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Bad." List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Sun, 10 Apr 2022 13:55:55 -0000 --------------KBnoIPVkXKV0weuhJd4wy1h4 Content-Type: text/plain; charset="utf-8"; format=flowed Content-Transfer-Encoding: quoted-printable Starlink's sustainability is an interesting question for us to debate, but = normally uninteresting to the Canadian Radio and Television Commission. The fact that they have raised th= eir prices forces the CRTC to address it, and may give us some hints. What is more interesting to me is seeing Northwestel on the radar again. Fr= iends (hey, Jim!) have encountered them in the past, as part of the Canadia= n "duopoly" that keeps internet prices high and software cheap, ancient, an= d bloated. A little competition over quality could be a very good thing for= single- and two-supplier regions of the Canadian North and the US West. --dave On 4/8/22 17:45, David Lang wrote: outside major cities, starlink costs and bandwidth are attractive compared = to existing options (and frequently cheaper, even including the initial cos= t over a year or so) your claim that launching additional satellites will not increase bandwith = is directly coutnered by Starlink's desire to launch additional satellites. As a private company, we don't know their finances, but we've seen enough t= o know their profit margin on launches is quite high, so it's not a given t= hat they are borrowing billions of dollars. I don't see premium chaning things much, it's 5x the price, but also 5x the= bandwidth, just in one easy-to-use dish vs configuring load balancing acro= ss 5 dishes. So it looks like a wash to me. 0.1 clients by sq km seems like an incredibly low density. I haven't seen t= hat paper, so I can't argue with it's assumptions directly. I think the number of people who can afford the $100 (or if not individuals= , then communities sharing a dish) is much higher than you are estimateing.= As you say there are not a lot of other options. I agree that the current level of service/pricing is touch-and-go for starl= ink, but with cheaper launches (Starship) and more satellites (and the sate= llite lasers to reduce the need to have a ground station near you) I've seen people talking about revenue on the order of $30B/year as a possi= bility, and while I think they are probably optomistic, $10B/year on $30B i= n additional investment is a fairly short payback period. David Lang On Fri, 8 Apr 2022, Daniel AJ Sokolov wrote: Date: Fri, 08 Apr 2022 23:04:04 +0200 From: Daniel AJ Sokolov To: David Lang Cc: starlink@lists.bufferbloat.net Subject: Re: [Starlink] SpaceX ordered to explain pricing strategy To be clear, I am focusing on the consumer product, not the Premium product= , which is not available yet. Mr. Musk himself said last year that he will have to invest an additional U= SD 20-30 billion to make Starlink survive. After all, he has to build groun= d stations and launch some 23,000 satellites by the end of the decade to me= et his FCC license obligations (not counting any satellites lost to unplann= ed events, such as a solar flare, warfare, or rocket loss). If you can finance at 5% (which is optimistic), debt of 10 billion costs yo= u 500 million a year. At the same time, the number of clients paying USD99 is limited. The system= has limited bandwidth. As the IEEE paper shows, users can expect 25 Mbit/s= IF there are no more than 0.1 clients per square kilometre, and IF only 5%= of these clients actually use the bandwidth - given a complement of 5040 o= perational satellites. Currently, 1421 satellites are operational (accordin= g to starlink.sx). The global landmass is about 134 million square kilometres, including all u= ninhabited areas except Antarctica. The number of humans who can afford USD= 100 a month is limited (and don't forget the initial investment, the cost = of Dishy's significant power draw, and taxes). Those who are willing to pay= all that AND be happy with, say, 30 Mbit/s, is even smaller. And the addit= ional bandwidth per satellite added diminishes as the network grows. You ca= n't double the bandwidth by doubling the satellites, because the available = spectrum and the spectral efficiency are given. At the moment, Starlink revenue is at a runrate of about 25 million dollars= a month. A terribly negative cashflow. Yes, there is additional demand, bu= t, like everyone else, Starlink suffers from chip shortages, so they can't = make as many terminals as they would like to. And some of the demand they c= an't fulfill without massively oversubscribing. If there are, say, 10,000 N= ew York City residents on the waiting list, Starlink can't serve them. In the given setup, churn will be high. When a client moves, there is no gu= arantee they can keep their Starlink account. When a taller building goes u= p next door, the connection my be interrupted for good, etc. Having clients scattered over dozens of countries comes with massive overhe= ad in the legal department. Starlink is just being kicked out of France bec= ause their radio license is invalid. I believe they can fight their way bac= k in, but still. This costs time and money. Multiply this with dozens of co= untries with different legal regulatory regimes, consumer protection laws, = tax and filtering/surveillance requirements, etc. At 99 dollars is not enough - which is why Starlink had to raise the price.= And unless they have tremenduous success with Premium subscriptions, or la= rger business accounts, they will have to raise prices again. The good news for Starlink is: They have a captive audience, who has signif= icant sunk cost and often little alternative. So Starlink will be able to r= aise prices. BR Daniel AJ On April 8, 2022 8:15:44 p.m. GMT+02:00, David Lang wrote: Why are you so sure that Starlink's current prices are unsustainable? That's an assertion that requires prove, not just assumed. David Lang On Fri, 8 Apr 2022, Daniel AJ Sokolov wrote: Date: Fri, 8 Apr 2022 01:59:21 -0700 From: Daniel AJ Sokolov To: starlink@lists.bufferbloat.net Subject: [Starlink] SpaceX ordered to explain pricing strategy Hello, the Canadian regulatory authority CRTC has ordered SpaceX to reveal how its Starlink prices "may change within the next two years". However, SpaceX will likely file this under seal, meaning it will not become public information. Technically, the order only refers to prices charged in the Far North of Canada (The Yukon, the Northwest Territories, Nunavut, Northern British-Columbia and one community in Alberta). But as long as Starlink's prices are global, this geographical restriction in the order is meaningless. The order is part of CRTC proceeding 8646-N1-202108175, and SpaceX' answer is due today, April 8. Docket at https://services.crtc.gc.ca/pub/instances-proceedings/Default-Defaut.aspx?S= =3DC&PA=3DT&PT=3DPT1&PST=3DA (incomplete due to various 404 errors) The order to SpaceX has came about after I filed a procedural request in this proceeding. Here is the background: In most of Canada's Far North, a company named Northwestel has a monopoly on landline internet. Also, Northwestel owns the backbone to large parts of the area. Northwestel is actually Bell Canada, but with much higher rates. It's only been a bit over year that Northerners can even buy unlimited internet access, and it is not cheap. (Northwestel also has a resale agreement with OneWeb.) In some areas, one small competitor is trying to hold on: SSi Micro. They and a few others would want to buy wholesale data transfer from Northwestel at regulated prices, so they can mount some competition. Because Northwestel has a monopoly, they are not allowed to sell internet access below cost, and they have to obtain permission from the CRTC to change rates. Rates must be "just and reasonable" under the law, for whatever that means. The CRTC proceedings to permit rate changes are unreasonably slow - a real problem for Northwestel. However, Northwestel would also love to sell below cost, so they can extinguish the little competition they have, and make sure no new investor even thinks about entering the market. Northwestel runs a very profitable cable TV operation, and they charge business users more than double the residential rate for internet access - so they have plenty of revenue to cross-subsidize internet, if they would be allowed to do so. In January, Northwestel applied to the CRTC for permission to change this regime. Explicitly, Northwestel wants to be allowed to sell residential internet access below cost (cross subsidized from cable TV), and to reduce rates or increase data allowances or increase bandwidth at any time without another CRTC proceeding. This, Northwestel argues, is necessary, otherwise Starlink will eat Northwestel's lunch. Because Starlink is awesome and cheaper. Such permission, of course, would be great for consumers in the shortrun and awful in the long run. Because it would kill competition. Most participants in the consultation to Northwestel's application fail to understand that. They are jubilant for potentially lower internet rates. In my filing in February, I asked the CRTC to deny Northwestel's application. It is bad policy in the long run. Also, Northwestel has many options to fight against the (perceived) competitive threat from Starlink. Currently, the cheapest unlimited use access is a 100 MBit/s down and 12.5 MBit/s up line. They offer plans with less bandwidth, but all of those have a usage cap. And overages are crazy expensive. It's a topsy-turvy world, where the rich users with fat pipes, who can put huge stress on the network, get a free-for-all, whereas less affluent users with thin pipes get charged extra per GByte. In addition, I argued that Starlink does not have the capacity to be a real competitor to Northwestel's fat pipes - unless one takes the Premium version. Now Starlink Premium is geared at businesses and govs, for which Northwestel does NOT ask for permission to lower rates. Plus other arguments. If you are so inclined, you can find my submission in the aforementioned docket under "Interventions". There, I also pointed out that Starlink's current price point is unsustainable, and that they will have to raise prices. Low and behold, while everyone was waiting for the CRTC's decision on Northwestel's application, Starlink increased prices. So I filed a procedural request to obtain permission to add that information to the docket (after the official deadline to add Interventions do the docket). The CRTC has granted my request, added Starlink's price increase to the docket, and has ordered SpaceX to explain their pricing plans for the next two years by today. Other parties will have until April 18 to comment on SpaceX' submission - which may be difficult, because I expect all interesting bits to be filed under seal. Cheers Daniel _______________________________________________ Starlink mailing list Starlink@lists.bufferbloat.net https://lists.bufferbloat.net/listinfo/starlink _______________________________________________ Starlink mailing list Starlink@lists.bufferbloat.net https://lists.bufferbloat.net/listinfo/starlink -- David Collier-Brown, | Always do right. This will gratify System Programmer and Author | some people and astonish the rest dave.collier-brown@indexexchange.com | -- Mark Twain CONFIDENTIALITY NOTICE AND DISCLAIMER : This telecommunication, including a= ny and all attachments, contains confidential information intended only for= the person(s) to whom it is addressed. Any dissemination, distribution, co= pying or disclosure is strictly prohibited and is not a waiver of confident= iality. If you have received this telecommunication in error, please notify= the sender immediately by return electronic mail and delete the message fr= om your inbox and deleted items folders. This telecommunication does not co= nstitute an express or implied agreement to conduct transactions by electro= nic means, nor does it constitute a contract offer, a contract amendment or= an acceptance of a contract offer. Contract terms contained in this teleco= mmunication are subject to legal review and the completion of formal docume= ntation and are not binding until same is confirmed in writing and has been= signed by an authorized signatory. --------------KBnoIPVkXKV0weuhJd4wy1h4 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable

