Re: FCC Chair Rosenworcel Proposes to Investigate Impact of Data Caps

[Tom Beecher <beecher () beecher cc>]

> You are also assuming their only product is Home Internet. Providing
> Internet to ships at sea, planes in the sky and other more unconventional
> uses will provide a lot more revenue than the home Internet will.

I am not assuming that at all.

There is absolutely a market for sat internet. It's just not a $30B revenue
a year business as Musk has said.

On land , why do wireline providers not build out into rural areas? There
is not enough subscriber density to recover buildout costs in an acceptable
timeframe.  Starlink has the same problem ; the number of possible
subscribers is exceptionally low relative to the buildout cost. There won't
ever be high demand for Starlink in urban areas because it's not needed,
and performance is bad when users are clustered like that.

Again, I agree there is a market for sat internet. It's just never going to
be anywhere close to as large as what is claimed.

On Sat, Jun 17, 2023 at 7:25 PM <sronan () ronan-online com> wrote:

> You are also assuming their only product is Home Internet. Providing
> Internet to ships at sea, planes in the sky and other more unconventional
> uses will provide a lot more revenue than the home Internet will.
>
>
>
> On Jun 17, 2023, at 7:04 PM, Tom Beecher <beecher () beecher cc> wrote:
>
> 
>
> > You’re assuming the launches are costing them something, which in fact
> > may not be true. Rumor has it, they are piggybacking on other payloads
> > which pay for the launches, particularly government contracts.
>
> Assuming they are, they aren't doing enough of those launches to piggyback
> enough sats to reach the 40k claim.
>
> Zero out the launch costs, subscriber revenue still doesn't doesn't come
> close to touching the sat costs.
>
>
> On Sat, Jun 17, 2023 at 6:27 PM <sronan () ronan-online com> wrote:
>
> > You’re assuming the launches are costing them something, which in fact
> > may not be true. Rumor has it, they are piggybacking on other payloads
> > which pay for the launches, particularly government contracts.
> >
> >
> >
> >
> > On Jun 17, 2023, at 5:54 PM, Tom Beecher <beecher () beecher cc> wrote:
> >
> > 
> >
> > > As I mentioned elsewhere, I'm not sure that the current economics are
> > > the real economics. I'm pretty sure they've been purposefully throttling
> > > demand because they still don't have the capacity so it would make sense to
> > > overcharge in the mean time. Is there something inherent in their cpe that
> > > makes them much more expensive than, say, satellite tv dishes? I can see
> > > marginally more because of the LEO aspect, but isn't that mainly just
> > > software? It wouldn't surprise me that the main cost is the truck roll.
> > - Starlink currently reports around 1.5M subscribers. At $110 a month,
> > that's $165M in revenue,
> >
> > - A Falcon 9 launch is billed out at $67M. A Falcon 9 can carry up to 60
> > Starlink sats. That's ~667 launches to reach the stated goal of 40k sats in
> > the constellation. So roughly $45B in just launch costs, if you assume the
> > public launch price. (Because if they are launching their own stuff, they
> > aren't launching an external paying customer.)
> > - The reported price per sat is $250k.
> >
> > Assuming they give themselves a friendly internal discount, the orbital
> > buildout cost are in the neighborhood of $30B for launches, and $10B for
> > sats.
> >
> > - The satellite failure rate is stated to be ~ 3% annually. On a 40K
> > cluster, that's 1200 a year.
> >
> > That's about 20 more launches a year, and $300M for replacement sats.
> > Let's round off and say that's $1B a year there.
> >
> >  So far, that's a $40B buildout with a $1B annual run rate. And that's
> > just the orbital costs. We haven't even calculated the manufacturing costs
> > of the receiver dishes, terrestrial network infra cost , opex from staff ,
> > R&D, etc .
> >
> > Numbers kinda speak for themselves here.
> >
> > I mean, I get that Musk is sort of a cuckoo bird but say what you will he
> > > does have big ambitions.
> >
> > Ambition is good. But reality tends to win the day. As does math.
> >
> >
> >
> >
> >
> > On Sat, Jun 17, 2023 at 4:38 PM Michael Thomas <mike () mtcc com> wrote:
> >
> > > On 6/17/23 1:25 PM, Tom Beecher wrote:
> > >
> > > Won't Starlink and other LEO configurations be that backstop sooner
> > > > rather than later?
> > >
> > > Unlikely. They will remain niche. The economics don't make sense for
> > > those services to completely replace terrestrial only service.
> > >
> > > Why would they put up 40000 satellites if their ambition is only niche?
> > > I mean, I get that Musk is sort of a cuckoo bird but say what you will he
> > > does have big ambitions.
> > >
> > > From my standpoint, they don't have to completely replace the
> > > incumbents. I'd be perfectly happy just keeping them honest.
> > >
> > > As I mentioned elsewhere, I'm not sure that the current economics are
> > > the real economics. I'm pretty sure they've been purposefully throttling
> > > demand because they still don't have the capacity so it would make sense to
> > > overcharge in the mean time. Is there something inherent in their cpe that
> > > makes them much more expensive than, say, satellite tv dishes? I can see
> > > marginally more because of the LEO aspect, but isn't that mainly just
> > > software? It wouldn't surprise me that the main cost is the truck roll.
> > >
> > > Mike
> > >
> > >
> > >
> > > On Fri, Jun 16, 2023 at 4:17 PM Michael Thomas <mike () mtcc com> wrote:
> > >
> > > > On 6/16/23 1:09 PM, Mark Tinka wrote:
> > > > > On 6/16/23 21:19, Josh Luthman wrote:
> > > > > > Mark,
> > > > > >
> > > > > > In my world I constantly see people with 0 fixed internet options.
> > > > > > Many of these locations do not even have mobile coverage.
> > > > > > Competition is fine in town, but for millions of people in the US
> > > > > > (and I'm going to assume it's worse or comparable in CA/MX) there is
> > > > > > no service.
> > > > > >
> > > > > > As a company primarily delivering to residents, competition is not a
> > > > > > focus for us and for the urban market it's tough to survive on a
> > > > ~1/3
> > > > > > take rate.
> > > > >
> > > > > I should have been clearer... the lack of competition in many markets
> > > > > is not unique to North America. I'd say all of the world suffers
> > > > that,
> > > > > since there is only so much money and resources to go around.
> > > > >
> > > > > What I was trying to say is that should a town or village have the
> > > > > opportunity to receive competition, where existing services are
> > > > > capped, uncapping that via an alternative provider would be low
> > > > > hanging fruit to gain local marketshare. Of course, the alternative
> > > > > provider would need to show up first, but that's a whole other thread.
> > > > Won't Starlink and other LEO configurations be that backstop sooner
> > > > rather than later? I don't know if they have caps as well, but even if
> > > > they do they could compete with their caps.
> > > >
> > > > Mike