He said fixed fiber optic cable is still the better option for most people at home because of cost and reliability, but off the beaten track, Starlink could be the cheaper option or the only fast option for the foreseeable future, he said.
“I wouldn’t be surprised if there were 1 million homes that Starlink would be a good solution for, and there could be more,” he said, not including non-US homes or non-residential customers.
Starlink avoids the need for fixed fiber optic infrastructure by using satellites to deliver wireless internet. While not the first company to offer such a service, it has quickly become one of the industry leaders, with around 3,000 satellites currently in orbit and plans for a total of up to 12,000. It has also received praise for its work in providing internet services to Ukrainians during its ongoing effort to repel a Russian invasion.
Starlink had its challenges. The company suffered a setback last month when federal regulators scrapped a plan to pour nearly $900 million into the service.
Schools with money to spend were a bright spot. In southwest Virginia, about 400 homes with 640 students spread across multiple counties use Starlink through their local school systems, according to the Appalachian Council for Innovation, a local group that supports the technology industry and education.
They typically did not previously have, or could not afford, reliable access to broadband internet, and the coronavirus pandemic underscored the need.
“We needed a solution that would serve and serve the students now. We didn’t have time to wait for the terrestrial fiber to be laid,” said Scott Kiser, director of school technology for Wise County, Virginia.
The Virginia state government contributed $500,000 to offset the cost. Local counties also contributed, but it’s not clear how long the state or counties will continue to do so.
“As it stands now, the grant purchased equipment and a two-year subscription, so it’s about a year before that expires,” said Donald Purdie, president of the Appalachian Council for Innovation.
After that, either each resident is responsible for their own monthly dues to Starlink, or local officials will find another source of funding. “There is no answer at this point,” he said.
There is hope that while Starlink is a stopgap solution, it will continue to expand its fixed-line broadband infrastructure with $42 billion in new investments. In the most optimistic scenario, rural internet customers, including school districts, will finally be given more ways to spend their broadband money, be it on satellite internet or fiber optic cable.
“Who has the better mousetrap?” said Purdie. “The market will determine that.”
Amazon’s Kuiper internet service is a potential competitor to Starlink. It has announced that it will launch its first satellites by the end of this year.
Starlink’s entry into rural school districts across the country has received little attention. The company has mentioned it in passing in online videos, and local news outlets have reported on individual projects.
Bianca Reinhardt, a Starlink sales executive, told NBC News in an interview that school districts and counties have been a priority for the service since the start of the Covid-19 pandemic.
“Schools were actually closed, so having the internet at home became a necessity to actually be able to attend school,” Reinhardt said. “So we’re very focused on working with school districts to keep students connected at home.”
Some school districts, she said, have no other way to get their students’ homes connected to the Internet than to use state funds for Starlink.
Musk, the richest person in the world according to Bloomberg News, has received government subsidies and contracts for some of his other companies, including Tesla and SpaceX’s rocket business.
While Starlink is still in its infancy, it has made strides in two years. It began in 2020 with a public test themed “better than nothing” and was released more widely last year, although the company is still working to launch satellites, not all areas of the planet have access.
The company said in May it had more than 400,000 subscribers worldwide, and some investors believe the Starlink service could eventually make SpaceX more money than its rocket business.
The sea and the air seem to be next. Royal Caribbean Cruises announced Tuesday it would offer Starlink Internet onboard all of its cruise ships, with installation due to be completed early next year. Hawaiian Airlines has announced plans to offer free Internet through Starlink as early as next year. The company also has a $1.9 million contract with the US Air Force to support bases in Europe and Africa.
“For satellite Internet, you have to bring together a number of niche markets to make it a paid service,” said Harold Feld, senior vice president at Public Knowledge, a Washington advocacy group that is pushing for broadband deployment and subsidies.
“For SpaceX, especially at this stage, the fact that they can pursue a number of these hard-to-serve markets is a huge advantage for their technology,” he added.
On the other hand, Feld said he’s concerned about Starlink’s long-term commitment to rural school districts.
“It’s all well and good for these guys to serve airlines, cruise lines and RVs, but they’ve received a lot of regulatory favors to serve rural America and that should remain their core business,” he said.
The first school district to use Starlink was the Ector County Independent School District in West Texas, where in 2020 the philanthropic arms of local oil and gas companies paid to bring the service to students’ homes. Now 130 families use it, Superintendent Scott Muri said, and a nearby county in Pecos has followed suit.
Muri said the school district is unsure if local industry will foot the bill indefinitely and is looking to other sources of funding, including the Federal Communications Commission.
“We have hope that our state and federal governments will work to make this available to families who don’t have the resources,” he said.
The FCC was the agency that last month stopped a Trump-era plan to give SpaceX $886 million to expand Starlink in 35 states. The commission cited data showing upload speeds had dropped on Starlink.
“We cannot afford to subsidize companies that are not delivering the speeds promised or are unlikely to meet program requirements,” FCC Chairwoman Jessica Rosenworcel said in a statement at the time.
At least some Starlink users are happy with the speeds, especially when compared to other options – and as long as the price is competitive.
“It changed our lives,” said Brandon Honaker, a community college teacher who got Starlink in October 2021 with two children at the school in rural Tazewell County, Virginia.
“If fiber would come and expand in our area, I would consider switching to fiber depending on the price,” he said, “but honestly, Starlink does everything we need it to do.”
David Ingram reported from San Francisco. Kailani Koenig and Cal Perry reported from Cuba, New Mexico and Hawthorne, California.