The Real Reason Starlink Will Change The Internet!
Let’s talk about how the SpaceX Starlink satellite system is going to disrupt communications and connection as we know it. We’ve already covered how Starlink works and what it can do for an individual and their connection to the internet - for many people, Starlink is their first experience with real high speed internet in their home, and that’s amazing. But there is a much wider perspective that we can look through and start to see just how many aspects of global society can be impacted by a technology like Starlink. Because while satellite internet is nothing new, the Starlink approach to satellite internet is something unprecedented, and it is a technology that is exclusive to one company that just happens to be owned by the richest and most chaotic man on the planet, or at least the most chaotic rich man. So, we know that the stage is set for something crazy to happen. Let’s get into it.
Access to Information
OK, so one of the first things that we have to establish is that Starlink is not going to just swoop in and wipe every telecom giant off the face of the Earth. I know a lot of folks like to think that, but it’s not the right mindset to be in. Fibre optic cable will continue to be a much better option for home internet connection if you have it, and 5G is going to continue to be a better mobile data connection if it’s available. And since the majority of people live in cities, that means most people do already have access to both of these services. Which is amazing. But there are still a lot of people left behind and this is where Starlink creates the most impact.
In the United States alone it’s widely believed that at least 21 million people live without access to high speed broadband internet, which is classified by a minimum download speed of 25 megabits per second, and is considered the minimum bandwidth for a modern household - that accounts for 6 point 5 percent of the population being below the minimum level of connectivity. This number is according to the Federal Communications Commision. But an independent study published by a group called Broadband Now Research in 2020, which was then expanded and retested again in 2021, found that the actual number is probably closer to 42 million Americans that live without access to high speed internet at home. So it could be as much as 13 percent of the US population left behind. And it’s no surprise that these numbers concentrate in particularly rural areas, with Arkansas, Mississippi and West Virginia showing the lowest levels of connectivity - the study found that up to 50 percent of West Virginia residents do not have access to terrestrial broadband.
And those people who don’t have broadband or 5G access right now, are unlikely to be getting it in the future. What’s happened is the telecom companies have already done an assessment of the costs and profits associated with expanding their infrastructure into these places, and they’ve likely concluded that it would cost them more money to build than they would be able to make. Which you can’t really blame them for, obviously it would be unprofitable to run fibre optic cable all through the Appalachian Mountain range just to serve less than a million people.
And that’s a big problem for a society where the majority have access to all of the information ever collected and recorded by modern society in their pants pocket, while more than one in 10 people don’t have it. It’s a great divide. Even if you only ever use the internet to look at flat earth videos, at least you have the choice to do that and the access to that information available. I’m not saying the internet is the only source of division in America or on a global scale for that matter, obviously it’s coming in from all angles, but when it comes to something as fundamental as access to information, we should at least all start from a level playing field. After that, you do you.
The Global Space Economy
Anyway, back to Starlink, don’t worry, we haven’t forgotten the whole point of the video. Starlink is the big answer to the big problem. Because Elon Musk doesn’t need to build a 5G tower in the middle of Sasquatch country, he can just launch a few dozen boxes into space on his own personal rocket ship and we’re all set. The barrier to entry for Starlink is very low compared to legacy telecom infrastructure - if people can see the sky, they can use Starlink. According to Elon’s analysis of the costs and benefits, he believes that there is an opportunity to generate 30 billion dollars in revenue globally just by providing high speed, satellite internet to those who need it. And that’s probably a low ball estimate.
In a 2020 report, Morgan Stanley identified satellite broadband internet as the most significant short and mid-term opportunity in the global space economy, accounting for 50 percent of the total space industry growth by 2040. They project that satellite based broadband will begin to drive down the cost of data at the same time that demand for data will explode world wide.
