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U.S. space internet companies fear competitive threat from China

‘As China continues to further its ambitions for its own LEO broadband network, the U.S. could lose its competitive edge’
Starlink availability as of December 2022. Credit: SpaceX

WASHINGTON — In the global race to deploy broadband constellations in low Earth orbit, the United States holds a major advantage. However, the U.S. government should “enact policies and incentives to keep U.S. companies competitive internationally” especially against China, says a new report released Dec. 14 by the Center for Strategic and International Studies.

The study, funded by satellite broadband firms Amazon Kuiper and SpaceX, argues that economic and regulatory issues are creating competitive pressures for U.S. industry. 

“As China continues to further its ambitions for its own LEO broadband network, which may fall somewhere in the gray zone between commercial and governmental, the United States could lose its competitive edge,” says the report.

China is building LEO systems for its own use but also plans to provide services across countries in Asia, South America, and Africa that do not currently have widespread internet infrastructure and where U.S. companies also are competing for business, the study adds. China is leveraging its Belt and Road initiative to increase market share for its LEO constellations.

“U.S. leaders should aim to increase soft power across the globe by working with commercial companies that can successfully operate broadband internet constellations,” the report says. “With China’s heavy economic presence in many Belt and Road partner countries, it’s positioned to negotiate regulatory concessions for its national LEO system while discouraging the adoption of U.S. commercial services.”

Because of the huge startup costs of building and deploying a functioning LEO constellation — estimated to range from $5 billion to $10 billion — U.S. companies need more agile regulatory practices so they can compete internationally, the report contends. 

“Regulatory agencies with jurisdiction over space and space-related activities are struggling to keep pace with private sector growth in managing these constellations, a task that is correspondingly growing in difficulty,” says the report. There is a need for “updated regulation and an increase in capacity for the regulatory review process.”

The regulatory process carries huge stakes for SpaceX’s Starlink and for Amazon’s Project Kuiper.

As of November 2022, Starlink has launched over 3,500 satellites and offers coverage in more than 50 markets across North America, South America, Europe, Japan, Australia, and New Zealand

Kuiper plans to launch 1,618 satellites by 2026, and deploy a total of about 3,200. 

SpaceX has requested authorization from the Federal Communications Commission (FCC) for another 30,000 satellites, and received authorization for 7,500 so far. 

China applied to the International Telecommunication Union (ITU) to operate a 12,992-satellite fleet in LEO. The state-funded SatNet plans to establish a space hub for the production of satellites and reusable launch vehicles, the CSIS report says. “SatNet is to be a critical part of China’s political goal of being a leader in advanced technology across the globe.”

The constellations of OneWeb, Amazon, Telesat, and China SatNet together could potentially add over 90,000 satellites into Earth orbit.

FCC commissioner supports study findings

Speaking at CSIS to discuss the study, FCC Commissioner Brendan Carr said “this latest generation of low Earth orbit satellites is absolutely a game changer.”

He said U.S. industry needs to remain competitive. “There’s no technology sector that we as Americans should cede leadership to the Communist Party of China. The CCP has set their goals on dominating a lot of technology sectors, but one of them is this low Earth orbit satellite system.”

In the U.S. government, he added, “we have to give the tools to our private sector to compete and to win.”

For the FCC, that means “making sure that we have the spectrum available, and that we don’t introduce new services that could cause harmful interference to these technologies. Most importantly, we have to go faster.”

Carr said the FCC plans to stand up a space bureau “to help speed things up.” Congress also is stepping in. He expressed support for a House Energy and Commerce Committee bipartisan bill introduced Dec. 8 to reform the FCC’s satellite licensing rules.

“Fundamentally at the FCC we have to go faster on our approvals,” he said. The agency also needs to address concerns about companies in the U.S. having to disclose competitive secrets earlier than if they were licensed in other countries.

“We’re gonna make sure it’s not a competitive disadvantage,” said Carr.

Sandra Erwin writes about military space programs, policy, technology and the industry that supports this sector. She has covered the military, the Pentagon, Congress and the defense industry for nearly...