Alain McKenna Column: Elon Musk, Canadian Internet Enemy

While governments are paying billions to connect regions to high-speed internet, US billionaire Elon Musk’s satellite service Starlink promises to do the same for a fraction of the cost. Should the Canadian internet fear this revolution from space?

Starlink, like SpaceX and Tesla, presents itself in any case as an innovative technology, aimed at an industry that is running over. The provider wants to globalize the distribution of Internet access by launching thousands of satellites into low orbit, all relaying the same signal.

Elon Musk, the big boss of the three companies, is not on his first ambitious mission to disrupt an industry considered too big to stumble. Talk to the automakers…

Musk is not alone either. Amazon, with its Kuiper project, has the same ambitions. More modestly, the Ottawa-based company Telesat also expects to offer satellite Internet access in the coming years, even if its own target market is the business-to-business (B2B) market.

That said, the Internet is still considered by governments to this day as a telecommunications tool and therefore meets the established rules in this regard. In Canada, this basically means that an ISP must be based in Canada.

starlink canada

Los Angeles-based Starlink created Starlink Canada, which was given the green light by the federal government in fall 2020 to deploy its service in the Canadian firmament. Its first Canadian customers began receiving a signal late last summer. Installation cost is $649 for the antenna plus shipping. Monthly payment is $129 thereafter, with no monthly data consumption quota.

The sending and receiving speed varies from 15 to 150 megabits/second, which, in principle, is enough to simultaneously watch up to six video streams in ultra high definition (UHD, also called 4K).

Currently, the American company limits itself to targeting the northernmost regions of the country and those that are poorly served by the main Canadian suppliers: Bell, Rogers, Quebecor, etc. But Starlink’s ambition lies elsewhere, as its self-proclaimed goal is to be able to deliver an internet signal to the entire world’s population as quickly as possible.

Starlink’s first Canadian customers initially experienced frequent outages, speeds that didn’t always live up to promises, and disappointing quality of service. But just before the holidays, Canadian customers proclaimed their immense satisfaction with their Internet service provider. “It’s crazy how good it is”, summarized one of them in star of toronto.

Is this netizen confined to a cabin north of Georgia Bay telling the truth, or is his judgment tainted by that boundless admiration millions of people have for Elon Musk?

Without comparison

Because, obviously, for satellite internet to be this good, the point of comparison itself must not be very good. Or maybe it’s too expensive. And until the impact of Ottawa’s investment in the promised $1.4 billion to connect the entire country at high speeds (by 2030) is felt, new providers like Starlink can play for a prominent place in the rural Internet.

Current regional providers are mostly limited to a fraction of the speed promised by their US rival, or the service is prohibitively expensive. One reason is simple: the government last year pushed up prices charged by wholesalers – Bell, Rogers and Quebecor, again – to small independent suppliers.

The other reason: the big suppliers avoid the more remote and less profitable regions and expect governments to pay for this expansion of their own network instead.

These corners of the country are therefore fertile ground for Starlink, as it cannot, at the moment, compete with the high-speed service offered in the most populous regions of Canada, explains Desjardins Securities analyst Jérôme Dubreuil, interested in the Canadian telecommunications sector.

“The drop in satellite launch costs greatly improves the business model [de sociétés comme Starlink] “, he wrote last year. In early January, he reiterated this analysis in the Have to. “The throughput promised by low-orbit satellites is significantly higher than that of geostationary satellites. But will these companies be able to compete with Canadian suppliers? Doubt is allowed. »

Mr. Dubreuil, like other industry analysts who preferred to remain anonymous, believes that Starlink will remain a fringe player in Canada in the short term, precisely confined to remote areas. The Canadian telecom giants see the situation the same way, and that explains why the arrival of this rival from space doesn’t worry them at all.

Long term ? Bets are open. After all, automakers were saying the same thing about Tesla just five years ago. From Ford to Mercedes-Benz, it didn’t bother anyone to see the arrival of electric cars destined for a marginal market, because they were considered – wrongly – as underperforming and overpriced.

The near-dithyrambic praise of Starlink’s first customers in Canada can be dismissed out of hand if we imagine that they are the result of what could be called the Musk effect. But it wouldn’t be the first time that the businessman has been relegated to the role of an underdog… only to turn the situation around in his favor.

And this time, he’s got the Canadian internet in his sights. What will people say about Starlink in five years?

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