From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from mail.lang.hm (unknown [66.167.227.145]) (using TLSv1.2 with cipher ADH-AES256-GCM-SHA384 (256/256 bits)) (No client certificate requested) by lists.bufferbloat.net (Postfix) with ESMTPS id 57C0F3B29D for ; Fri, 8 Apr 2022 14:15:46 -0400 (EDT) Received: from dlang-mobile (unknown [10.2.2.69]) by mail.lang.hm (Postfix) with ESMTP id 7483412A33B; Fri, 8 Apr 2022 11:15:44 -0700 (PDT) Date: Fri, 8 Apr 2022 11:15:44 -0700 (PDT) From: David Lang To: Daniel AJ Sokolov cc: starlink@lists.bufferbloat.net In-Reply-To: Message-ID: References: MIME-Version: 1.0 Content-Type: text/plain; charset=US-ASCII; format=flowed Subject: Re: [Starlink] SpaceX ordered to explain pricing strategy X-BeenThere: starlink@lists.bufferbloat.net X-Mailman-Version: 2.1.20 Precedence: list List-Id: "Starlink has bufferbloat. Bad." List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Fri, 08 Apr 2022 18:15:46 -0000 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=C&PA=T&PT=PT1&PST=A > (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 >