Starlink

Here we are again with the Duterte administration raising our hopes that our broadband problems will soon be over. First, it was the entry of the third telco to compete with the existing duopoly. Now, it is Starlink.

Trade Secretary Ramon Lopez announced last week the planned entry of Space Exploration Technologies Corp. (SpaceX) in the country, to provide internet services here. Starlink is the satellite internet system from SpaceX that is capable of delivering 150 Mbps internet speeds to theoretically any place on the planet. All the customer needs is a clear view of the sky and the antenna.

SpaceX is a tech company of entrepreneur Elon Musk who is also known for Tesla and the Hyperloop. In the fall of 2020, the system began serving its first users.

SpaceX’s system improves on the existing technology by using low-earth orbiting (LEO) satellites that circle the planet at only around 300 miles above the surface. The shorter distance drastically improves internet speeds while also reducing latency.

The SpaceX constellation consists of over 1,600 satellites as of mid-2021. Thousands more of these small satellites will be in orbit soon. The satellites communicate with designated ground transceivers.

The promise, according to our trade chief, is for SpaceX/Starlink to enable a much faster broadband speed, better connectivity, more capacity for telecommunications services, and more affordable rates for consumers.

Secretary Lopez credited the recent signing of the amended Public Service Act (PSA), which allows up to 100 percent foreign ownership of public services in the country, for the decision of SpaceX to invest here.

The company is currently establishing a local Filipino entity that will be their wholly-owned subsidiary. The Philippines is set to be the first in Southeast Asia to avail of this proprietary technology.

The service uses terminals that resemble TV dishes equipped with antennas and are usually mounted on roofs to access the internet via satellite. People can buy the service online for $99 a month, plus $499 for the equipment. Hopefully, they will have affordable third world pricing.

According to Google, Starlink is currently designed to be a non-mobile internet provider. Its satellite dishes are meant to be stationary and provide internet for homes and businesses. You can connect to your Starlink network using your cell phone, but only via wifi and within proximity to your router.

Starlink recently hit the headlines after providing continuous internet service to war torn Ukraine. It is providing the information lifeline of besieged Ukrainians to the world after the Russians bombed cell phone towers.

The use of Starlink in Ukraine is a major test of the relatively new technology that could have widespread implications for the future of war. The internet has become an essential tool for communication, staying informed and even powering weapons, the Washington Post reports.

The Starlink technology is being used by civilians in areas under attack that have lost internet service, and by government officials. The Times of London reports that a Ukrainian unit is using Starlink to connect its drones to attack Russian forces.

All too good to be true for harassed Pinoys making do with slow and unreliable internet service, specially in far flung areas. Batanes, for example, can really benefit from this technology and should be prioritized.

But how will Starlink enter our market? Aren’t there enough regulatory hurdles to stop it?

I talked with one telco analyst and I was told that Starlink can use both the PSA amendment and EO 127. Under EO 127, Starlink can register as a satellite service provider or operator (SSPO) with the DICT and as a value-added service (VAS) provider with the NTC.

This arrangement would allow Starlink to get bandwidth from its own satellites (as an SSPO) and sell internet services directly to end users (as a VAS provider). Under EO 127, an SSPO can sell directly to an ISP and VAS provider, without the need for a franchise. Under the PSA amendment, both a telco and a VAS provider are not subject to the nationality requirement.

Indeed, there are reports that after the passage of the PSA amendments, Starlink abandoned the idea of having a joint venture with Converge through a 60-40 equity share where the latter effectively acts as Starlink’s subsidiary in the Philippines. The nature of the agreement has changed to Converge leasing its fiber lines and other ground support equipment to Starlink Philippines. Starlink will launch its commercial operations in 2023.

Starlink’s entry means PLDT and Globe will have to match its technology. Someone in one of my Viber groups volunteered the information that in response to Starlink’s entry, PLDT and Smart signed a memorandum of understanding with US firm AST SpaceMobile Inc, builder of the first space-based cellular broadband network accessible directly by standard mobile phones.

I emailed Al Panlilio, PLDT president, and he confirmed they are talking to “various satellite providers or operators to explore opportunities in providing connectivity solutions to far flung and remote locations, particularly the underserved and unserved areas not reached by terrestrial networks.”

I also asked Globe and I was told that it has an ongoing partnership with Curvanet, also a satellite-based solution that can deliver broadband connectivity to any device or handset with WiFi. Globe indicated they are still in testing mode and have no commercial rollout plans yet… so no pricing indicators either.

But will SpaceX have problems once it gets wide acceptance? Will the NTC allow a 100 percent foreign-owned company to use spectrum?

It can be argued that the PSA amendments impliedly amended Commonwealth Act 3846 (the Radio Control Law of 1931). Since the PSA amendments removed the nationality requirement for duly enfranchised telcos, logic follows that Sec. 4 of Act 3846 is impliedly amended.

Also, under the PSA amendments, a “VAS provider,” such as an ISP, is not considered telecommunications, hence is not subject to the same requirements (Congressional franchise and CPCN) as a telco.

Interesting days ahead. That’s how the Duterte administration can redeem itself from the “dud” of their third telco promise to improve broadband services with the entry of DITO, a partnership of a Duterte crony with China Telecom.

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco