Elon Musk’s Satellite Internet Project Is Too Risky, Rivals Say
In a rush to claim orbital real-estate, competitors ask regulators to clamp down on SpaceX’s Starlink project
5 min
Elon Musk’s internet satellite venture has spawned an unlikely alliance of competitors, regulators and experts who say the billionaire is building a near-monopoly that is threatening space safety and the environment.
The Starlink project, owned by Mr. Musk’s Space Exploration Technologies Corp. or SpaceX, is authorized to send some 12,000 satellites into orbit to beam superfast internet to every corner of the Earth. It has sought permission for another 30,000.
Now, rival companies such as Viasat Inc., OneWeb Global Ltd., Hughes Network Systems and Boeing Co. are challenging Starlink’s space race in front of regulators in the U.S. and Europe. Some complain that Mr. Musk’s satellites are blocking their own devices’ signals and have physically endangered their fleets.
Mr. Musk’s endeavor is still in beta testing but it has already disrupted the industry, and even spurred the European Union to develop a rival space-based internet project to be unveiled by the end of the year.
The critics’ main argument is that Mr. Musk’s launch-first, upgrade-later principle, which made his Tesla Inc. electric car company a pioneer, gives priority to speed over quality, filling Earth’s already crowded orbit with satellites that may need fixing after they launch.
“SpaceX has a gung-ho approach to space,” said Chris McLaughlin, government affairs chief for rival OneWeb. “Every one of our satellites is like a Ford Focus—it does the same thing, it gets tested, it works—while Starlink satellites are like Teslas: They launch them and then they have to upgrade and fix them, or even replace them altogether,” Mr. McLaughlin said.
SpaceX didn’t respond to requests for comment.
Around 5% of the first batch of Starlink satellites failed, SpaceX said in 2019. They were left to gradually fall back to earth and vaporize in the process. In November 2020, astrophysicist Jonathan McDowell of the Harvard-Smithsonian Center for Astrophysics calculated that the Starlink failure rate was nearly 3%. Mr. McDowell said Starlink has vastly improved the design of their satellites since then, and that the failure rate is currently below 1%, and on track to improve further.
Even with the constant improvement, Mr. McDowell said, Starlink will operate so many satellites that even a low failure rate would mean a relatively high threat to orbital safety because of the potential for collisions. “They clearly have been making continuous improvements…but it’s a challenging thing they are doing and it’s not clear that they will be able to manage the final constellation,” he said.
Starlink operates more than 1,300 spacecraft in Earth’s lower orbit and is adding some 120 more every month. Its fleet is now on track to top the total number of satellites that have been launched since the 1950s—around 9,000.
Orbital space is finite, and the current lack of universal regulation means companies can place satellites on a first-come, first-served basis. And Mr. Musk is on track to stake a claim for most of the free orbital real estate, largely because, unlike competitors, he owns his own rockets.
In the coming days, the Federal Communications Commission in the U.S. is set to approve a request by SpaceX to modify its license and allow a greater number of satellites to orbit at a lower altitude of around 550 kilometres (a kilometre is 0.625 mile). If approved, competitor satellites would have to navigate around SpaceX’s fleet to place their own spacecraft.
Other companies operating in space have asked the FCC to impose conditions on SpaceX, including lowering its fleet’s failure rate to 1 in 1,000, and improving collision-avoidance capabilities while ensuring they don’t block the transmissions of other craft orbiting above them.
“You should have fewer satellites and make them more capable,” Mark Dankberg, Viasat founder and executive chairman, said.
On Twitter, Mr. Musk commented on Mr. Dankberg’s earlier warnings that his company posed a hazard to orbital traffic by tweeting: “Starlink ‘poses a hazard’ to Viasat’s profits, more like it.”
A spokesman for Boeing, which is also challenging Starlink at the FCC, said it is “critically important to the future of a safe and sustainable orbital environment that standards be globally consistent and enable a competitive playing field.”