Starlink's sustainability is an interesting question for us to debate, but normally uninteresting to the
Canadian Radio and Television Commission. The fact that they have raised th= eir prices forces the CRTC to address it, and may give us some hints.

What is more interesting to me is seeing Northwestel on the radar again.= Friends (hey, Jim!) have encountered them in the past, as part of the Cana= dian "duopoly" that keeps internet prices high and software cheap= , ancient, and bloated. A little competition over quality could be a very good thin= g for single- and two-supplier regions of the Canadian North and the US Wes= t.

--dave

On 4/8/22 17:45, David Lang wrote:
outside major cities, starlink costs and bandwidth are attractive co= mpared to existing options (and frequently cheaper, even including the init= ial cost over a year or so)

your claim that launching additional satellites will not increase bandwith = is directly coutnered by Starlink's desire to launch additional satellites.

As a private company, we don't know their finances, but we've seen enough t= o know their profit margin on launches is quite high, so it's not a given t= hat they are borrowing billions of dollars.

I don't see premium chaning things much, it's 5x the price, but also 5x the= bandwidth, just in one easy-to-use dish vs configuring load balancing acro= ss 5 dishes. So it looks like a wash to me.

0.1 clients by sq km seems like an incredibly low density. I haven't seen t= hat paper, so I can't argue with it's assumptions directly.

I think the number of people who can afford the $100 (or if not individuals= , then communities sharing a dish) is much higher than you are estimateing.= As you say there are not a lot of other options.

I agree that the current level of service/pricing is touch-and-go for starl= ink, but with cheaper launches (Starship) and more satellites (and the sate= llite lasers to reduce the need to have a ground station near you)

I've seen people talking about revenue on the order of $30B/year as a possi= bility, and while I think they are probably optomistic, $10B/year on $30B i= n additional investment is a fairly short payback period.

David Lang


On Fri, 8 Apr 2022, Daniel AJ Sokolov wrote:

Date: Fri, 08 Apr 2022 23:04:04 +0200
From: Daniel AJ Sokolov <daniel@falco.ca>
To: David Lang <david@lang.hm>
Cc: starlink@lists.bufferbloat.net
Subject: Re: [Starlink] SpaceX ordered to explain pricing strategy

To be clear, I am focusing on the consumer product, not the Premium product= , which is not available yet.

