The satellite spectrum battle that could shape the new space economy

In early August, when corporate activity was in a summer lull, Elon Musk’s SpaceX quietly opened up a new front in a global battle over a scarce and precious resource: radio spectrum.

Its target was an obscure international regulation governing the way spectrum, the invisible highway of electromagnetic waves that enables all wireless technology, is shared by satellite operators in different orbits. And the chosen weapon was the US regulator, the Federal Communications Commission. 

On August 9, SpaceX petitioned the FCC to loosen globally agreed power limits on transmissions from operators like itself in low Earth orbit, the region of space up to 2,000km above the planet’s surface set to be a pivotal arena in the future of communication, transportation and defence.

The so-called equivalent power flux density rules were set more than 20 years ago to ensure signals from low Earth orbit do not interfere with those from systems in higher geostationary, or fixed, orbit.

SpaceX, which owns the world’s fastest-growing satellite broadband network, Starlink, told the regulator that these “antiquated power restrictions” were unfit for “the modern space age”. It went on to charge that the international process governing the rules had been hijacked by an alliance between the operators of older, geostationary systems and “America’s staunchest adversaries”. 

At stake was “US global competitiveness in the new space economy” and the future of satellite communication, it said. 

SpaceX’s broadside was the second attempt in less than a year to win a revision of these highly technical rules. Nine months ago at the World Radiocommunication Conference, where regulations governing spectrum use are decided, SpaceX and Project Kuiper — Amazon’s attempt to build a rival to Musk’s system — lost an initial attempt to win global support for a change to the power restrictions. 

Although many in the industry believe a revision is long overdue, the discussions were tense and divisive, according to participants.

On one side were the upstart tech companies whose low Earth orbit satellite networks are threatening the business models of longer-established competitors with high-speed, low-latency broadband services.

On the other were these incumbent geostationary operators such as Viasat and SES, which have operated systems since the early days of satellite broadband and are concerned that any changes could interfere with their networks.

Governments such as Japan, France, Germany and Brazil shared some of the concerns about interference, but also had wider strategic questions about proposals that would further enhance the power of these players.

And while welcoming the connectivity that Musk’s network offers, some governments have also voiced fears about a growing reliance on a service run by a private individual whose interventions in political and cultural issues have often been controversial.

One official cites the decision by Musk to limit the operation of Starlink in areas of Ukraine that Russian forces had occupied since 2014. “It is an infrastructure that’s provided by one private company. Whatever their reasons, they may stop the service,” he says. SpaceX did not respond to requests for comment.

What might seem at first like an arcane, technical dispute has become a proxy for a wider philosophical clash: about the power of US billionaires in a lightly regulated but strategic region of space; the implications for competition; for national sovereignty; and for equal access to the economic benefits that low Earth orbit offers. 

Musk was not the first to imagine the potential for a mega constellation of satellites delivering connectivity from low Earth orbit. But he has been the fastest to exploit the opportunity to provide broadband access to the most remote parts of the planet, thanks to the fact that his rocket company, SpaceX, is able to deploy satellites at a record-breaking pace. 

In the five years since its first launch, the Starlink network has grown to more than 6,000 operational satellites, two-thirds of all active spacecraft orbiting the Earth today. It is operating services in more than 100 countries and has proven itself indispensable to Ukrainian forces in the war against Russia, and in emergencies such as the earthquake that shook Japan’s Noto peninsula this year.

“Starlink now generates a majority of all satellite communications traffic in the world,” says Tim Farrar of consultancy TMF Associates. “If they can transmit at higher power levels, they will be able to produce more capacity, encode data at higher speeds. So they will be more able to serve peak levels of demand.”

Soon Project Kuiper — founded by Jeff Bezos’s Amazon — will begin launching its network, with services from low Earth orbit expected to begin next year. It plans to have more than 3,000 satellites delivering broadband services and, like SpaceX, will have its own launch provider. 

This means a pair of American companies, backed by two of the world’s wealthiest people, could have overwhelming dominance over critical territory in the emerging space industry.

“Starlink and the US approach to space is creating almost a monopoly in some applications,” says Sara Dalledonne, lead on regulatory affairs at the European Space Policy Institute who attended the sessions. “Many countries are worried they won’t be part of the game.”

