Welcome to Quartz’s newsletter on the economic possibilities of the extraterrestrial sphere. Please forward widely, and let me know what you think. This week: The Trump FCC’s satellite legacy, Double Dragon, and Starship’s beautiful bellyflop.
The most important player in recent US space policy wasn’t at yesterday’s uneventful National Space Council meeting. The Federal Communications Commission and its outgoing chair, Ajit Pai, aren’t even members, since the FCC is an independent regulatory agency.
But in the last four years under Pai’s leadership, the FCC has dramatically shaped the future of space commerce: Approving tens of thousands of new US satellites, prioritizing the business use of satellite spectrum over interference complaints from the US military, and just this week, awarding $885 million dollars in federal subsidies to SpaceX’s Starlink satellite network.
The last news is a result of the Rural Digital Opportunity Fund, a program designed to subsidize businesses that provide broadband in rural areas. US telecom providers participated in a reverse auction across numerous geographic areas, offering the lowest bids necessary to provide high-speed internet access. SpaceX’s monetary award, for service across 35 states, was the fourth largest to emerge from the auction.
Now, SpaceX will have to prove it can provide competitive service in order to obtain annual payments over the next decade. SpaceX’s media team did not respond to questions or make any statement about winning almost a billion dollars in public support. The timing may have been inconvenient, as the company’s CEO Elon Musk this week called for the government to “get out of the way” of innovators.
In reality, Musk’s work has been backed implicitly or explicitly by the US government, from his days as web 1.0 entrepreneur as the internet was commercialized; to the founding of his electric car company Tesla with the benefit of green tax credits and federal loans; and through the success of SpaceX, which receives billions of dollars from its primary customer, the US government. Musk has been attacked by ideologues for the reliance of his various firms on such support, but high-tech innovation since the dawn of the aviation industry has done so.
When it comes to rural connectivity, the challenge has been getting companies to do the expensive work of running wires in areas that aren’t densely populated, and thus provide less financial return on the investment. That has resulted in poor service in many rural areas, with impact on everything from jobs and education to health.
SpaceX is not in the burying-fiber-optic-cable business. But Starlink, its growing network of satellites in low-earth orbit, is starting to provide high-speed broadband to a group of pilot customers. The network’s business model is focused on less-dense areas because its system operates more efficiently without tall buildings or too many customers in one spot. That logic led SpaceX to bid for this government backing. Some rivals cried foul, noting that the technology and business model behind Starlink is largely unproven. In the end, the FCC disagreed.
“To the extent that there was criticism out there about whether this could be a real broadband alternative for fixed applications, just being able to bid in those categories is a vote of confidence—a bit of a validation that the LEO service that they are planning can offer what the government itself considers to be broadband,” Walter Piecyk, a telecoms analyst at LightShed Partners, told Quartz.
When it comes to Starlink itself, the news may ease questions about whether SpaceX can afford to deploy the capital-intensive network. Some in the telecom industry suspect that the company is losing money on every antennae its customers purchase, and the new funds could help cover those costs. Still, Piecyk, the telecom analyst, says these economics are not a big surprise.
“Motorola used to make $1,200 cell phones,” he says, recalling the early days of mobile. “It’s hard to judge the ability of a company to get the [customer equipment] to a target price based on the current knowledge of how these products are made today. It’s a great validation, but it’s not like these dollars alone is what’s going to drive the success of Starlink.”
The real big picture will come in the years ahead, when experts say the public will be able to see if the Opportunity Fund met its goals. “If this [subsidy program] works, it changes future planning dynamics,” Piecyk told Quartz. The demand for improved internet access continues to rise. Some people, like former FCC chair Tom Wheeler, have argued that the government needs to spend even more, on the order of $80 billion, to expand terrestrial broadband.
If Starlink—and forthcoming networks built by Amazon, OneWeb, and other firms—prove to be effective competitors, it will change the conversation about how the government boosts internet access.
An uncrewed SpaceX Dragon spacecraft arrived at the International Space Station this week with a cargo of scientific experiments and supplies for the crew. This photo shows it approaching, and in the foreground, you can see the crew Dragon spacecraft that brought four astronauts to the space habitat last month.
It’s the first time two SpaceX vehicles have been docked at the ISS, and it provided some of the first “overhead” views of the station since the retirement of the Space Shuttle. It’s a very visible sign of the higher cadence of activity that NASA hopes public-private partnerships will bring to low-earth orbit.
How much do you think sports like baseball, soccer, and football matter for the economy?
- They’re a huge deal for local economies
- They contribute a decent amount
- They hardly matter at all in the grand scheme of things
The correct answer is 3, according to economists, who generally agree that professional teams play a surprisingly small role in the economy of their cities. Sports won’t drive the post-pandemic economic recovery. But they will contribute meaningfully to our personal recovery. Read more in our latest field guide to how sports came back.
R.U.D. The eighth prototype for SpaceX’s next-generation heavy rocket put on a show yesterday in Texas as the company’s engineers put it through a low-altitude flight test to demonstrate the vehicle’s aerodynamic properties. The prototype rose about 12 km into the air, suffering the apparent failure of two of its three engines along the way, before performing a fairly elegant bellyflop, relighting its remaining engine to flip vertically again, and exploding spectacularly on the landing pad. While the rapid unexpected disassembly of the vehicle might give observers pause, its performance suggests SpaceX has learned a great deal. Even rival Jeff Bezos was impressed. And, as many commented on Twitter, few images capture SpaceX’s aesthetic as much as this one of the smoldering wreckage:
Two great tastes. A quiet launch start-up called Aevum went public this week with a design for a combo drone-rocket launcher. The vehicle is designed to carry a satellite to high altitudes and launch it into space. The vehicle would be used to launch small satellites on-demand, a long-sought after goal by the US military and private firms. Virgin Orbit is currently developing an air-launched rocket that it plans to debut with a test on Dec. 19, but the company relies on a modified airliner. A smaller vehicle and no pilot promise cost reductions, but will also demand more sophisticated software. Next up for Aevum is proving their drone is airworthy before they start in on sending payloads to orbit.
Galactic federation update. No, not that one. The Commercial Spaceflight Federation, a trade group of aerospace firms defined by their private funding and preference for fixed-price contracts, has a new leader in Karina Drees. (Former president Eric Stallmer has taken a new job at Voyager Space Holdings.) Drees is the former CEO of the Mojave Air and Space Port and a CSF board member. Among her goals in the year ahead is expanding the group’s membership and pushing public-private partnerships as a solution for the Biden administration’s space challenges. “With climate change a top priority, commercial companies, [particularly in] remote sensing, have undergone a significant transformation that can really contribute a lot,” she told Quartz.
Congrats! Women in Aerospace has announced its 2020 awards, recognizing the accomplishments of five leaders including Kathy Lueders, the top executive at NASA’s human space exploration program, and Lori Garver, the former NASA deputy administrator who has been an important advocate for women in the sector.
This was issue 77 of our newsletter. Hope your week is out of this world! Please send your thoughts on the role of satellites in the future of telecommunications, metaphors for Starship’s glorious bellyflop, tips, and informed opinions to firstname.lastname@example.org.