5 June 2019

Global 5G Internet. The World’s First ‘Universal Basic Service’?

by Aaron Bastani

Last month SpaceX, the market leader in private space transportation, oversaw the launch of an altogether different cargo. Rather than carrying a payload for a national space agency or a private client, it launched prototypes for its own ‘Starlink’: a project which aims to provide global 5G internet through a constellation of 12,000 satellites.

That project, which by itself represents more than double the number of satellites presently in the Earth’s orbit, illustrates how far the space industry has come. Until eleven years ago no private company had successfully launched a first stage booster into space – something achieved by the Nazis in 1944, the Soviet Union and the US in the 1950s and, since then, a handful of other countries.

That elite set of nations was joined in 2008, however, when SpaceX successfully launched its Falcon 1 rocket at the fourth time of asking, successfully completing an orbit of the Earth. Since then the company has enjoyed a litany of breakthroughs, most memorably landing an orbital first-stage rocket that was subsequently re-used. Coming in late 2015 such a development meant one thing: the space industry was about to get cheaper, with reusable rockets reducing overheads by an order of magnitude. 

Once upon a time it was the rocket which was the expensive part of putting something into orbit. Now the opposite is the case with larger satellites sometimes costing three times as much to build as the price SpaceX demands to launch them. That will only continue with the emergence of a new range of actors, led by the likes of RocketLab and Relativity Space. Twenty years ago informed opinion believed a private space industry might never happen. Now the sector’s parvenues are looking  to provide low cost launches on a weekly basis.

More competition means the field is becoming saturated, so SpaceX must innovate if it wants to grow its already healthy revenues. Starlink, whose satellite infrastructure it intends to build and launch with its own technology, will be the world’s first globally available internet. While SpaceX may have comparative advantages over their rivals in creating a space-based 5G internet, they are not alone with competitors including Amazon, Samsung and OneWeb.

The fact so many companies are intent on building something which, until recently, belonged to the world of science fiction, is because cost of entry is collapsing. Last year SpaceX publicly stated that Starlink would cost somewhere between $10 and $20 billion. While that might sound a great deal its roughly half the amount the UK government received after auctioning its 3G spectrum in 2000 ($35 billion).

Meanwhile for whoever wins the rewards are staggering, with even the possibility of success already reflected in SpaceX’s rising value last week as it overtook Teslafor the first time. Now valued at $33 billion it, unlike the automotive upstart, is not publicly listed, with founder Elon Musk owning around half the company’s equity. Musk himself estimates that Starlink could generate as much as ten times SpaceX’s present revenues, built as they are on launching payloads into space. Presently such revenue is thought to be around $2 billion. While its order book is growing Musk expects a ceiling of around $3 billion. Starlink – by comparison – could generate annual revenues closer to $30 billion

The South African’s hyperbole with facts and dates, is well known. And yet, despite often failing to keep to schedule, he gets the bigger calls right. It’s perfectly possible that Starlink, just a few years from now, would be his most successful venture yet. Musk, not yet 50, is presently worth $20 billion – the success of any enterprise on such a promethean scale could see that dramatically change.

But while a space-based internet may indeed offer a better service at reduced cost – not to mention that much of the Global South won’t need to bother with the expensive infrastructure that more advanced economies adopted – a few questions merit consideration.

Firstly, how is it right that a single company, half of which belongs to just one billionaire, should own something of such critical importance? Secondly, what sense is there in multiple businesses attempting to provide the same infrastructure? Amazon are planning to launch 3,200 satellites for their system, while OneWeb is aiming for as many as 1900. This is the equivalent of building multiple toll bridges next to one another at the same part of a river.

Thirdly, given the technology underpinning all of this has been publicly-funded, from Sputnik to SpaceX’s own NASA contracts, not to mention the investment which made the internet possible at all, it seems strange that further innovation is set to make billionaires richer still. Public funding of the International Space Station alone totals some $150 billion, with a similar figure holding for the Apollo Missions in today’s prices.

Yet now SpaceX, a private company, aims to create infrastructure – only possible because of those prior investments – over which it has a monopoly and rents out, including to the US consumer, for an extraordinary rate of return. This represents a major step, as I outline in Fully Automated Luxury Communism, in applying the logic of neoliberalism to resources and value beyond our planet. Here the imperative is much the same as on Earth: socialise costs and losses, and privatise the gains.

Perhaps surprisingly for an industry which is the definition of a future-oriented modernity, the past offers an alternative. The 1967 Outer Space Treaty states that the use of outer space is the ‘province of all mankind’, a theme touched on by President Eisenhower in a 1960 speech when he proposed that the world ‘press forward with a program of international cooperation for constructive, peaceful uses of outer space under the United Nations’. 

The tendency to what I call ‘extreme supply’ – where the key inputs to everything, from labour to information and energy, get cheaper every year – explains how an industry which didn’t exist two decades ago is on its way to creating a space-based internet. Once it has done so, it will constrain such abundance within a system of rationing, monopoly and rents, this being symptomatic of how contemporary capitalism generates returns – through the constraint of plenty rather than the production of it. 

And yet as FALC makes clear, there is an alternative with extreme supply, one where it underpins universal basic services (UBS) like healthcare, education, transport and housing made freely available to all. While these will be administered at the level of the nation-state, it makes sense that the internet – increasingly the backbone of global society – becomes the first internationally guaranteed UBS, paid for by the wealthier countries of the Global North and administered, as Eisenhower might have suggested, by the UN’s International Telecommunications Union (ITU). 

Such a proposal isn’t an effort to turn back the clock or wishful naivety. A decade ago it was no less likely than the idea that a single company would administer such vital infrastructure  – which is what is now unfolding. It’s time socialists began dreaming as big as the oligarchs. If we don’t they will determine the 21st century, and with catastrophic consequences.

(Originally posted on Verso Books).

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