Starlink's Dynamic Pricing Illustrates The Capacity Limits of Satellite Technology

Starlink is introducing congestion pricing in rural America in places like Kansas and Missouri despite a 10,000 satellite constellation. There is only one credible explanation: capacity shortages. Moreover, adding satellites will not fix the problem long term as I show below.

Enormous Satellite Constellations Yield Only A Trickle of Throughput Per Square Kilometer
Starlink's V3 satellite can transmit a terabit per second to Earth. Assume generously that Musk has 42,000 of them four or give years in the future. That's 42 petabits of download capacity. The average person or even the business community will be fooled into thinking this is enormous capacity. Assume it is evenly distributed over the earth's surface of 520 million square kilometers for sake of simplicity. That equals only 82 megabits per square kilometer.

Now you can place more satellites in certain orbits to target more densely populated areas. But this is not a fix because a V3 transmit beam has a radius of 7 kilometers. So each beam covers 160 square kilometers, but its maximum download is 488 megabits. So this implies maximum 3 megabits downstream per square kilometer. But on average there are 500 people per square kilometer in New Jersey. This pretty much guarantees that high Starlink uptake results in capacity shortages and poor Internet performance in any densely populated area.

So the congestion pricing is probably not Starlink taking advantage of its temporary monopoly, but rather rationing capacity in area where it has only a couple percent of the market. Hype and exaggeration result when people look at absolute numbers like 42 petabits, but don't do the math. Satellite cannot reuse capacity to the same extent as terrestrial networks because each service area is much larger and this dilutes the download speeds that an individual user will get. 

Click here for more details on Starlink's congestion pricing: https://www.pcmag.com/news/not-sustainable-starlink-users-compare-dynamic-pricing-to-being-held-hostage

Screenshot of PC Mag Article on Starlink's Unpopular Dynamic Pricing


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