Starlink, an American company founded by Elon Musk, aims to position itself as the world’s leading provider of Internet services. To achieve this, it is implementing an ambitious initiative involving the creation of a global constellation of thousands of satellites, with revenues of 30 billion dollars that year. Financial projections obtained by The Wall Street Journal in 2017 show that the company expects to have over 40 million subscribers to the service by 2025. This satellite system is named Starlink. In 2018, SpaceX launched two of its Internet satellites into space for the first time, the first of nearly 12,000.
This network promises to bring broadband connections to every part of the world, including for military, scientific, and exploration use, overcoming the technological and financial challenges that previously led to the failure of similar projects, like Bill Gates‘ Teledesic project in the 90s. Despite the complexity of launching and coordinating a satellite constellation of this magnitude, Starlink has achieved notable success. It currently has more than 5,000 satellites in orbit and claims to have over 2 million active subscribers.
The operation of these communication satellites falls under the classification of non-geosynchronous satellites (NGSO), operating in constellations closer to Earth. Due to their proximity to Earth, NGSO satellites must travel at higher speeds to maintain their orbits. These NGSO satellites are subdivided into medium Earth orbit (MEO) and low Earth orbit (LEO) satellites. Starlink is in the latter category, operating at altitudes of 500-1200 km.
To offer satellite internet, part of the radioelectric spectrum is needed. Globally, the International Telecommunication Union (ITU), a United Nations agency, is responsible for granting orbital space for satellite use. In each country, the radioelectric spectrum and telecommunications frequencies are regulated by their respective telecommunications authorities. The first country to license Starlink was the United States through the Federal Communications Commission in 2018. Nationally, the National Telecommunications Commission (CONATEL) granted a license to Starlink in October 2023 under Resolution 2508/2023.
Concerns about its impact on the earth and territorial sovereignty
Concerns about Starlink center on its constellation of low Earth orbit (LEO) satellites. These pose risks for astronomical observation, electromagnetic interference, and potential satellite collisions. The danger of creating space debris at high speeds of 25,000 km/h, known as the Kessler syndrome, could result in impacts between orbiting satellites. Additionally, environmental issues associated with numerous launches, such as how rocket propellant exhaust gases interact with the atmosphere, are mentioned. These problems, combined, raise alarms about the prudence of deploying massive satellite constellations.
Andrew Falle, a researcher at the Outer Space Institute of the University of British Columbia, warns that if even a fraction of the planned millions of satellites are launched, it will be imperative to establish national and international regulations to address sustainability challenges. These challenges include collision risks, light pollution, and re-entry hazards. In an interview addressing the mega constellations of launches until October of this year, Falle highlights the significant figure of 5000 Starlink satellites, 630 from OneWeb, 2 from Kuiper, an additional 3000 from Starlink with Amazon, and 1 Cinnamon-937 from Rwanda. This amount, plus the other satellites in orbit, adds up to a total of 337,320 units to date.
The sustainability of orbital space is threatened by mega satellite constellations, as, on one hand, they would further complicate efforts to detect and track asteroids and comets that could pose risks to humans. This includes impacts at local, regional, or even threats to the survival of the entire species.
There’s also the sustainability and lifespan of these satellites. The average lifespan of a Starlink satellite is about 5 years. Due to their proximity to Earth, Starlink offers low-latency connectivity, but the satellites are more affected by atmospheric drag. To counter this, low Earth orbit satellites require periodic propulsion adjustments to maintain their trajectory, limiting their lifespan based on the amount of fuel they can carry.
There’s also significant concern about the massive deployment of Starlink satellites covering the skies without regulatory intervention from affected countries. With more Starlink satellites in orbit than all others combined, the lack of an effective regulatory framework allows space to be exploited by the first comer. Starlink seems to aspire to establish a de facto regulatory framework through its presence.
The issue of national sovereignty in space is not new, as in 1976, there was an attempt to establish sovereignty over geostationary orbits. Although the Bogotá Declaration was unsuccessful, it highlighted the complexity of equitable access to space. Today, only a few countries and an inter-governmental organization can launch rockets into space, challenging the idea that space should be free for all. The current situation with low Earth orbit (LEO) satellites presents similar challenges, as the intensive use of certain orbital regions could exclude other actors, potentially violating the 1967 Outer Space Treaty.
Who sustains this business model?
In an article by Steve Song called “Starlink and Inequality”, the author highlights that one of Starlink’s most attractive features is its affordable price for end users, with monthly subscription rates varying significantly between countries, ranging from 25 to 100 dollars. However, the hardware costs, ranging from 200 to 650 dollars for the Starlink terminal, equate it with the prices of monthly residential Internet service fees in North America, albeit with higher equipment costs. Despite this, for the Global Majority, these rates remain unaffordable, limiting its accessibility to a small segment of the population.
