Mar
12
The fellow who gave this dummy his car hopes to turn broadband on its head.
Remember the guy who, about a month ago, let a literal dummy take his car on a prolonged spin through outer space? Now, he may be making the folks at Comcast, AT&T, and other broadband service providers nervous.
But those of us who are into digital banking should cheer him on.
Said guy is jillionaire Elon Musk, CEO of Google-owned SpaceX and CEO of Tesla, Inc. It’s only fitting, then, that the car tooling around in space with a dummy at the wheel would be a red Tesla Roadster, Musk’s favorite sports car.
Musk, you may recall, made his fortunes selling Zip2 to Compaq and founding an online payment company that morphed into PayPal, which eBay picked up for a mere $1.5 billion. Since then, he has turned the automobile industry on its head, which he now hopes to do for broadband Internet.
Just two weeks ago, SpaceX sent two test satellites into orbit, literally and metaphorically launching its Starlink satellite network.
The purpose of Starlink? According to CNBC:
Starlink will offer broadband speeds comparable to fiber optic networks, according to FCC documents, by essentially creating a blanket connection across the electromagnetic spectrum. The satellites would offer new direct to consumer wireless connections, rather the present system’s redistribution of signals.
Assuming the test satellites work as hoped, SpaceX plans to have a total of 800 of them in orbit by the end of 2019. And assuming they work as hoped, CNBC reports, SpaceX plans to launch “… an additional constellation of 7,518 V band satellites, situated in a ‘very low’ Earth orbit at just over 200 miles.”
The Starlink system could bring three important changes to the digital landscape.
First, Starlink promises to make broadband Internet available in geographic pockets where laying cable has to date not been economically feasible. This is no small thing. About a year ago, the FCC reported:
10 percent of all Americans (34 million people) lack access to 25 Mbps/3 Mbps service … 39 percent of rural Americans (23 million people) lack access to 25 Mbps/3 Mbps … [and] … only 4 percent of urban Americans lack access to 25 Mbps/3 Mbps broadband.
Second, it will offer an alternative in markets now dominated by a single major broadband provider.
Third and perhaps most threatening to existing broadband providers, Starlink won’t just be an alternative. It will be a blazingly faster alternative. Its speed and quality are predicted to rival those of a fiber optic network.
I might predict one of two fourth changes
Somehow I don’t expect the likes of Comcast et al to take the new competitive threat lying down.
If they respond the way Adam Smith would have preferred, they will move fast to improve their own delivery and pricing. I hope that happens.
Unfortunately, another option exists. They may seek legislation tying SpaceX’s hands. Musk is no stranger to this method. When the Tesla automobile was ready for market, established automakers and dealer associations went straight to work keeping Tesla out of their states. The battle is ongoing.
Why I’m cheering Musk on
On the philosophical side, competition is the foundation of our economy. That alone is plenty of reason to cheer him on.
Moreover, making broadband access available worldwide should strengthen economies, improve communications, and raise education levels for all.
Musk’s success would be great news for digital banking.
It would allow us to deliver digital banking services to once inaccessible markets. Moreover, Starlink’s fiber-optic quality and speed will mean better service, less waiting time, and, therefore, less frustration for digital banking clients.
Let’s hope the likes of Comcast et al respond by improving their product and service rather than through legislative tampering. Then, everyone wins.