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

[Crist Clark <cjc+nanog () pumpky net>]

There are probably a few more than 100 000 ocean going ships in the world.
There are maybe 60 000 airliners. They may be able to charge more per unit,
maybe several times more, but it’s still orders of magnitude below the size
of the consumer market.

It’s not like satellite Internet is a new thing. It’s not even like LEO
satellite is a new thing. Iridium and Globalstar been doing it for over two
decades. Yeah, the service sucked, but part of that is because the markets
never materialized to justify funding to improve it.


On Sat, Jun 17, 2023 at 5:16 PM Dave Taht <dave.taht () gmail com> wrote:

> On Sat, Jun 17, 2023 at 5:41 PM Tom Beecher <beecher () beecher cc> 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.
> > 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.
>
> No it does not. Reduced density in any area makes for a compelling
> market for starlink. The buildout cost is fixed (cover the globe with
> sats), once the globe is covered, taking advantage of any area under
> that is straightforward. It is quite unlike wires in this case, or
> even FWA, there is no power to towers, no need for power or cable
> anything but a downlink site located somewhere within a few hundred
> miles.
>
> We are also seeing rural 5G FWA expand rapidly, in part because the
> gear costs the same no matter how many people are on it.
>
> > 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.
>
> Agreed.
>
> > 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.
>
> I think we are arguing the difference between 10m people and 30m? 10m
> people is quite a substantial business, barely cracking the ranks of
> the larger ISPS, and yet ~$1B/month. Hard to complain...
>
> I would have liked it if starlink´s business service included BGP
> peering, and other classic aspects of the internet that it does not
> have as yet.
>
> > 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
>
>
> --
> Podcast:
> https://www.linkedin.com/feed/update/urn:li:activity:7058793910227111937/
> Dave Täht CSO, LibreQos