SpaceX vs. China: The Quest for Satellite Internet | WSJ

– [Announcer] Three, two, one, zero. Ignition. (rocket booming) – [Narrator] SpaceX is ramping up the pace of rocket launches in order to conquer the internet from space. The company has launched more than 1,000 satellites to build a network called Starlink aimed at bringing faster connections to billions of people. Meanwhile, China has launched only a few test satellites. (rocket booming) But the country has sent what it calls the world’s first 6G satellite, which it says would provide faster service than what’s available on Earth. – Satellite internet is really seen to be and extension of a lot of the terrestrial internet services. – [Narrator] The satellite internet market is expected to be worth more than $400 billion by 2040. – The world seems to have an insatiable appetite for bandwidth. – [Narrator] And this competition is taking place in an area known as Low Earth Orbit. – It’s first come, first serve. So they are racing to occupy those orbital slots because the ones that get there first with the capability of presence is going to be able to set the rules. – [Narrator] And that comes with privacy and security concerns. Still, SpaceX is moving ahead with the larger fleet of satellites, while the relative newcomer China is betting on faster speeds to build a powerful internet network in space. (dramatic music) Satellite-based internet is actually not new. Since the mid-1990s, people who lived in remote areas and don’t have access to cell towers have relied on satellites. These satellites are in orbit about 22,000 miles away from Earth, and a result of that distance is slow speed. Because China’s satellites and the Starlink network are closer to Earth, that means they can provide much faster services. SpaceX is currently promising its beta test customers in the US speeds between 50 and 150 megabits per second. That’s still below the country’s average broadband service on the ground. China has not rolled out its service yet or demonstrated how its satellite works but the university that developed the 6G satellite says it could offer speeds that can potentially reach at least terabyte per second. (speaking foreign language) – [Narrator] That means if you download a one-gigabyte movie with Starlink’s service, it would take about 10 seconds. But with the 6G speed that China promises, you could download about 1,000 movies in just 1 second. (speaking in foreign language) – [Narrator] China says it’s 6G plan is an extension of its 5G network, which has already been rolled out in many Chinese cities. This technological progression is starting to help transform the country’s economy. (speaking in foreign language) – If you have 6G, your ability to have automation is going to improve exponentially. We mean better manufacturing. We mean better 3D printing. We mean better self-driving cars. – [Narrator] Namrata Goswami is an independent researcher who’s been studying global space policy for more than 20 years. And she says China’s 6G satellite network can make a big impact once it’s up and running. – Once you become the first country to do it, you set the global standards, you set the rules in terms of how this is going to be regulated. Those who are first there will be able to standardize the procedures of that particular market. And then you also set the innovation cycle in technology. – [Narrator] But SpaceX has an edge over China in another way. – [Announcer] And liftoff. (rocket whooshing) – SpaceX has a big advantage of having been the first mover. – [Narrator] Therese Jones is a senior policy director at the Satellite Industry Association. And she’s been studying satellite communication of seven years. The Washington, D.C. based group represents over 50 satellite companies in the US, including SpaceX. – The number is absolutely a comparative advantage right now. It takes a long time to ramp up the capabilities to even get 1,500 satellites on orbit. And just ramp up your satellite manufacturing capabilities to reach that point. – [Narrator] That’s because SpaceX runs its own supply chain to produce the satellites and handles everything else from launching to operating them. It’s taken the company three years to plot a constellation of more than 1,000 satellites, planning to eventually deploy a total of 12,000. – SpaceX has the goal of providing ubiquitous connectivity across the globe, whether that is providing internet to rural areas, whether it’s providing internet to ships, to planes. – [Narrator] And that global plan could help more than three billion people in the world who don’t have regular access to the internet. – So the hardest-to-server customers. – [Narrator] After an installation cost of about $600, the monthly fee to use Starlink’s satellites would be about $100. SpaceX says it’s already received 500,000 pre-orders for its service. And the company’s plans for expansion could get a boost from the US government as it recently won preliminary rights to nearly $900 million in subsidies. – [Announcer] Six, five. – [Narrator] But SpaceX’s bids for funds and it prolific launches have started to draw criticism from rivals in the US and Europe who say Starlink’s satellites are crowding orbit and endangering other satellites. So some are asking regulators to clamp down on the SpaceX project. The company didn’t respond to a request for comment. China could also face similar pushback from rivals since it also plans to launch more than 10,000 satellites but this mega plan has one strong ally. (people clapping) – The one advantage that the country has is that it has one party. So the support is very much consistent. It’s very clear, China’s goal under President Xi has been to become a leader in innovation and technology and especially communications technology. – [Narrator] But big networks of satellites also generate a lot of personal data. – There are these concerns that your data can be turned over, it could be used for espionage, intelligence operations. It could be used to have economic advantage because you can also spy into their economic system. – [Narrator] For example, US officials have long said Beijing could direct Chinese telecom companies like Huawei, which have set up 5G networks abroad to spy or sabotage. Huawei and the Chinese government have rejected the charges but Goswami says China’s 6G network could open up similar concerns. – Chinese law makes it mandatory for any company or citizen to collaborate with Chinese intelligence in case such a request is made. – [Narrator] But in the US, the legal system could provide a level of protection. – SpaceX cannot turn over data just because US intelligence will want it. You will have to go to court to get permission. – [Narrator] SpaceX didn’t respond to a request for comment. While China’s Foreign Ministry said that Chinese law protects data security and personal information of citizens and organizations. (rocket booming) For now, SpaceX is moving ahead by seeking permission for another 30,000 satellites but China’s network could have one more advantage when it’s ready. – [Namrata] China can always make it mandatory for its citizen to have that kind of service in its devices. – [Narrator] Making the world’s most populated country a place to continue testing the service and honing the technology. (lively music)

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