- Beta testers for SpaceX’s Starlink broadband network reported download speeds as high as 60.2 Mbps.
- These results suggest SpaceX will be able to compete for billions in FCC subsidies.
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A number of participants in the beta tests for SpaceX’s Starlink satellite broadband network have reported broadband speeds as high as 60.2 Mbps download, and 17 Mbps upload, according to Light Reading. It is important to note the many variables at play here: For one, these are self-reported data points based on the experience of a few users, rather than aggregate data representing overall network performance.
Ritzau Scanpix/Mads Claus Rasmussen via Reuters
Starlink is also in the beta stage, which means that network traffic is lower than it will be once SpaceX launches commercial service in pursuit of its goal to serve 5 million users. Finally, SpaceX has only launched 500 Starlink satellites through August 2020, but the company eventually hopes to build a constellation of 12,000 satellites, per CNBC.
Despite the variables at play, the reported Starlink broadband speeds are significant for the following reasons:
- The reported network speeds suggest SpaceX could successfully compete for FCC broadband subsidies. In October 2020, the FCC is set to start auctioning $16 billion in rural broadband subsidies that will be allocated over the next decade. SpaceX has been lobbying the FCC to compete for these subsidies, even though participation has typically been limited to fixed broadband providers. The FCC hasn’t yet made a decision on whether SpaceX will be eligible to participate, but FCC Chairman Ajit Pai noted, “we want to make sure that the participants in the auction, if successful, would in fact be able to deliver,” according to The Wall Street Journal. To that end, Starlink’s beta users reported broadband speeds suggest that SpaceX will be eligible to bid, since it far exceeded the FCC minimum competitive thresholds of 25 Mbps download and 3 Mbps upload speeds.
- In the US, Starlink will likely have limited appeal outside of rural areas. SpaceX intends to launch commercial Starlink service in rural parts of the US and Canada before the end of the year. In July 2020, the average fixed broadband download speed in the US was 153 Mbps, according to Speedtest Intelligence data. SpaceX is targeting rural customers in the US because that’s where its service exceeds what is currently available to customers — in Montana, for instance, the median fixed broadband download speed in Q2 2020 was only 44 Mbps, significantly lower than the national average. SpaceX CEO Elon Musk said Starlink service will only be suitable for 3-4% of the US population. This is still a significant opportunity, particularly after accounting for the government subsidies already available or being considered to serve those in the rural US. More than 700,000 US residents have already signed up for updates on the commercial availability of Starlink.
- But Starlink’s global target market could be enormous. After launching commercial service in the US and Canada, SpaceX intends to expand its network globally in 2021. This would allow the company to serve at least a portion of the global population that lacks internet access — estimated by the UN to be around half the world population in 2019. Starlink could also target the dozens of national markets where average broadband speeds are still relatively slow.
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