The Government Absolutely Should Not Subsidize Elon Musk’s Satellite-Internet Venture

Claire Park wrote for Slate Future Tense about Starlink, the new satellite internet venture from Elon Musk and SpaceX, and why the nascent program should not receive federal dollars to provide low-cost internet service to low-income households when there are faster, cheaper, proven technologies already available.

To start, the service remains in its infancy, with little data on its performance or financial solvency. While beta testers and Starlink fans have shared information about their personal experiences with the service, the company itself has yet to release any data about service locations, speeds, or its reliability. But we do know that beta-testers have experienced regular outages anywhere from eight minutes to 90 minutes that remain unexplained. There’s also the question of whether the company can remain in business. SpaceX’s president shared this summer that the company currently loses money on consumer side equipment, and while noting that costs of producing satellite equipment are projected to go down, she didn’t specify whether cheaper production costs would also mean savings for the end user...

Still, the company is now arguing that it should receive federal funding as an affordable internet service provider with Lifeline, a federal program to help low-income households afford telecommunications service. Again, Starlink’s beta service costs $99 a month, plus an upfront cost of $499 for the user terminal/satellite dish, mounting tripod, and router. These service costs are actually comparable to those charged by incumbent satellite providers who advertised much slower service in rural areas, and in some ways an improvement, as Starlink does not currently cap or penalize data usage. But the current Lifeline support is $9.25 a month, less than one- tenth of the monthly cost of Starlink. Even with the subsidy, it’s unlikely that people living at or below 135 percent of the poverty line will be able to pay the upfront cost of a satellite dish, let alone afford $89 a month for internet service.