SpaceX started as a company developing reusable rockets in hopes of lowering the cost of entering space. They have been successful at that, and many clients including NASA now rely on SpaceX to send payloads into space for them. It also now operates its own satellite internet service, Starlink. But Starlink has competitors, albeit none that have gotten anywhere close to its success—Amazon for instance has been working painfully slowly at launching its own network. Those competitors need rockets to get their satellites into space, and there aren’t many options besides SpaceX and New Zealand’s Rocket Lab. Amazon, for instance, will be using SpaceX to get its Kuiper satellites into orbit.
That creates an obvious potential conflict of interest: SpaceX has something a competitor desperately needs, so what will they do to get it?
According to The Wall Street Journal, SpaceX customers sometimes have to give up some concessions on spectrum, valuable but finite space in the air through which they can deliver internet to the ground. Governments slice up the airwaves and auction them off for billions of dollars; they also help mediate between different users to minimize interference.
According to the Journal, in 2022 SpaceX asked competitor OneWeb to make concessions on its spectrum use at the same time as they were in negotiations over the launch of its satellites. This could mean different things, but satellite companies often operate within the same frequency range and SpaceX wanted OneWeb to adjust its operations to minimize interference. OneWeb confirmed that a deal was made over spectrum but told the news outlet that they were not related to its launch negotiations.
Another company, Canadian firm Kepler Communications, has relied on SpaceX to launch 16 out of 23 satellites into space for a network it primarily expects to be used for space-only communication. It reportedly had to get the Canadian government involved in mediating a dispute over sharing spectrum with SpaceX that it was allocated there.
Sometime this month, the government added Starlink satellites to a list of foreign satellites allowed to operate in Canada, opening SpaceX up to offer service in the country. The two still need to coordinate sharing the airwaves.
It’s unclear what would happen if Kepler or OneWeb had refused to cooperate with SpaceX’s demands. In the article, the Journal does note that SpaceX leaders have said internally that it feels it can serve the needs of both Starlink and outside clients. But nonetheless, satellite companies are really hoping to see more rocket companies compete with SpaceX.
In most cases, spinning off Starlink and making it independent could alleviate anti-competitive concerns. Unfortunately, we know Musk likes to intertwine his various businesses, like when he sent engineers from Tesla over to Twitter to do essentially free work. And when Nvidia had allocated over $500 million of AI chipsets to Tesla, Musk stepped in and asked the chipmaker to prioritize X and xAI instead. So long as Musk owns shares of Starlink, it’s hard to see the company not getting priority at SpaceX.