The uncertainty about whether Starlink’s prices reflect its real costs raises questions. Traditionally, what a company charged for a service included the provider’s costs plus a profit margin. However, the landscape has changed with the influence of venture capital, challenging this logic with the drive for scale and prioritization of future profits. It remains to be seen if Starlink, like companies such as Uber, is strategically reducing prices to gain market share.
In the current situation, Starlink earned revenues of 1.4 billion dollars in 2022. They had projected having 20 million subscribers in 2022, but by September 2023, they had 2 million. Before achieving profitability, Starlink faces a challenging path. It is speculated that the financial survival of Starlink’s business model might depend on a combination of military contracts and government subsidies, a strategy that, while plausible, remains subject to the unpredictability of its owner, Elon Musk. Given Musk’s volatile nature, there’s a possibility that governments might prefer to have full control over military satellite constellations.
In summary, Starlink faces significant challenges in its pursuit of profitability. Its limited focus on rural areas with a comparatively prosperous population excludes urban markets where competitive services already exist. Although it has received permits to operate in several Latin American and African countries, commercial viability in this region is questionable due to limited payment capabilities in rural areas. Despite its theoretical utility for rural Internet service providers, Starlink faces future profitability challenges that may end up raising rates. Although Elon Musk claimed that Starlink reached profitability in November 2023, the reality might be different, as financial sustainability depends on Musk’s ongoing investments.
The history of previous initiatives in Silicon Valley, like Alphabet’s Project Loon, highlights the fragility of claims of financial sustainability. Although Loon and similar projects were projected to generate revenues of 4 billion dollars in 10 years, Alphabet abruptly shut down Project Loon in 2021, serving as a lesson on the risks of technological solutionism.
Additionally, one of the risks found in Project Loon was that algorithms based on artificial intelligence are discovering unexpected tricks to solve problems that astonish their developers, but also generate concerns about our ability to control them. An example of this occurred when an algorithm in a Google helium balloon, designed to travel from Puerto Rico to Peru, unexpectedly learned an ancient navigation technique called “tacking,” which involves zigzagging against the wind to move in the desired direction. Although this creativity can be beneficial, it also poses risks of unpredictability, as AI-controlled systems could make dangerous decisions without prior warning, as in the case of autonomous vehicles or robots.
Is Starlink coming to save the connectivity of excluded people and populations?
The growing preference of economists for strategies that promote prosperous local economies contrasts with the nature of Starlink, which represents the antithesis of this approach. Instead of contributing to local and circular flows of goods and services, Starlink could exacerbate inequalities by benefiting only a wealthy minority in rural communities. Although it provides access to some groups, it also silences those who might advocate for the expansion of broadband infrastructure for the entire community, as it focuses attention and resources on individual, paid solutions.
The impact of Starlink goes beyond simply celebrating individualism and has significant implications for inequality. The first proposal of economist Tony Atkinson highlights the importance of directing technological change in a way that benefits working people and highlights the human dimension of services. Starlink, by focusing on an Internet connection without creating local value, does not meet this approach. Its “plug-and-play” terminals eliminate installation jobs and lack local repair possibilities, in contrast to technologies like fiber optics, which generate a complementary ecosystem of local industries. Starlink, on the other hand, is described as an extractive technology that reflects technological colonialism at its peak.
At first glance, it seems interesting; however, the Starlink terminal is a black box. There are absolutely no parts that the user can repair, so there is no local repair industry. The internet should not be a black box. Internet technologies should be user-friendly but also offer the possibility to open the lid and understand how they work. They should fit into a complementary ecosystem of access technologies and feed the development of skills and the complementary economy.
Starlink in Paraguay
In October 2023, CONATEL granted a license to Starlink. It is the eighth country in Latin America to do so, alongside Brazil, Chile, Peru, Ecuador, Colombia, Panama, and Guatemala. The initiative was supported by the Ministry of Information and Communication Technologies (MITIC). This state portfolio highlighted the importance of broadband satellite internet access in Paraguay and received the first equipment in November. According to its official page, it is expected that this initiative, with the government’s backing and the license granted to Starlink, will contribute to economic growth, attract investments, and improve the quality of life of citizens in various areas such as education, health, and economic development. For MITIC, this initiative represents a significant step towards a more connected and digitally integrated Paraguay.
Regarding the price in Paraguay, Víctor Martínez, the Technical Cabinet Chief of Conatel, indicated that initially, users will have to pay approximately 500 USD for the necessary equipment to access the network, followed by a monthly payment of around 52 USD for the connection. He also pointed out that, due to the higher cost of Starlink’s satellite internet service compared to other options like fiber optics, it is likely that in urban areas, people will continue to opt for more economical alternatives. He emphasized that the most important thing is that the foreign company will provide connection to the most isolated areas of the country.