Right now, satellite based internet is expensive. Starlink is cheap for what they offer, but they’re still pretty expensive at a service fee of 99 US dollars per month. That’s the same cost as a Viasat Gold Unlimited Plan - but while Viasat offer just 50 megabits per second download and 3 megabits per second upload speed, Starlink is already averaging 114 megabits per second download in the United States and 134 megabits global average download speed - with just under 14 megabits per second as the average upload speed.
And unlike the traditional satellite internet providers, the cost of Starlink is only coming down. That’s thanks to innovations that are already being made by SpaceX and Tesla. Because of the SpaceX Falcon 9 reusable rocket, the average cost for a satellite launch has declined from 200 million dollars to 60 million dollars. Morgan Stanley estimates that with further development into reusable rocket technology, like the SpaceX Starship, the average cost for a satellite launch could drop as low as 5 million dollars. And that’s at market rate.
On the manufacturing end, Tesla is figuring out how to make very complex electric cars as quickly and cheaply as possible - they’re not there yet, obviously, the waiting list for a Tesla is a year long or more, but the change is coming. Elon Musk can take everything that Tesla is learning right now with the development of the Gigafactory, and roll that into Starlink production. Morgan Stanley estimates that improvements to manufacturing efficiency on the global level will see the average price of a satellite drop from 500 million dollars to 500 thousand dollars. We know that Starlink satellites already cost as little as 250 thousand each, so it’s not crazy to think that over time the per unit cost reaches something around 10 grand. And as the cost of putting satellites into space comes down, the cost of the service can come down in step. Maybe by 2030, Starlink can reduce the monthly fee to 10 bucks or even less if they choose.
And that’s the point that we really need to reach before Starlink can become a true disruptor for society on the global level. Because access is one side of the problem - but the other side of the coin is equity - being able to afford to connect. One hundred dollars per month is already out of reach for many people in the United States, the wealthiest country in the world. A hundred bucks for someone in rural Cambodia is an unfathomable monthly expense. But we’re seeing a pretty clear path here that leads to Starlink reaching that level of access and equity for the global population where there is virtually zero barrier to entry. If we look at the logistics and the opportunities, there doesn’t seem to be any other company right now that could possibly accomplish this any time soon, except for SpaceX and Starlink.
Beyond the Internet
Here’s something that Elon has mentioned a couple of times on his Twitter, and that’s the idea of Starlink supporting data transfer that is entirely within the Starlink network and doesn’t actually have to touch the internet at all. Most recently, on November 13th, Elon tweeted,
“Inter-satellite laser communications means Starlink can carry data at the speed of light in vacuum all around Earth before touching ground.
Over time, some amount of communication can simply be from one user terminal to another without touching the Internet.”
That’s obviously not something that’s going to happen soon, especially if Elon Musk isn’t putting a timeline on it. We know how much he loves to over promise and under deliver on schedules, it’s just something that you get used to. But it is a really interesting concept to start thinking about, a way to send data at high speed that is completely outside of everything that we consider to be the internet right now.
Everyone loves to talk about how we can decentralize more and more aspects of our digital lives, and people are already working on this idea of decentralized space infrastructure - blockchain based applications that can be built entirely in space. It’s all pretty far out right now, but you can maybe imagine it as supercomputers in orbit linked with laser based communication operating on a blockchain network. Anyone who’s used crypto currency knows that the slow transaction speeds and massive power consumption involved with the blockchain is a major downside to the whole industry. But if we moved that into orbit, where communications happen at the speed of light in a vacuum and energy comes from the sun and heat from the processors is just dissipated into space… That would solve a whole lot of problems with decentralized finance.
Or something like that, I can barely understand how crypto works on the ground, let alone in space. It's more like a thought experiment for what new kinds of frontiers a technology like Starlink can open up for us in the future. It’s really fun stuff to think about and let your mind wander.
As always, we want to hear your theories in the comments section down below. Let’s keep the conversation going on what Starlink can change for society - we’re in such early days right now of just sharing the individual experience with the technology, it has so much room left to grow.