Starlink rescues rural Alaska using satellite broadband, without subsidies

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By SHAWN WILLIAMS

It’s finally here. Customers in rural Alaska are checking the mail and setting up their Starlink. What this means for rural Alaska residents is obvious – faster broadband and lower prices – but what does it mean for rural Alaska telecoms?

Competition is good. It drives innovation, encourages efficiency, and keeps your marketing department on their toes. The fact competition in rural Alaska was almost non-existent is noteworthy. Nearly all broadband customers are price sensitive if the speed and quality of service are comparable. Simply stated, residents will go to the provider with the lowest price for broadband. (Just look at the effect big box stores and Amazon Prime had on Alaska’s hometown retailers.)

The Federal Communications Commission sends nearly $400M a year to incumbent Alaska telecoms for user subsidies (USF Alaska Plan, E-rate, and Rural Healthcare) and since 2020, the USDA ReConnect program has awarded $322M for new fiber build-outs. In the last 6 months, the NTIA Tribal Broadband Connectivity program delivered $290M for new fiber build-outs in Alaska villages.

Over the last five years, that’s $2.6B. The fiber-based telecoms have always shared that the high cost of laying and maintaining fiber and microwave in rural Alaska has justified higher retail pricing in those areas. At a recent symposium, one provider put their middle mile expense at 83% of costs.

Starlink, on the other hand, was awarded $885.5M (over 10 years) by the FCC – then its award was canceled.

That didn’t stop Elon Musk from marching forward (using his own money) into the hard-hitting world of licenses, permits and a very healthy fiber lobby. Based on reports, thousands of Starlink terminals are arriving throughout the state, even before the constellation is fully commissioned. And there’s more direct-to-consumer competition coming with Amazon’s Kuiper, Telesat’s Lightspeed, and China’s GalaxySpace promising to cover the globe with affordable broadband.

Back to rural Alaska. Residents statewide can now get fast broadband, after buying the Starlink dish for about $650 delivered. A new market entrant with ubiquitous coverage and impressive broadband means that every single broadband provider in Alaska, regardless of technical capabilities, is now playing on a level playing field. The new, written-in-the-sky standard for broadband in rural Alaska is a minimum of 25/3 for a maximum $110 per month and sometime in Q1 2023, Starlink will likely be participating in the FCC’s Affordable Connectivity Program, bringing that cost down to $35 for qualifying households.

The federal government should not be limiting low-cost middle mile solutions when it comes to serving broadband in rural Alaska, yet the FCC, NTIA and USDA all do. Congressional direction has maintained technology neutral awards, but regulations at the agency level ignore those requirements by including technical requirements. This limits service providers to terrestrial backhaul, thereby unnecessarily increasing costs and limiting connectivity.

When it comes to the telecoms operating in rural Alaska, the paramount focus should be thinking creatively and getting middle mile costs as low as possible, ultimately meeting Starlink’s price and performance. One easy way to achieve this is by taking advantage of the new satellite middle mile covering Alaska and hybridizing existing microwave and C-band satellite networks. LEO (like the OneWeb Network) and/or GEO HTS (like the Aurora Network) can be added to any network in any community.

Alaska telecoms must adapt, utilize new satellite technology, and truly compete – just like Elon.

Shawn Williams is the VP of Government Affairs and Strategy for Pacific Dataport in Anchorage. He’s a 40-year resident of Alaska, the former Assistant Commissioner of Commerce for the State of Alaska, and a member of the Karuk Tribe of California. He’s earned a BA in Economics at the University of Alaska, Anchorage and an Executive MBA in Strategic Leadership at Alaska Pacific University.

33 COMMENTS

  1. If you choose to live in the bush it doesn’t seem like you would care about Wi-Fi. And the natives are decolonizing so they don’t want it.

    • Arrogant much?

      Choosing to live in the bush doesn’t mean not being interested in the world around them. Natives included.

      People in the bush also need access to trivial things like healthcare, education, and even on line banking.

      It might well be Bush people want to get separated from myopic, small minded people.

    • That’s some serious ignorance, Loren. Effective, affordable internet is a wonderful boost to the Bush economy – lowering costs enough to speed development of a truly cash economy.

    • This is an ignorant comment. Of course we care about WiFi. Our kids get a better education, commerce is improved, better telemedicine, better connectivity with the wider world. There are plenty of reasons to care about WiFi. Your comment about natives decolonizing just doubles down on the ignorance.

