Is satellite broadband a reliable method of closing the digital divide? If you were to consult the BEAD program’s rules, the answer would be no. But Donald Trump’s second term could flip that equation if the new administration determines fiber is no longer the preferred technology.
Elon Musk, who owns satellite broadband service Starlink, was just appointed by Trump to lead a new “Department of Government Efficiency” in his second administration. And Musk has a strong incentive to push for changes to BEAD policy, as New Street Research’s Blair Levin has said.
The capacity conundrum
A common critique of satellite broadband is its inherent bandwidth limitations. Starlink as of September had over 6,000 low earth orbit (LEO) satellites in operation. It’s not clear how many more satellites would be required to connect locations via BEAD.
Arun Menon, lead analyst at MTN Consulting, told Fierce that even if more LEO satellites are deployed to increase bandwidth capacity, that can lead to increased congestion and spectrum usage. “Complex coordination” would be required to avoid interference with other satellites and ground-based systems.
“Substantial technological advances and infrastructure enhancements would be needed for satellite broadband to become a true fiber alternative,” Menon said.
Joe Madden, principal analyst at Mobile Experts, said the satellites Starlink has already launched can handle “a tremendous number” of users. Starlink recently disclosed it surpassed 4 million global subscribers.
Deploying satellite is “vastly cheaper” than fiber for most stretches of rural America, said Madden. If users are “spread evenly” across the rural parts of the country, he thinks Starlink “certainly can handle millions of customers.”
However, Starlink and other satellite providers will run into bandwidth challenges in urban and suburban markets. “Because only one satellite is overhead at each time, the raw capacity for each square mile is limited,” Madden said.
So, fiber and fixed wireless access would still be needed to fill connectivity gaps in areas with higher population density.
Allocating more spectrum for each satellite could help towards providing rural broadband, but that has its own set of challenges, Madden noted.
The FCC in 2023 adopted rules to preserve spectrum between 12.2-12.7 GHz for satellite services, rejecting requests from MNOs to use the band for 5G two-way mobile services. The commission is still considering whether to allocate the lower 12 GHz band for fixed and unlicensed terrestrial services.
“Other bands are occupied by incumbent users, so re-allocation for satellite services can be tricky,” Madden said.
Cheaper but at what cost?
Monica Paolini, founder and president at Senza Fili, is optimistic about satellite’s potential due to its lower cost.
Satellite broadband is not only “readily available because it does not require any infrastructure buildout,” but it can provide “good broadband connectivity” in terms of both capacity and latency at “reasonable prices,” she said.
“Even subsidizing satellite access would be much cheaper than building fiber in many locations,” Paolini said.
Maine actually just launched a program that would subsidize the cost of a Starlink terminal, aiming to connect the last stretch of unserved folks in the state.
While Paolini thinks fiber is “clearly” the best technology for broadband connectivity, its high cost per passing remains a big issue.
“In many rural areas, there is no business case to deploy fiber and you can only do it with government subsidies,” she said. “But there is a limited amount of funding available and we would like to get broadband to everybody.”
States that have enough funding to reach all or most of their unserved locations with fiber are unlikely to make significant changes to their BEAD plans, said Bryan Darr, VP of Smart Communities at Ookla.
But some, especially states out west with large areas of low population density, are already including wireless and satellite in their deployment plans.
“In these places it’s easier to imagine a change to the proportion of technologies used to introduce new broadband services,” Darr told Fierce.
What can a user do online with a satellite connection? Menon said they can do “basic” tasks like web browsing, email and social media. HD video streaming is also possible, but that’s when users will likely run into data caps and bandwidth constraints.
“Real-time applications such as gaming, video conferencing, and telehealth can be hindered by satellite’s higher latency and packet loss,” he said.
Weather can also hinder satellite performance, as signals are vulnerable to disruptions such as rain fade, Menon explained. Rain fade refers to the absorption of a microwave radio frequency (RF) signal by atmospheric rain, snow or ice.
“Heavy data usage, including large file transfers and cloud services, is slower due to bandwidth constraints and potential data limits, while fiber supports these activities smoothly with low latency,” he added.
An alternative to cable and FWA
But according to Madden, “people can do anything over a Starlink connection that a normal business office needs to do.”
Speaking anecdotally, Madden said he and his wife use Starlink at home to conduct video conferences “for hours” every day. The video quality is “much better” than the cable and long-distance FWA services they used in the past.
Research from Recon Analytics found Starlink customers experience fewer service outages than cable customers, though they still faced more disruption than subscribers of fiber broadband.
Speedtest data from Ookla indicated Starlink has a “more uniform distribution” of download performance compared to FWA and DSL-based services. In rural U.S. areas, Starlink “competes more favorably” with its peers in terms of median download speeds.
“While it can’t match leading cable or fiber providers on median speeds or multi-server latency, Starlink offers a very viable alternative in locations where cable and fiber access networks aren’t present,” wrote Ookla lead analyst Mark Giles.