While there is genuine anxiety in many administrations about the risks of interference to critical services provided by geo operators if the power limits are loosened, there is also a reluctance to do anything that might make SpaceX and eventually Project Kuiper even more dominant.

“That request to loosen power rules speaks to a new battleground in space right now,” says Hazem Moakkit of legacy operator Intelsat, who was at the summit of regulators and industry in Dubai last November. “It is no longer a discrete battle between one interest and another . . . It has become a proxy for a lot of issues.”

Radio spectrum has long been a focus of geopolitical and competitive tensions.

This range of electromagnetic waves enables all modern wireless technology, ferrying the data for everything from mobile communications to emergency services, navigation and WiFi. It is “the oxygen of the technology and innovation ecosystem”, says Brendan Carr, Republican commissioner at the FCC.

Different frequencies are used for different purposes, depending on their range, capacity and ability to penetrate obstacles. Extremely low frequencies may be used for limited, long-range communication. Satellites use much higher frequencies. 

But spectrum is finite and in the more than 120 years since Guglielmo Marconi first demonstrated its practical use as a means of wireless communication, most usable bands of radio spectrum have been allocated to specific purposes, from TV broadcasting to emergency services to WiFi communications.

Now, with the world’s appetite for wireless connectivity exploding, these bands are getting congested; and nowhere is that congestion being felt more than in the rapidly evolving commercial space sector.

“Over the years, a lot of spectrum has been taken from satellite and mostly given to mobile operators for high-speed technologies like 4G and 5G,” says Professor William Webb, a former director at UK communications regulator Ofcom. “What has changed in the last few years is that a whole new load of satellite applications has emerged. That needs new spectrum and spectrum is a very scarce resource.” 

As a result, some satellite operators are seeking “backdoor routes” to gaining access to more spectrum, says Webb, such as the attempt to loosen power limits. 

Such a request is no small matter, Carr adds. “Seemingly technical decisions have all sorts of downstream consequences on competition, on technological development, on where capital flows, on which countries are going to lead when it comes to these new areas.” 

Since long before the space age, the use of spectrum has been co-ordinated on a global and regional basis by the International Telecommunications Union, a special agency of the UN.

The overriding principle is that it must be used as efficiently as possible, with older technologies making way for newer ones, to ensure maximum exploitation of a finite resource.

So every three to four years, the ITU brings spectrum regulators from more than 190 nations together with industry at the World Radiocommunication Conference to review and, if necessary, revise the Radio Regulations, an international treaty governing the use of the radio-frequency spectrum and orbits.

It is there that agreement is reached on which bands will be used for which purposes. But ITU member states still have ultimate sovereignty in deciding how to allocate and regulate spectrum within their own borders. They can set the terms and conditions of operation domestically.

It is on that basis that SpaceX has petitioned the FCC to loosen the power limits in the US. If it wins the support of the US regulator, the ITU membership will be “between a rock and a hard place”, says one space industry executive. “Not everyone wants to follow the US” but they will have to recognise the breach. “It has opened up a new front,” he adds.

SpaceX’s attempt to change the rules is not exceptional. Spectrum has “always” been used as an anti-competitive weapon in space, says David Willis, Ofcom’s spectrum group director. “The satellite companies are not just fighting the terrestrial [telecoms companies], they’re fighting each other.”

If you want to buy a launch in a reasonable launch period, the only place to go is SpaceX. It is an imbalance of power

But the intervention has highlighted the weaknesses of spectrum governance, say several industry executives. The new space industry is evolving at a lightning pace, but changes to regulations can only be agreed at best every three to four years, and often as much as eight.

Spectrum has long been used as a way to “slow things down . . . in the international forum”, says Willis. The approach is, “if I can buy another four years or eight years to get money out of my existing asset, that’s good for me”. 

The system gives equal rights to every country, which some ITU members believe makes it deeply inefficient and incapable of reform.

Over time, the ITU and the WRC have become more “politically driven”, says one large industrial member, as countries seek to influence governance and allocation of spectrum to uses that favour their own industries and economies.

Many see the WRC as increasingly a forum for political horse-trading rather than for discussions based on engineering and physics about the best use of spectrum. “Decisions are rarely taken on sensible technical grounds,” says Webb.

