SpaceX's effort is just one of many new communications innovations, which include 5G data and more efficient use of our airwaves, that could boost competition in your local broadband market in the coming years. If it pays off, the result may be faster Internet speeds, better service and lower prices.
Along with SpaceX, about a dozen such companies are exploring the idea. Although satellite Internet isn't new, the companies are promising a new generation of satellites that orbit much closer to Earth than traditional data satellites and can send and receive signals in a fraction of the time. The idea is to blanket the world in wireless broadband, effectively adding a new Internet provider in areas with only one or two services.
The same goal is driving Microsoft's initiative to transmit Internet signals over unused TV airwaves. The company has said it hopes to bring 2 million rural Americans online by 2022. Since July, Microsoft has launched seven pilot projects in areas such as Georgia, Kansas, Maine, Virginia and Washington state.
Meanwhile, AT&T announced this week that it would start rolling out 5G — a next-generation alternative to 4G mobile data — in three metropolitan areas: Dallas, Waco, Tex.; and Atlanta. Designed for cellular devices that haven't hit the market yet, AT&T's 5G capability hints at a future of incredibly fast speeds and low lag for mobile service, an ideal combination that could support self-driving cars, smart appliances and other gadgets in the Internet of Things. Verizon has plans to make 5G a viable substitute for home broadband for as many as 30 million households, and smaller carriers have looked into the idea, as well.
This potpourri of new technologies could bolster competition in various ways, according to Michael Calabrese, director of the Wireless Future Project at the New America Foundation. For example, imagine if your local telephone company could set up a wireless 5G hotspot in your neighborhood rather than digging into the ground to lay expensive Internet cables to each house. As the 5G might be just as good (if not better) than what the cable company offers, customers might benefit from more providers fighting for their loyalty.
“For competition, it’s particularly good,” said Calabrese, “because it’ll allow these guys to overbuild — in other words, to become a competitive provider at relatively low capital cost.”
Cable companies have already begun to anticipate this possibility. That's why you're seeing companies such as Comcast launching their own cellphone services; they know that as Americans increasingly turn to mobile devices, the cable industry will be fighting with wireless carriers over broadband subscriptions.
Satellite broadband aspires to compete against both cable and telecom companies by dropping in from space. If it works, consumers could see an entirely new sector spring up to challenge large incumbents like AT&T and Comcast — something we haven't seen since the emergence of cable itself.
Still, there's a lot that satellite broadband companies need to figure out. For example, while the technology makes sense for rural areas where customers have a clear view of the sky, customers in urban areas could be harder to serve because of all the buildings that tend to get in the way of the signal, said Roger Entner, an industry analyst at Recon Analytics.
Then there's the question of how many customers the satellite Internet can realistically support, experts say. “If too many people sign up,” Entner said, “because it’s a shared resource, it might run out of capacity.”
Entner said companies could solve this by putting more satellites in orbit. But then the skies could become cluttered with space junk, which may pose risks to other spacecraft.