SpaceX Wields Dominance in Rocket Launches to Boost Starlink
Elon Musk’s space company asked rival satellite operators to cede valuable spectrum rights during talks to negotiate launches
SpaceX has used its position as the world’s primary rocket launcher to push satellite rivals to share wireless airwaves, showing how the company can flex its power in one area to benefit another part of its business.
The Elon Musk-led company asked companies such as Kepler Communications and OneWeb to share their so-called spectrum rights with its Starlink broadband-internet business before agreeing to launch their equipment into orbit, according to people familiar with the matter.
Obtaining agreements to share spectrum is important for Starlink to provide clear links to its more than four million users as it expands service in markets around the world.
Attorneys from one law firm, Wilson Sonsini, met with the Justice Department’s antitrust division in recent months to bring attention to these arrangements on behalf of some satellite and rocket companies, people familiar with the meetings said. The goal was to discuss whether SpaceX is abusing its market power, the people said.
The Justice Department and a Wilson Sonsini spokesman didn’t respond to requests for comment.
A SpaceX spokesman said the company can’t force another satellite operator to reach a spectrum-coordination agreement. He said the company also can’t force inequitable terms because the agreements in question have to be ratified by governments, ensuring that they are fair.
“We consistently work to promote both a competitive broadband landscape alongside a robust launch economy,” the spokesman said in a statement.
Two businesses under one roof
SpaceX has evolved from a scrappy startup to a preeminent space-technology company launching more rockets than anyone on behalf of government and commercial clients. The company has successfully put two distinct businesses—launching rockets and operating satellites—under one roof. Other operators specialize in one business or the other.
The closely held company, valued at over $210 billion, regularly ferries satellites to orbit for its satellite-operating rivals. SpaceX works through scheduling flights, which on its mainstay Falcon 9 rocket can cost around $70 million, according to a pricing plan on the company’s website.
Several industry executives told The Wall Street Journal that they would be surprised to see spectrum put on the table during rocket-launch negotiations, while others said horse-trading is common during such discussions.
“At issue would be to what extent does SpaceX amass more power” that leads to a “serious distortion of competition in that second market” for satellite communications, said Bill Kovacic, a former Federal Trade Commission chairman and professor at George Washington University Law School.
Leaders at SpaceX have said the company can serve the needs of both outside customers and Starlink, its internal client. More recently, it has emphasized the distinction among the two divisions in private meetings and public conferences.
Satellite executives laud SpaceX’s launch capabilities but have repeatedly said they want more options to get to orbit. Several of SpaceX’s rocket competitors are years behind schedule in ramping up new vehicles, limiting other options on the market.
“There is no competition, still, to SpaceX Falcon 9 that’s realistic right now, but we need it,” said Matt Desch, chief executive of satellite operator Iridium Communications.
Sparring over satellite policy
In 2022, Musk’s company asked internet-satellite operator OneWeb to make spectrum concessions while the companies were discussing a deal for launching OneWeb satellites, said people familiar with the talks.
OneWeb and SpaceX had previously sparred over satellite policy, but the tables turned following Russia’s February 2022 invasion of Ukraine. After the U.S. and other countries sanctioned Russia, OneWeb suddenly wasn’t able to get its satellites launched to space on Russian vehicles slated to carry its gear.
About a month later, OneWeb buried the hatchet with SpaceX, saying it had struck an agreement to resume satellite launches on SpaceX rockets.
OneWeb and SpaceX told U.S. regulators in a joint letter that the deal was reached after “extensive good-faith coordination discussions.” The specific settlement terms were confidential, but a former OneWeb employee said the company made spectrum concessions to secure the launch slots it needed.
A spokeswoman for OneWeb, now part of French satellite operator Eutelsat, said reaching a coordination agreement was good for both sides. She denied OneWeb made concessions in reaching the spectrum deal and that it “bore no relation to our launch agreement.”
Spectrum is a valuable resource for satellite communications companies that share space in the sky. But the job of coordinating competing satellite networks has grown more complex, involving regulators from the U.S. and abroad. In rare instances, regulators act as arbiters of disputes.
U.S. and Canadian regulators mediated a dispute between Kepler and SpaceX over spectrum sharing, people familiar with the meetings said. A spectrum-coordination agreement would help Starlink gain broader access to the Canadian market, the people said. Canadian officials and at least one SpaceX lobbyist met a half-dozen times between February and April, according to Canadian lobbying records.
Toronto-based Kepler has largely relied on SpaceX for launch services. SpaceX has deployed 16 of the 23 satellites that Kepler has had launched, with the most recent flight occurring last November, according to Jonathan McDowell, an astrophysicist who closely tracks space activities.
This month, Canada added Starlink’s Gen 2 satellites to a list of foreign satellites licensed to operate in the country, government records show. In order for SpaceX to operate in Canada, the company and Kepler needed to reach a spectrum-coordination agreement, a deal that must be approved by country regulators, a person familiar with the process said.
A Kepler spokeswoman declined to comment.