As we enter the year end holiday season we’re hearing from Canadians across the country that all they want for the holidays is a Starlink beta invitation. While more invitations are coming in the new year, users should understand there’s a reason why it’s called the “Better Than Nothing Beta.” Also, it’s not just consumers interested in Starlink, Members of Parliament on the Standing Committee on Industry, Science and Technology (INDU) recently held a meeting on access and affordability with SpaceX and Telesat.
The cost and early adopters
While many consumers are clamouring for beta invitations, and shrugging their shoulders at the cost of the equipment and monthly service, the reality is for many Canadians the price point to get the service is still too expensive. This was discussed at some length at the INDU meeting.
So what is the cost? At the moment the SpaceX Starlink service will cost you $649 for “the kit” and $129 a month for the service. This does not include taxes. So your first bill, depending on which tax jurisdiction you’re in will be as high as $879.14 ($649 equipment + $129 service +HST). This price does not include any additional equipment you might buy from Starlink or additional equipment you might need. That’s a hefty bill for most consumers.
Representing SpaceX at the INDU meeting was Patricia Cooper, Vice President of Satellite Government Affairs. In responding to a question from Earl Dreeshan (Conservative/Red Deer – Mountain View) on the topic of pricing going forward, Cooper replied in part, “the first point I want to make is in terms of the equipment for which a customer needs to pay the one-time, upfront cost. We think we have a really clear path to driving that equipment price down. It’s one of the hardest problems in these LEO systems, specifically those that go directly to consumers. You want to have tens of thousands of them at a low per-unit cost. We definitely have a path for that, again, both because of economies of scale and some future design developments. “
It’s important to remember here that Starlink is selling the equipment kit at a loss, a significant loss at the moment. The “economies of scale” will have to bear fruit if Starlink wants to stave off bankruptcy.
Cooper further stated, “I do want to mention two quick things on cost. Obviously the expense of deploying the network is one important element. We are a privately held company. We aren’t publicly traded. I want to clarify from Dan’s comments about the $18-billion spectrum clearance in the U.S. That doesn’t affect us. We aren’t a previous operator of satellites. We don’t operate and don’t have any services in the frequency bands that have been cleared. I wanted to make sure that was evident. One of the other big advantages we have is that it costs a certain amount of money to deploy a satellite, and because we have not only our own launch services available, we also have the advantage of the innovation of launch reusability. We’re flying our satellites on rockets that have been used two, three, four, five times, which is unheard of in the deployment of commercial satellites. Coupled with the innovations in the satellite design, this all brings a more affordable deployment of the space architecture at the same time that we’re driving down very hard on the equipment price past this early adopter first beta test.”
There’s two important take-aways from this statement. The first is that no company has ever launched a satellite constellation where they owned the launch service as well. You simply can’t ignore that. Couple that with the fact that SpaceX is the only launch service provider to reuse a portion of its rocket. The Falcon 9 first stage includes 9 engines. As each month passes SpaceX is reusing those first stages multiple times.
The other takeaway is that current Starlink users are early adopters. They have the funds, and importantly the desire to get the service, regardless of the cost. Not everyone is in that boat.
Beta issues, and hey, what about Québec?
We need to remember that Starlink in a name the beta “Better Than Nothing Beta.” That means users should expect issues. And that is happening. Most of the issues have centred around satellite coverage though, there have been some issues with snow and heating the dish. Part of the coverage issue has to do with Starlink not having any gateways in Canada yet. Currently SpaceX is limited to using US gateways that overlap across the border.
The movie below shows the path of Starlink satellites (speeded up) over Canada today. As you can see coverage is still sparse and illustrates why the beta test is limited to latitudes between 45.1°N to 51.1°N.
Sébastien Lemire (Bloc Québécois/Abitibi—Témiscamingue) asked Cooper why Québec was excluded from the beta test. She responded by saying “the stage at which we offer the public beta in Québec is now determined more by whether the tests, all the supporting documentation and install kits are stable enough that we want to translate them into French. Right now we are providing services that are in flux with getting the feedback from our customers to try to make sure that the service is as good as it can be, and we’re refining information that would be available to the consumer. Certainly we plan to offer services in Quebec. We expect the service to be able to technically cover all the territory. We have not started our public beta in Quebec at this point.” It seems from this statement that language is the only issue.
Starlink beta in 2021
There’s a lot of hype surrounding Starlink. That hype is going to continue well into 2021. The expansion of the beta testing in Canada is eagerly anticipated by early adopters who currently don’t have access to the service. For them, all they want this holiday is a beta invitation. They, along with anyone in rural and remote communities without broadband internet access are going to have to wait. And that wait could be the better part of 2021 for widespread access. In the meantime we have a lot more coverage planned on this topic in the new year.
Statement by Patricia Cooper, Vice President of Satellite Government Affairs to the INDU Committee (Nov. 17, 2020)
Chairwoman Romanado, Vice-Chairmen Cumming and Lemire and members of the committee, thank you for the opportunity to appear before the Standing Committee on Industry, Science and Technology today on behalf of SpaceX and our Starlink broadband system. The committee’s hearing on accessibility and affordability of telecommunications services is timely and critically important.