    • That’s about the stupidest comment I’ve ever seen. I don’t choose to live in the bush but I do live off grid, I don’t have cell phone service in a lot of areas or Internet services in a lot of areas out here. That doesn’t mean that I don’t want it, it simply means it’s not covered everywhere. I would also like to have postal delivery I’m not getting that either.

  2. I appreciate the author’s effort but he misses the boat by focusing only on broadband availability in rural Alaska. There are serious deficiencies when it comes to broadband availability in “urban” Alaska — and we really don’t have any “urban” Alaska. The rural folks have big-time subsidies and lots of attention. The rest of us are ignored and marginalized.

      • “……. and sometime in Q1 2023, Starlink will likely be participating in the FCC’s Affordable Connectivity Program, bringing that cost down to $35 for qualifying households.”
        Not to mention the “2.6 billion over 5 years” also mentioned.

      • I will let you do your own research if you have any interest in answering your own question. One article published on October 11, 2022 describes a federal appropriation of $100 million for Alaska rural broadband. There are multiple programs.

    • It is actually very expensive for internet out in the villages. They don’t get any subsidies to make it cheaper. In the cities, yes we pay more than some in the states, but we have options at least and it is a fraction of what they pay in the village. We even have 2.5 Gig speeds in many places now.

  3. I remember the pink cheeked, cheery telecom lobbyists when they went down ta Juneau and put on a feed of some type a few years ago. The legeelators looked quite fat the next day. Then the telecoms recent long legged graduate wrote whatever they wanted and Juneau passed it. I saw a Rothchild in the gallery that day too. Our “service” went to heck in a handbasket. I stopped watching their non-activities in Juneau and turned off tv. I can’t bear it anymore.

  4. @JMARK
    Starlink is not subsidized. urbanites can get it just the same as bush people. You now have options just like the rest of us. What’s the problem?

  5. Elon has received over $3.2B in subsidies for Tesla and was not the only company turned down for Broadband subsidies. Elon used Tesla to start and subsidize SpaceX/Starlink. Saying Starlink did not get subsdies and Elon is using “his own money” is disengenuous.

    • Frank
      All of the communication company’s are subsidized in the US, just like Ford, GM etc. oil companies, aerospace and airlines are all subsidized. Tell us who isn’t subsidized

  6. The trolls are busy here today. MRAK has drawn progressive attention (for useless people in their basements living on the productivity and largess of others).

    We have been off grid for nearly 30 years, through Starband, Dish, countless cell relays and boosters. Finally Starlink provides a reliable service allowing streaming connection with the world (as scary as that may be). And not with big brother subsidy. US, BBC, German, Russian and Chinese media are all welcome!

  7. Starlink will get a lot of pushback from Alaska’s collection of “non-profit” grifters. They’ve been living off federal grants and contracts to bring that fiber broadband to rural areas and charging some really fancy money per connection. A $675 box bought direct from the provider doesn’t provide those Davis-Bacon wages and extortionary indirect cost rates that you get taking the federal largesse.

  8. I live in very rural Alaska and have personally been screwed by GCI and their fiber optic internet. I finally bought HughesNet just to get off the GCI internet. Now I have Starlink and love it. It is blazing fast….Way faster than GCI or HughesNet and it is basically unlimited. I am waiting for Elon Musk to open up the satellite cell phone market so I can dump my GCI cell phone as well.

  9. Hopefully this will truly reveal the real location the broadband company serves. I bet they’ve been lying on the locations they serve to get the subsidy.

    I only wished that the broadband companies get penalized and have to pay back, but that will never happen.

    In my opinion, it’s not just the cheapest price that determines who you choose. It’s the quality, reliability and provides the most value.

  10. What interest a man working at Pacific Dataport has promoting Starlink while waiting for the launch of its own broadband satellite which was specifically ordered for Alaska????

  11. I dont live in the bush (off the road), but I do live in rural Alaska. For the most part, people who continue to live in austere conditions do so by choice and should not be subsidized by government for their decisions. “Homesteaders”, “pioneers” and even natives that wish to live “as their ancestors and traditions demand” have chosen to live without subsidized education, electricity, healthcare or internet service. We accept the reasonable difficulties of living this way. No need to spend money on us! If we wanted to live that way, we would move to places that accommodate. I do like my Starlink though!!!

  12. I live in Anchorage and Have Starlink, better right now than the lower cost internet available here and without the greed shown by GCI and ACS. Their hour in the sun is gone.

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