The new space race for high-speed internet

1 year ago

Today, broadband internet is most reliably delivered via fiber-optic cables, which is no doubt why much of the $3.3 billion in federal dollars recently allocated to Texas through the Broadband Equity, Access and Deployment (BEAD) program will go to support the expansion of fiber-based broadband infrastructure in the state.

However, in areas of the world where the terrain isn’t amenable to fiber, the cost to lay fiber is prohibitive or fails to be commercially viable. In very rural or sparsely populated areas, satellites can deliver broadband from outer space. Competition to deliver the most reliable, affordable broadband through thousands of low earth orbit (LEO) satellites has taken off, in what some are calling a new space race.

Amazon vs. SpaceX

Last week, Amazon announced progress on Project Kuiper, its satellite internet venture, with the opening of a facility on the site of the Shuttle Landing Facility, a part of NASA’s Kennedy Space Center. Space Florida, the Florida equivalent of the Texas Space Commission, currently manages the facility. Space Florida and the Texas Space Commission are both designed to help grow the space industries in their respective states.

Project Kuiper is Amazon’s answer to Starlink, SpaceX’s satellite internet constellation of more than 4,500 satellites with a customer base of 1.5 million subscribers. With over 50% of the market share for satellite internet worldwide, SpaceX currently leads the race to capture the nearly 4 billion underserved people worldwide who remain unconnected to the internet.

And the market for satellite broadband is only going to grow. Morgan Stanley estimates that the space economy will grow to a $1 trillion industry by 2040. Satellite broadband will constitute 50% of that estimated economic growth.

What’s stopping the delivery of high-speed internet from space?

Affordability

Affordability has long been a limiting factor for satellite broadband adoption. The launch of Project Kuiper, which brings added competition, could lead to greater affordability.

Amazon aims to launch a residential broadband service with an initial equipment fee of $399. Starlink’s equipment comes with a higher price tag, costing residential customers $500 to install.

This initial equipment fee covers the cost of installing a terminal (satellite dish) on the customer’s property. This terminal then connects to the nearest of thousands of low-earth orbit satellites already launched into space on a rocket (either a SpaceX or Blue Origin rocket) to deliver high-speed internet to the customer.

Capacity

With the growth of the customer base, satellite broadband tends to slow down, cutting into the high speeds that space-based internet may initially deliver. Launching additional satellites into orbit in theory solves this problem, but some argue doing so contributes significantly to the problem of increased collisions with space junk and growing interference with astronomical research.

Latency

Latency indicates the amount of time it takes for data to transfer across a network. Satellite internet has typically been associated with high latency, making it unsuitable for internet use that involves streaming.

Fortunately, LEO satellites — the kind that SpaceX and eventually Amazon plans to launch into space — offer much lower latency because they are closer to the Earth than traditional satellites, but lag times are still inconsistent.

What does this mean for Texas?

Increased competition in satellite broadband means more options for rural Texans who get their internet from space. And with more providers vying for customers, we’ll hopefully see the cost to the customer go down.

After all, the affordability of broadband internet — whether delivered from space or fiber-optic cables — remains one of the greatest challenges to closing the digital divide in our state and globally.

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