As this committee is well aware, COVID-19 has brought into high relief the urgent need for universal, affordable high-speed broadband access. Even before the pandemic, though, Canada’s connectivity strategy noted that “rural and remote communities have identified challenges accessing affordable, high-speed Internet as the number one issue impeding their economic growth.”
With Starlink recently authorized by ISED to offer services throughout Canada, SpaceX looks forward to helping to close the digital divide in Canada, particularly in remote and rural areas that most suffer from broadband gaps.
By way of background, SpaceX today is the world’s largest launch services provider measured by missions under contract. We design, manufacture and launch our reusable Falcon launch vehicles and spacecraft for missions to earth orbit and ultimately beyond.
In this endeavour, SpaceX has had a long and productive partnership with Canada and Canadian industry. In June of last year, for example, SpaceX successfully lofted into orbit three RCM satellites built by MDA for the Canadian Space Agency’s RADARSAT constellation. In 2018, as Dan noted, SpaceX, over the course of two separate missions, launched Telesat’s Telstar 19 Vantage and 18 Vantage telecommunications satellites.
Perhaps most notably, in March 2019, Canadian astronaut David Saint-Jacques became the first person to enter the Crew Dragon spacecraft while attached to the International Space Station, an important marker on the path to Crew-1, the first operational crew mission to the ISS that SpaceX successfully launched this past Sunday for our partner NASA and last night docked.
Given this history, SpaceX is proud to be embarking on another journey with Canada with Starlink, our next-generation space-based Internet system that will deliver high-speed broadband to locations where access has been unreliable, expensive or completely unavailable. SpaceX wishes to thank Minister Bains, Minister Monsef, the professional staff at ISED’s spectrum planning and engineering office, the CRTC, Global Affairs Canada, Natural Resources Canada and many others, including members of this committee, for working with us throughout the regulatory process.
We are putting our Canadian approvals to good use. Within a week of receiving our licences, SpaceX began shipping Starlink kits into Canada for our early customers, including indigenous communities, and we are starting our public beta rollout for Canadians as we speak.
Canadians are increasingly relying on the Internet. Statistics Canada shows that the share of Canadians age 15 and older using the Internet rose from 83% in 2012 to 91% in 2018. As consumer demands on speed and capacity continue to grow, however, disparities in access and competitive choice persist for many communities. Indeed, 60% of rural Canadian households lack access to broadband, defined as 50 megabits per second down and 10 megabits per second up.
As a result, the Canadian government has established a bold and historic commitment: to connect 98% of Canadians across the country to high-speed Internet within the next six years and all Canadians by 2030.
Importantly, the government focused its initiatives on several key areas, including rapid deployment to address broadband gaps during the pandemic; diversity in technology pathways, recognizing that no single solution will suffice to support all Canadians; scalability, to ensure networks can grow as demand and uses of the Internet change over time; affordability; and, network quality and resiliency, particularly in the rugged environments in the north.
SpaceX strongly supports these goals, and I therefore want to direct the remainder of my statement to discussing how Starlink aligns with them.
As an initial matter, Starlink is a technology ideally suited for Canada. The constellation of Starlink satellites flying close to the earth will reach across Canada’s vast territory, whether small rural communities, rugged mountains or craggy coastlines, where the cost to deploy more traditional solutions often inhibits a return on investment and consequently defers infrastructure build-out.
Even in its current beta phase, Starlink exceeds Canada’s requirements of 50/10 megabits per second per user. Our early beta testing in the United States is demonstrating speeds of over 100 megabits per second to individual households, with latencies of less than 40 milliseconds.
Even in remote locations Canadians will have access to broadband with the performance necessary for remote learning, teleworking, telehealth, video conferencing and even competitive gaming.
With nearly 900 Starlink satellites already in orbit, Starlink is able to provide service to large portions of Canada now, including parts of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Atlantic Canada.
As we continue to launch satellites and with future regulatory approvals in Canada, Starlink will reach even higher latitudes in the other provinces and even in the north. Because Starlink consumer equipment involves a plug-and-play device, deployment speeds become a matter of shipping timelines. Therefore, Starlink certainly is rapidly deployable.
SpaceX is well known for continually iterating and improving our technology. For the Starlink system this means incremental innovation in both our satellites in space and the consumer equipment on the ground. This iterative approach to system design allows us to inject feedback and both improve performance and expand available capacity on an ongoing basis.
The feedback from our early beta testing in the U.S. and Canada will allow us to fine-tune the Starlink service offerings over time, and with the ongoing addition of more satellites, the system can scale as market demand grows and can adjust to the ever-evolving use of the Internet.
Since our first deployment 18 months ago, SpaceX has established a regular cadence of two Starlink launches, totalling 120 satellites per month, and set a record last month alone of deploying 180 Starlink satellites.
Finally, affordability is a key factor for SpaceX since Starlink is fundamentally optimized as a direct consumer service. SpaceX is designing the system from end to end with cost effectiveness and reliability in mind. As our services grow and we transition from low- to high-volume production, we remain focused on further lowering the cost.
Madam Chair and members of the committee, thank you again for the opportunity to participate in this hearing. We’re poised to offer reliable high-speed Starlink broadband to Canadians across the country.
I look forward to answering any questions you might have.
Thank you.