In the region of space where Starlink operates, satellites orbit the earth at 18,000 miles an hour. Any collision could spread high-velocity debris that could make the orbit unusable for years.
Competitors say Starlink satellites have low maneuverability, meaning that other firms’ craft have to act when collisions threaten.
Starlink satellites have come alarmingly close to other spacecraft twice in the last two years, including on April 2, when a Starlink satellite prompted another operated by OneWeb, controlled by Indian conglomerate Bharti Global and the U.K. government, to make evasive maneuvers, according to OneWeb and the U.S. Space Command.
Mr. Musk’s satellites are equipped with an AI-powered, automated collision avoidance system. Yet that system had to be switched off when a Starlink satellite came within 190 feet of the rival’s satellite this month, according to OneWeb’s Mr. McLaughlin.
When contacted by OneWeb, Starlink’s engineers said they couldn’t do anything to avoid a collision and switched off the collision avoidance system so OneWeb could maneuver around the Starlink satellite without interference, according to Mr. McLaughlin.
Starlink hasn’t revealed details about their AI collision avoidance system. Mr. McDowell, the astrophysicist, said it was hard to take any such system seriously when it remains unclear what data it uses to operate.
A similar incident took place in late 2019, when a Starlink satellite was on a near-collision course with an EU weather satellite, according to the European Space Agency, which runs EU satellites. The agency said it was only able to contact Starlink via email and the company told it they would take no action, so EU engineers had to initiate a collision avoidance maneuver.
SpaceX didn’t reply to requests for comment about the two incidents
Lower earth orbit is getting crowded with broadband satellite constellations: Amazon.com Inc.’s Project Kuiper aims to put out 3,200 satellites, Britain’s OneWeb about 700 and Telesat of Canada around 300. Russia and China are working on their own, potentially massive, constellations.
An EU official said that owning a constellation that can beam broadband internet to Earth is a strategic priority for the bloc. It is expected to publish a road map for a public-private partnership to create a broadband satellite fleet worth around €6 billion, equivalent to $7.19 billion, by the end of the year.
Space-safety experts say the number of projects means more regulation is needed to avoid potential catastrophes.
“It’s a race to the bottom in terms of getting as much stuff up there as possible to claim orbital real estate,” said Moriba Jah, associate professor at the Department of Aerospace Engineering and Engineering Mechanics at the University of Texas at Austin. “Musk is just doing what’s legal…but legal is not necessarily safe or sustainable.”
Nevertheless, most governments welcome the onset of satellite-beamed broadband as a cheaper and faster alternative to building broadband networks. In Germany, Europe’s biggest economy, the leading telecom provider Deutsche Telekom recently signalled a willingness to join with Starlink.
“I’m a great admirer of Elon Musk and his ideas,” Deutsche Telekom Chief Executive Timotheus Höttges said in January.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: April 19, 2021
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Food prices continue to rise at a rapid pace, surprising central banks and pressuring debt-laden governments
4 min
LONDON—Fresh out of an energy crisis, Europeans are facing a food-price explosion that is changing diets and forcing consumers across the region to tighten their belts—literally.
This is happening even though inflation as a whole is falling thanks to lower energy prices, presenting a new policy challenge for governments that deployed billions in aid last year to keep businesses and households afloat through the worst energy crisis in decades.
New data on Wednesday showed inflation in the U.K. fell sharply in April as energy prices cooled, following a similar pattern around Europe and in the U.S. But food prices were 19.3% higher than a year earlier.
The continued surge in food prices has caught central bankers off guard and pressured governments that are still reeling from the cost of last year’s emergency support to come to the rescue. And it is pressuring household budgets that are also under strain from rising borrowing costs.
In France, households have cut their food purchases by more than 10% since the invasion of Ukraine, while their purchases of energy have fallen by 4.8%.
