of SpaceX, has great potential to reshape the internet industry.
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What is Starlink?
As a satellite internet provider, Starlink uses what is called a low-earth orbit (LEO) satellite array to deliver high-speed and low-latency broadband internet to almost anywhere around the globe. While this may not be true just yet, it is one of the company’s goals.
The LEO satellites are what differentiate Starlink from other providers, like HughesNet internet service and Viasat internet service, that operate much larger satellites and orbit Earth at much higher elevations. Starlink’s satellites are smaller and lower, but there are more of them that are arranged in a constellation to maximize reception and transmission. To date, Starlink has about 2,500 satellites in orbit.
$49.99 – $149.99/mo.
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12 – 100 Mbps
Because of these key differences, Starlink is poised to offer reliable speeds up to 1 Gbps worldwide when the array is complete. If successful, Starlink (and future LEO satellite internet providers) could be a welcome solution to billions of people around the world who currently do not have access to broadband internet.
Why is Change Necessary?
Beyond economic and accessibility barriers, the internet industry has stagnated in terms of competition and innovation. Internet options in the United States are extremely limited, especially in rural areas.
Federal Communications Commission’s (FCC) 2020 Broadband Deployment Report, finds that about 6% of U.S. citizens do not have access to broadband internet at home, with the majority of those people in rural areas.
Nineteen million people have no viable broadband internet options, even without cost barriers factored in.
When it comes to affordability, FCC data shows that nearly 35% of Americans, (~114 million people) do not subscribe to high-speed internet due to high costs. Even with incentives like the FCC Affordable Connectivity Program, internet service is nearly twice as expensive in the US than in most developed countries in Asia and Europe, according to a 2020 study from New America.
The lack of competition in the internet industry is the cause of both access and affordability. It is rare for consumers to have more than two choices for broadband internet in their areas, not to mention zero choices in some rural communities. Without competition, prices remain high and innovation and development remain low.
Until more options become available to more people, access and affordability will continue to be barriers for millions of people. Starlink could be a giant stepping stone to addressing these issues.
How Can Starlink Reshape the Internet Industry?
So far Starlink has launched over 2,500 satellites into low orbit, but its goal is over 40,000 satellites to create a worldwide network. Starlink has the potential to offer speeds up to 1 Gbps but its top speed, for now, is 200 Mbps. It could quickly surpass HughesNet or Viasat satellite internet services, and rival fiber internet speeds in rural and remote communities.
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This is possible because the LEO satellite configuration combines the performance of ground-based internet with the geographical freedom of traditional satellite internet. You could live anywhere you want and have access to high-speed internet. In fact, Starlink is already providing satellite internet for RVs.
As Starlink grows and provides more services in more areas, it immediately stirs competition even though it is relatively expensive. In order to retain subscribers, other providers will have to expand into new markets, lower costs, or provide better services without raising costs.
If successful, Starlink could improve the economic opportunity for billions of people through availability and competition, as nearly 40% of the world’s population lacks reliable internet service.
Despite its great potential to reshape the internet industry, Starlink has a ways to go.
It is an incredibly expensive endeavor to design satellites that are efficient and durable, launch them into space, and then establish and maintain stable connectivity, not to mention the natural forces at play. Over the next two years, Starlink plans to spend $10 billion to launch another 4,500 satellites into orbit.
As with most things in a free market, those operational costs are transferred to consumers. Starlink services cost $110 per month with a $599 hardware fee, which is expensive, but at least it brings about access to many who otherwise have none. However, to compete in areas with other choices, Starlink’s costs will have to come down.
Once fully deployed, Starlink anticipates offering speeds up to 1 Gbps, but that could take years. Right now, its top speed is 200 Mbps, which surpasses DSL speeds and other satellite provider plans.
Given the worldwide positive impact Starlink, and future LEO satellite enterprises, will have on availability, competition, and economic barriers, it is worthwhile overcoming these obstacles to work towards total connectivity for every person. With Blue Origin, OneWeb, and Telesat looking to launch LEO constellations, prices will drop and availability will rise.
Current State of Starlink Availability
As of July 2022, the Starlink network is at full capacity, meaning no new subscribers for the time being. At best, you can be placed on a waitlist until they launch more satellites to increase bandwidth. The earliest projection for openings is sometime in 2023.
If you are specifically looking for satellite internet while you wait or live in an area where satellite internet is your only option, HughesNet satellite internet and Viasat internet are excellent providers with services suitable for almost any need.
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