Dish, Space X Battle At The Broadband Subsidy Trough

from the good-arguments,-dodgy-motivation dept

To be clear: Space X's Starlink low-orbit satellite broadband service won't revolutionize the broadband industry. The service lacks the capacity to service dense urban or suburban areas, meaning it won't pose much of a threat to traditional cable and fiber providers. With a $100 monthly price tag and $500 hardware fee, it's not exactly a miracle cure for the millions of low-income Americans struggling to afford a broadband connection, either.

That said: if you're currently one of the 42 million Americans who lacks access to any broadband at all, the service, capping out at 100 Mbps, is going to be damn-near miraculous (if you can afford it). It's also going to be a major competitive challenge to the companies that not only compete for rural broadband attention (like WISPs, cellular providers, and last-gen satellite providers), but are busy elbowing out one another at the trough to grab a slice of taxpayer subsidies. Understandably, many of these companies are trying to slow Starlink by any means necessary.

Last month, ViaSat urged the FCC to investigate Space X's very real impact on scientific research via light pollution (a genuine problem regulators have done bupkis about so far). Since the 80s, satellite systems have had a baked in exemption from the National Environmental Policy Act (NEPA), excluding their businesses from environmental review. As Amazon and Space X fling tens of thousands of low orbit satellites into space, ViaSat is suggesting that exemption be reversed. ViaSat's motivations here are entirely selfish. But at the same time this is a real problem they're not wrong about.

Dish Network is also trying to slow down Starlink a bit more creatively by telling the FCC the company's broadband plans could cause interference in the 12.2-12.7 GHz band:

"Dish told the FCC that SpaceX's plan "would adversely affect reception at DBS consumer dishes and that the system as modified would exceed the applicable power limits under International Telecommunication Union and Commission rules. In other words, SpaceX would not be able [to] use the 12 GHz band to meet its RDOF obligations if such service interferes with DBS operations."

Earlier this year we noted how Space X was awarded $885.51 million over 10 years from the FCC's Rural Digital Opportunity Fund (RDOF) auction. The problem: like many companies, critics say Space X gamed the system by being misleading about where the company plans to offer service. As such, it's not really clear that we need to be throwing nearly a billion dollars at one of the planet's richest human beings to deploy service to an extra 642,925 locations they probably would have serviced anyway without taxpayer/ratepayer aid.

As the FCC begins digging more deeply into who actually deserves subsidization under its heavily criticized RDOF auction, Dish is trying to have Starlink's designation as an Eligible Telecommunications Carrier (ETC) under the Communications Act pulled, threatening its subsidies. Starlink's response to Dish's claims is to correctly note that Dish is largely motivated by its own best interests:

"Clearly, this challenge is part of DISH’s larger campaign to cash in on its spectrum speculation in the 12 GHz band by antagonizing non-geostationary orbit satellite operators already licensed to operate in that spectrum. The Commission should decisively reject across all of those proceedings these blatant efforts to misuse Commission resources."

You might recall that Dish is supposed to be building a new 5G network as part of a dodgy plan by the Trump administration affixed to the Sprint T-Mobile merger. The plan: to build a new network over 7 years to help counter the lost competition from losing Sprint. The reality: many still tend to think Dish will spend several years stringing regulators along, only to then cash out of their massive spectrum holdings sometime down the road, with no real network to show for it. So far, the latter path seems like the most likely outcome, in part because T-Mobile, AT&T, and Verizon really don't want the added competition.

So on one hand, you have a company in Starlink offering a promising technology, but gaming the broken FCC subsidy system to obtain ratepayer money they don't really deserve. On the other, you have a company in Dish that may or may not ever develop a major working commercial wireless network, eager to derail Starlink just in case it someday has to compete with it. Layer on top the fact that countless billions in subsidies never seem to fix US broadband woes because we generally do a terrible job mapping broadband coverage or tracking how those subsidies are spent, and you can start to see why US broadband (and policy) is a bit of a dysfunctional mess.

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Filed Under: broadband, competition, subsidies, subsidy
Companies: dish, space x

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  1. icon
    Ehud Gavron (profile), 9 Mar 2021 @ 7:17pm

    SpaceX, Broadband, and corporations


    1. Broadband to underserved communities IS important

    2. SpaceX will get my business when they enter my market

    3. Corporations and their shareholders are not the same

    1. SpaceX will be delivering broadband Internet access to underserved communities. Whether it's the lesser developed countries, Mississippi, your grandad's RV, or a billionaire's yacht, low-latency is a must for VoIP. It's also a must for interactive serves where a "back and forth" suffers from RTT delays.

    2. I look forward to having it as an option so I can pay my $99 to StarLink and not to Comcast. The $500 installation fee is a bit rough but there's value in never ever dealing with Comcast again.

    3. Now as to the corporations, previous poster wrote:

      First note that the subsidy is going to SpaceX, not Elon Musk. Bluntly, saying this is a subsidy to a rich man is just a lie, one I really wish Karl would stop repeating.

    This is the same insanity about Bezos being so rich he could pay his workers more. A shareholder is not "responsible" for corporate debts any more than he's "entitled" to take money out of its coffers when times are good. That's why it's called a corporation.

    I own stock in several public and private companies. When they do well they don't send me moare money but my stock tends to appreciate. When they do badly they don't request moare money from me but the stock tends to depreciate.

    Bezos spent YEARS losing MILLIONS and [I wish I'd bought Amazon stock then] and during that time nobody said to the stockholders "There's a cash call and you need to invest more."

    Understanding how corporations work, why they're not "people" but they are "entities" and why their shareholders are not responsible for the debts they incur -- this is fundamental to economies worldwide.

    Pre-empt: Yes, Musk and Bezos are CEOs so they do exercise the discretion to change plans. However, both are CEOs of public corporations and so have a fiduciary duty... not to their employees, but to their shareholders. This is part of the "contract" that encourages people to invest in public companies.

    It's a simple tradeoff. Nobody is forcing me to buy 10 shares of Coca Cola. I do so because I think its value will appreciate. People on the other side of that same transaction think it will depreciate. In no way, shape, or form is that money going to Coca Cola. They can file an 8-K and issue more shares at the then-current price, but the buy/sell in the markets is about stockholders.

    One final note. A lot of stock is owned by institutional shareholders, retirement funds, firefighters' and police unions, etc. They would be prohibited legally from investing if there was an undefined potential liability.

    I'm sorry I went long. It gets so tedious watching blame successful people and being demandas that these people fund the SJW wish-of-the-week. I do think that employees are generally underpaid in the US and I do favor a higher minimum wage... funded by the corporation, not the stockholder or CEO.


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