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

“As China further advances its ambitions for its own LEO broadband network, the US could lose its competitive advantage.”

WASHINGTON – In the global race to deploy broadband constellations in low Earth orbit, the United States has a major advantage. However, the US government should “enact policies and incentives to keep US companies competitive internationally,” particularly vis-à-vis China, he says a new report published on December 14 from the Center for Strategic and International Studies.

The study, funded by satellite broadband companies Amazon Kuiper and SpaceX, argues that economic and regulatory issues are putting competitive pressures on US industry.

“Since China continues fAside from its ambitions for its own LEO broadband network, which may fall somewhere in the gray area between commercial and government entities, the United States could lose its competitive advantage,” the report said.

China is building LEO systems for its own use, but also plans to offer services to countries in Asia, South America and Africa that currently lack widespread internet infrastructure and where US companies are also competing for business, the study adds. China uses its Belt and Road Initiative to increase market share for its LEO constellations.

“US leaders should aim to strengthen soft power around the world by partnering with commercial companies that can successfully operate broadband Internet constellations,” the report said. “Given China’s strong economic presence in many Belt and Road partner countries, it is able to negotiate regulatory concessions for its national LEO system while preventing the launch of US commercial services.”

Due to the huge start-up costs of building and deploying a working LEO constellation – estimated at $5 billion to $10 billion – US companies need more agile regulatory practices to compete internationally, the report says.

“Regulators responsible for space and space-related activities are struggling to keep up with the growth of the private sector in managing these constellations, a task that is becoming correspondingly more difficult,” says the report. There is a need for “updated regulation and increased capacity for the regulatory review process”.

The regulatory process is significant for SpaceX’s Starlink and Amazon’s Project Kuiper.

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

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

SpaceX has applied to the Federal Communications Commission (FCC) for approval for an additional 30,000 satellites and has received approval for 7,500 to date.

China applied to the International Telecommunication Union (ITU) to operate a fleet of 12,992 satellites in LEO. The state-funded SatNet plans to set up a space center for the production of satellites and reusable launch vehicles, the CSIS report said. “SatNet is intended to be a crucial part of China’s political goal to be a world leader in advanced technology.”

The OneWeb, Amazon, Telesat and China SatNet constellations combined could potentially put over 90,000 satellites into Earth orbit.

FCC commissioner supports study results

Speaking at CSIS discussing the study, FCC Commissioner Brendan Carr said, “This latest generation of low-Earth orbiting satellites is absolutely groundbreaking.”

He said US industry must remain competitive. “There is no technology sector where we, as Americans, should cede leadership to the Chinese Communist Party. The CCP aims to dominate many technology sectors, but one of them is this low-Earth orbiting satellite system.”

In the US government, he added, “we need to give our private sector the tools to compete and win.”

For the FCC, this means “ensuring that we have the spectrum available and that we are not introducing new services that could cause harmful interference with these technologies.” Above all, we have to get faster.”

Carr said the FCC plans to set up a space office “to speed things up.” Congress also enters. He expressed his support a House Energy and Commerce Committee bipartisan bill introduced on December 8th to reform the FCC’s satellite licensing rules.

“Basically, we need to accelerate our approvals at the FCC,” he said. The agency also needs to address concerns that US companies would have to disclose competitive secrets sooner than if they were licensed in other countries.

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

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