“Currently, a 150 Mbps service costs about 120,000 to 130,000 Paraguayan guaraníes in urban areas. Therefore, the cost of Starlink, which is 52 USD, is practically double, which likely makes it not the best alternative for customers in urban areas. However, when transferring this to areas without service, the alternatives are much more expensive than the prices offered by Starlink,” the engineer told ABC Color.
Despite the legitimate and significant demand for internet access in Paraguay, especially in rural areas, TEDIC has raised questions about the implementation of this technology. They are particularly focused on the socio-environmental and territorial impacts, addressing crucial issues such as economic concentration, autonomy and security of local communities, as well as social, cultural, political, and informational transformations among service users.
Among the concerns raised is the need to consider digital inclusion, without neglecting the monitoring of digital literacy. There are also questions about the existence or absence of legislation that addresses the risks arising from the implementation of the satellite system, as well as the security and privacy of data traffic and personal data. These aspects are fundamental to ensure an effective and ethical deployment of internet technology, safeguarding the interests and rights of the entire Paraguayan population.
Requests for public information access and some questions
As a first step to know the details of the license and the technology providers representing Starlink, TEDIC made a request for public information access to CONATEL and requested the following information:
- Documents of the Licensing Process:
- Documentation related to the applications, proposals, and communications between Starlink and the regulatory authorities during the license application process.
- Minutes of the meetings, correspondence, and other documents related to the deliberations on granting the license to Starlink.
- Final Agreement:
- Full text of the final licensing agreement or contract granted to Starlink, including all annexes, appendices, and related documents.
- Conditions, restrictions, and obligations imposed on Starlink within the framework of the licensing agreement.
- Details on the use of universal service funds as part of the negotiated agreement package for Starlink’s landing in Paraguay, if any.
- Involved Representatives:
- Names and positions of the government representatives and Starlink who participated in the negotiations and decision-making related to the granting of the license.
- Documentation on STARLINK Paraguay SRL (deed, legal representatives, and sworn statements)
- Financial Terms:
- Details on tariffs, fees, and other financial aspects anticipated in the licensing agreement with Starlink.
- Technology and Connectivity Commitments:
- Information about any commitment or agreement regarding the incorporation of Starlink’s technology in the framework of connectivity actions to be developed in Paraguay in the coming months.
- Plans and projects related to the use of Starlink’s technology to improve connectivity in rural and isolated communities, particularly in the areas of health, education, and security.
- List of rural areas to be prioritized within the framework of the Starlink connectivity project.
Under the responsibility of providing public information, CONATEL shared two opinions as can be seen in the consultation link 76036. However, what is noteworthy is that they assumed that there was no mention of connectivity, gaps, or universal funds. TEDIC requested reconsideration, but CONATEL disagreed with the opinion of its legal department and has indicated that they will only provide it through a judicial order. Although the public information access law is mandatory for CONATEL, a non-compliance is evidenced by not providing the requested information, which highlights the need to address this matter through the appropriate channels to ensure transparency and access to information. As a next step, TEDIC will take legal action.
Summary
The retail mega constellations of low Earth orbit (LEO) satellites are at risk of being neither viable nor desirable. Their need for thousands of satellites implies significant costs and doubts about the sustainability of retail markets for this service. Moreover, these constellations could exclude most countries, focusing on the wealthiest and discouraging governments from providing generalized broadband solutions in remote areas. There are also concerns about economic asymmetry, as these mega constellations extract value without contributing to local economies. The regulation of space is also addressed, pointing out the need to return to a shared internationalization approach, instead of allowing individuals like Elon Musk to establish de facto rules by occupying space territory.
The technology, focusing on an Internet connection without generating local value or benefits to workers and the human dimension of services. The closed nature of Starlink terminals, although initially convenient, limits local employment opportunities and the possibility of repairs, unlike technologies like fiber optics, which promote a complementary local ecosystem.
It is also observed that connectivity costs continue to be prohibitive for people in rural areas, distancing the possibility of an accessible connection for all people. In Paraguay, the costs are still high, and there is no evidence of state financial backing for the company to provide services to vulnerable groups in these areas.
Additionally, TEDIC raises other concerns such as the socio-environmental and territorial impacts of this technology. Concerns highlighted include economic concentration, local autonomy, social transformations, and the need for legislation to address risks and protect the security and privacy of data in the satellite system.
In this line, TEDIC sought detailed information from CONATEL about the licensing process, the final agreement, the involved representatives, the financial terms, and the technological commitments. Despite receiving partial responses, CONATEL later refused to provide more information, indicating that they would only do so through a judicial request. Faced with this refusal, TEDIC is considering legal actions to ensure access to information.