In response to SpaceX and Kuiper’s request, last year’s WRC summit kicked the can down the road — it said it would allow studies to determine whether the limits could be loosened without jeopardising geo operators, but there can be no regulatory consequence before 2031.

Some ITU member states who opposed the proposal believe any changes to the power limits should be part of far wider reforms on how spectrum is managed. “[The SpaceX and Kuiper] proposal was not balanced. They are only looking at one aspect which will, if changed, be in their favour. But other aspects should be considered,” says an official from a country opponent to the proposal.

“When this rule was made, nobody thought that there would be thousands or even tens of thousands of little satellites flying around.”

With the regulatory system so slow to adapt, some fear there is no one to monitor the potential conflicts of interest that are emerging in the new space economy.

For example, some question whether SpaceX’s dominant position in providing launch services gives it unfair advantage in negotiating spectrum-sharing agreements with companies seeking to put their satellites into orbit. 

The more satellites these systems have, the more flexible they can be to accommodate other systems

Under ITU rules, the first to file for a spectrum licence in a particular band has priority rights over signal transmissions. Anyone subsequently filing to use that band has to make sure they do not interfere with the transmissions of the priority holder, which adds cost and complexity to a network. 

Co-ordination deals can be struck to share those rights. But if SpaceX were able to use its launch services as leverage for more a favourable agreement on sharing spectrum, there is no regulator to raise the alarm, say some satellite companies.

“If you want to buy a launch in a reasonable launch period, the only place to go is SpaceX. It is an imbalance of power that could enable them to use launch as a mechanism to acquire more bands,” says one satellite company that asked to remain anonymous. “The regulator’s purview is limited to spectrum. They cannot all of a sudden be talking about launch when their priority is spectrum.”

However, Patricia Cooper, founder of Constellation Advisory and a former vice-president in charge of regulatory affairs at SpaceX, points to the fact that SpaceX has signed launch contracts with ostensible rivals such as Canada’s Telesat or low Earth orbit operator OneWeb. “It’s hard to say they are using launch capabilities as an anti-competitive cudgel,” she says.

Nevertheless, some governments are asking whether there should be more co-ordination between competition and licensing authorities.

“If you end up with one mega operator then it becomes very hard for competition to be there,” says a UK official. “That is what we have to think about — how to maintain competition and guarantee the best outcome.”

SpaceX believes its satellites are able to avoid interference with other spectrum users through closer collaboration and information exchanges, and is pressing ahead with experiments to demonstrate that.

In a recent LinkedIn post, SpaceX’s ITU lead, Udrivolf Pica, described the outcome of a study with the National Radio Astronomy Observatory, saying that the company’s satellites had been able to “dynamically steer satellite beams away from telescopes in milliseconds” to avoid interference. “This is efficient use of spectrum!” he posted.

Not all geostationary operators are immediately hostile to the idea of reviewing the rules, even if changes may make Starlink and Project Kuiper more formidable competitors.

Daniel Goldberg, chief executive of Telesat, which has just raised C$2.54bn ($1.89bn) in government funding for its own planned low Earth orbit broadband constellation, Lightspeed, accepts that they should be looked at given the changes in technology.

“The more satellites these systems have, the more flexible they can be to accommodate other systems. And that’s just because they have more opportunity to hand off to another satellite if there is going to be interference,” he says.

The FCC says SpaceX’s petition is still pending. While the US has supported the principle of a change to the rules, the FCC’s chair has recently acknowledged concerns about the dominance of Starlink.

“We do have one player [that has] almost two-thirds of the satellites that are in space right now, and has a very high portion of internet traffic,” said Jessica Rosenworcel at a recent conference in Washington. “The way I see it is, our economy doesn’t benefit from monopolies.”

But not all of the FCC’s commissioners are concerned. Speaking to the Financial Times before the SpaceX petition, Republican commissioner Carr says he believes Starlink is a key asset in a global race for technological primacy.

The US is already falling behind other countries including China in freeing up spectrum for the most disruptive technologies, he says. And now Beijing is planning to launch its own versions of Starlink. 

Regulators need to get out of Starlink’s way, Carr argues. “We want to give other competitors a fair shot, but [Starlink] is a technology that is actually delivering,” he says. “A priority [has to be] making sure that they continue to have the spectrum, the oxygen that they need to keep up with the successes that they’ve been demonstrating.”

Graphic illustration by Bob Haslett

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