Mr. Musk himself said last year that he will have to invest an additional U= SD 20-30 billion to make Starlink survive. After all, he has to build groun= d stations and launch some 23,000 satellites by the end of the decade to me= et his FCC license obligations (not counting any satellites lost to unplanned events, such as a solar flare, w= arfare, or rocket loss).

If you can finance at 5% (which is optimistic), debt of 10 billion costs yo= u 500 million a year.

At the same time, the number of clients paying USD99 is limited. The system= has limited bandwidth. As the IEEE paper shows, users can expect 25 Mbit/s= IF there are no more than 0.1 clients per square kilometre, and IF only 5%= of these clients actually use the bandwidth - given a complement of 5040 operational satellites. Currently, = 1421 satellites are operational (according to starlink.sx).

The global landmass is about 134 million square kilometres, including all u= ninhabited areas except Antarctica. The number of humans who can afford USD= 100 a month is limited (and don't forget the initial investment, the cost = of Dishy's significant power draw, and taxes). Those who are willing to pay all that AND be happy with, say, = 30 Mbit/s, is even smaller. And the additional bandwidth per satellite adde= d diminishes as the network grows. You can't double the bandwidth by doubli= ng the satellites, because the available spectrum and the spectral efficiency are given.

At the moment, Starlink revenue is at a runrate of about 25 million dollars= a month. A terribly negative cashflow. Yes, there is additional demand, bu= t, like everyone else, Starlink suffers from chip shortages, so they can't = make as many terminals as they would like to. And some of the demand they can't fulfill without massively overs= ubscribing. If there are, say, 10,000 New York City residents on the waitin= g list, Starlink can't serve them.

In the given setup, churn will be high. When a client moves, there is no gu= arantee they can keep their Starlink account. When a taller building goes u= p next door, the connection my be interrupted for good, etc.

Having clients scattered over dozens of countries comes with massive overhe= ad in the legal department. Starlink is just being kicked out of France bec= ause their radio license is invalid. I believe they can fight their way bac= k in, but still. This costs time and money. Multiply this with dozens of countries with different legal reg= ulatory regimes, consumer protection laws, tax and filtering/surveillance r= equirements, etc.

At 99 dollars is not enough - which is why Starlink had to raise the price.= And unless they have tremenduous success with Premium subscriptions, or la= rger business accounts, they will have to raise prices again.

The good news for Starlink is: They have a captive audience, who has signif= icant sunk cost and often little alternative. So Starlink will be able to r= aise prices.

BR
Daniel AJ



On April 8, 2022 8:15:44 p.m. GMT+02:00, David Lang <david@lang.hm> wrote:
Why are you so sure that Starlink's current price= s are unsustainable?

That's an assertion that requires prove, not just assumed.

David Lang

On Fri, 8 Apr 2022, Daniel AJ Sokolov wrote:

Date: Fri, 8 Apr 2022 01:59:21 -0700
From: Daniel AJ Sokolov <daniel@falco.ca>
To: starlink@lists.bufferbloat.net
Subject: [Starlink] SpaceX ordered to explain pricing strategy

Hello,

the Canadian regulatory authority CRTC has ordered SpaceX to reveal how its Starlink prices "may change within the next two years".

However, SpaceX will likely file this under seal, meaning it will not
become public information.

Technically, the order only refers to prices charged in the Far North of Canada (The Yukon, the Northwest Territories, Nunavut, Northern
British-Columbia and one community in Alberta). But as long as
Starlink's prices are global, this geographical restriction in the order is meaningless.

The order is part of CRTC proceeding 8646-N1-202108175, and SpaceX'
answer is due today, April 8.
Docket at
https://services.crtc.gc.ca/pub/instances-proceedings/Default-Def= aut.aspx?S=3DC&PA=3DT&PT=3DPT1&PST=3DA
(incomplete due to various 404 errors)

The order to SpaceX has came about after I filed a procedural request in this proceeding.

Here is the background:

In most of Canada's Far North, a company named Northwestel has a
monopoly on landline internet. Also, Northwestel owns the backbone to
large parts of the area. Northwestel is actually Bell Canada, but with
much higher rates. It's only been a bit over year that Northerners can
even buy unlimited internet access, and it is not cheap. (Northwestel
also has a resale agreement with OneWeb.)