In Germany, sales of food fell 1.1% in March from the previous month, and were down 10.3% from a year earlier, the largest drop since records began in 1994. According to the Federal Information Centre for Agriculture, meat consumption was lower in 2022 than at any time since records began in 1989, although it said that might partly reflect a continuing shift toward more plant-based diets.
Food retailers’ profit margins have contracted because they can’t pass on the entire price increases from their suppliers to their customers. Markus Mosa, chief executive of the Edeka supermarket chain, told German media that the company had stopped ordering products from several large suppliers because of rocketing prices.
A survey by the U.K.’s statistics agency earlier this month found that almost three-fifths of the poorest 20% of households were cutting back on food purchases.
“This is an access problem,” said Ludovic Subran, chief economist at insurer Allianz, who previously worked at the United Nations World Food Program. “Total food production has not plummeted. This is an entitlement crisis.”
Food accounts for a much larger share of consumer spending than energy, so a smaller rise in prices has a greater impact on budgets. The U.K.’s Resolution Foundation estimates that by the summer, the cumulative rise in food bills since 2020 will have amounted to 28 billion pounds, equivalent to $34.76 billion, outstripping the rise in energy bills, estimated at £25 billion.
“The cost of living crisis isn’t ending, it is just entering a new phase,” Torsten Bell, the research group’s chief executive, wrote in a recent report.
Food isn’t the only driver of inflation. In the U.K., the core rate of inflation—which excludes food and energy—rose to 6.8% in April from 6.2% in March, its highest level since 1992. Core inflation was close to its record high in the eurozone during the same month.
Still, Bank of England Gov. Andrew Bailey told lawmakers Tuesday that food prices now constitute a “fourth shock” to inflation after the bottlenecks that jammed supply chains during the Covid-19 pandemic, the rise in energy prices that accompanied Russia’s invasion of Ukraine, and surprisingly tight labor markets.
Europe’s governments spent heavily on supporting households as energy prices soared. Now they have less room to borrow given the surge in debt since the pandemic struck in 2020.
Some governments—including those of Italy, Spain and Portugal—have cut sales taxes on food products to ease the burden on consumers. Others are leaning on food retailers to keep their prices in check. In March, the French government negotiated an agreement with leading retailers to refrain from price rises if it is possible to do so.
Retailers have also come under scrutiny in Ireland and a number of other European countries. In the U.K., lawmakers have launched an investigation into the entire food supply chain “from farm to fork.”
“Yesterday I had the food producers into Downing Street, and we’ve also been talking to the supermarkets, to the farmers, looking at every element of the supply chain and what we can do to pass on some of the reduction in costs that are coming through to consumers as fast as possible,” U.K. Treasury Chief Jeremy Hunt said during The Wall Street Journal’s CEO Council Summit in London.
The government’s Competition and Markets Authority last week said it would take a closer look at retailers.
“Given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well,” said Sarah Cardell, who heads the CMA.
Some economists expect that added scrutiny to yield concrete results, assuming retailers won’t want to tarnish their image and will lean on their suppliers to keep prices down.
“With supermarkets now more heavily under the political spotlight, we think it more likely that price momentum in the food basket slows,” said Sanjay Raja, an economist at Deutsche Bank.
It isn’t entirely clear why food prices have risen so fast for so long. In world commodity markets, which set the prices received by farmers, food prices have been falling since April 2022. But raw commodity costs are just one part of the final price. Consumers are also paying for processing, packaging, transport and distribution, and the size of the gap between the farm and the dining table is unusually wide.
The BOE’s Bailey thinks one reason for the bank having misjudged food prices is that food producers entered into longer-term but relatively expensive contracts with fertilizer, energy and other suppliers around the time of Russia’s invasion of Ukraine in their eagerness to guarantee availability at a time of uncertainty.
But as the pressures being placed on retailers suggest, some policy makers suspect that an increase in profit margins may also have played a role. Speaking to lawmakers, Bailey was wary of placing any blame on food suppliers.
“It’s a story about rebuilding margins that were squeezed in the early part of last year,” he said.
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