June 25, 2015
Is the sky big enough for two multi-billion dollar satellite internet projects? In the next two years, we’ll find out if entrepreneurs driven by human betterment—one looking up at the heavens and humanity’s future, the other looking down to the earth’s neediest—can share a shot at creating the next big space product.
“This is intended to generate a significant amount of revenue and help fund a city on Mars.”
Industry insiders say this race has taken on the aspect of a feud: In 2014, Wyler and Musk discussed collaborating (paywall) on this effort before a shake-up left them on opposite sides. Wyler’s new company is backed by Musk’s rival in space, Virgin Galactic’s Richard Branson, and Qualcomm, while Musk raised $1 billion from Google, which had previously considered working with Wyler on satellite internet. Update, 6/25: OneWeb announced that it has secured $500 million in initial investment from additional partners Airbus, Bharti Enterprises, Hughes Network Systems, Intelsat, Coca-Cola and Totalplay.
“Part of the issue is the original filings that Musk made were in late June last year, when he was still in discussion with Wyler about collaborating,” Tim Farrar, a satellite industry consultant who worked on Teledesic, a failed 1990s satellite internet play, told Quartz. “Wyler feels that Musk took his idea while they were still discussing collaboration, went to make a major filing behind his back, and stole his idea.”
Wyler’s ace in the hole is that he filed first, in 2012 and 2013, for an ITU license to transmit along a band of radio frequencies called the Ku band, which are uniquely-suited to satellite transmissions because they work best with the latest generation of satellite antennae, replacing bulkier satellite dishes. Combined with cheaper satellites flying closer to earth, engineers believe that it is possible to solve the high-lag problem that plagues current satellite internet.
Under the first-come, first-serve rules governing the ITU, if Wyler can get his satellites up and operating on those frequencies by the end 2019, he has the rights to use them, and there’s not much the ITU can do to force him to cooperate with anyone else who wants to operate on that frequency on a global level. That license, along with his expertise, had first Google, then SpaceX and ultimately Virgin Galactic, Qualcomm and Airbus ready to join Wyler’s operation.
Since Wyler’s filing, at least six other projects have registered satellite constellations in the hope he misses his deadline. The most interesting project, known as STEAM, for a 4,000 satellite internet constellation, was filed by Norway’s telecommunications regulator in June 2014.
This is the filing Farrar was referring to; its particulars match what is known about SpaceX’s plans for a satellite constellation, and industry speculation is that the constellation was registered by SpaceX. Musk has said that the company filed at the ITU, though a spokesperson declined to comment when asked if the company was behind the STEAM registration. (It is common for companies to register satellite spectrum through national telecom regulators without revealing their identities.)
Though the ITU is designed to resolve transmission conflicts for international satellites, every country can make rules about the spectrum in its jurisdiction. And in the US, the Federal Communications Commission has a different approach than the ITU: If two licensees want to use the same spectrum to transmit to people in the US, the FCC will broker its own deal between the two if the companies can’t resolve the problem themselves—the ITU priority essentially evaporates.
“We’re beyond, ‘Can we build it?’” he says, claiming his company is prepared to mass-produce satellites and their components to be assembled “like legos” for specific jobs, to an extent that he expects the manufacturing venture to change the industry, which has never mass-produced satellites before. “It’s not our primary business, but the cost of satellites will come down dramatically.”
SpaceX has plenty of space-manufacturing chops after designing and building its Falcon rockets and Dragon space capsules, often developing techniques to build components in-house rather than paying more for an outside supplier. The company opened an office in Seattle this year to develop its satellite division, but it is unclear how long the company will take to begin production.
Where SpaceX does have a clear advantage is getting the satellites into space, since that is the company’s primary business. It remains the lowest-cost launch provider to low-earth orbit, and one of the most flexible.
OneWeb, on the other hand, will need a more expensive contract with a launch provider. It has announced that Arianespace, the leading European rocketry company, will fulfill 65 launch orders, including 21 with Russian Soyuz rockets, though it’s not clear when they those launches will occur. The company has also committed to launch ten satellites with Richard Branson’s Virgin Galactic. But rocketry experts are skeptical that the Virgin will be able to build and fly a satellite-launching rocket in the next few years.
If Wyler is concerned about being forced into sharing American spectrum with SpaceX, he isn’t showing it. “We are fully focused on building our system and enabling broadband access for everyone,” he tells Quartz.
“The satellites constitute as much, or more, of the cost of space-based activity as the rockets do. Very often, actually, the satellites are more expensive than the rocket. So, in order for us to really revolutionize space, we have to address both satellites and rockets,” Musk said at the opening of the Seattle office. “[This satellite constellation] is intended to generate a significant amount of revenue and help fund a city on Mars.”