In some areas, one small competitor is trying to hold on: SSi Micro.

They and a few others would want to buy wholesale data transfer from
Northwestel at regulated prices, so they can mount some competition.

Because Northwestel has a monopoly, they are not allowed to sell
internet access below cost, and they have to obtain permission from the CRTC to change rates. Rates must be "just and reasonable" under t= he law,
for whatever that means. The CRTC proceedings to permit rate changes are unreasonably slow - a real problem for Northwestel.

However, Northwestel would also love to sell below cost, so they can
extinguish the little competition they have, and make sure no new
investor even thinks about entering the market. Northwestel runs a very profitable cable TV operation, and they charge business users more than double the residential rate for internet access - so they have plenty of revenue to cross-subsidize internet, if they would be allowed to do so.
In January, Northwestel applied to the CRTC for permission to change
this regime. Explicitly, Northwestel wants to be allowed to sell
residential internet access below cost (cross subsidized from cable TV), and to reduce rates or increase data allowances or increase bandwidth at any time without another CRTC proceeding.

This, Northwestel argues, is necessary, otherwise Starlink will eat
Northwestel's lunch. Because Starlink is awesome and cheaper.

Such permission, of course, would be great for consumers in the shortrun and awful in the long run. Because it would kill competition.

Most participants in the consultation to Northwestel's application fail to understand that. They are jubilant for potentially lower internet rates.=

In my filing in February, I asked the CRTC to deny Northwestel's
application. It is bad policy in the long run.

Also, Northwestel has many options to fight against the (perceived)
competitive threat from Starlink. Currently, the cheapest unlimited use access is a 100 MBit/s down and 12.5 MBit/s up line. They offer plans
with less bandwidth, but all of those have a usage cap. And overages are crazy expensive. It's a topsy-turvy world, where the rich users with fat pipes, who can put huge stress on the network, get a free-for-all,
whereas less affluent users with thin pipes get charged extra per GByte.
In addition, I argued that Starlink does not have the capacity to be a
real competitor to Northwestel's fat pipes - unless one takes the
Premium version. Now Starlink Premium is geared at businesses and govs, for which Northwestel does NOT ask for permission to lower rates.

Plus other arguments. If you are so inclined, you can find my submission in the aforementioned docket under "Interventions".

There, I also pointed out that Starlink's current price point is
unsustainable, and that they will have to raise prices.

Low and behold, while everyone was waiting for the CRTC's decision on
Northwestel's application, Starlink increased prices.

So I filed a procedural request to obtain permission to add that
information to the docket (after the official deadline to add
Interventions do the docket).

The CRTC has granted my request, added Starlink's price increase to the docket, and has ordered SpaceX to explain their pricing plans for the
next two years by today. Other parties will have until April 18 to
comment on SpaceX' submission - which may be difficult, because I expect all interesting bits to be filed under seal.

Cheers
Daniel
_______________________________________________
Starlink mailing list
Starlink@lists.bufferbloat.net
https://lists.bufferbloat.net/listinfo/starlink



_______________________________________________
Starlink mailing list
Starlink@lists.bufferbloat.net
https://lists.bufferbloat.net/listinfo/starlink 
--=20
David Collier-Brown,         | Always do right. This will gratify
System Programmer and Author | some people and astonish the rest
dave.collier-brown@indexexchange.com |              -- =
Mark Twain

CONFIDENTIALITY NOTICE AND D= ISCLAIMER : T= his telecommunication, including any and all attachments, contains confiden= tial information intended only for the person(s) to whom it is addressed. Any dissemination, distribution, copying or discl= osure is strictly prohibited and is not a waiver of confidentiality. If you= have received this telecommunication in error, please notify the sender im= mediately by return electronic mail and delete the message from your inbox and deleted items folders. This tel= ecommunication does not constitute an express or implied agreement to condu= ct transactions by electronic means, nor does it constitute a contract offe= r, a contract amendment or an acceptance of a contract offer. Contract terms contained in this telecommunication ar= e subject to legal review and the completion of formal documentation and ar= e not binding until same is confirmed in writing and has been signed by an = authorized signatory.

--------------KBnoIPVkXKV0weuhJd4wy1h4--