Elon Musk Stumbles Against a Tough Billionaire

Tesla’s CEO is fighting several battles at the same time but this one is under the radar.

It is not a battle that gets the headlines. 

But this fight is just as important for Elon Musk as the standoff between him and Twitter  (TWTR) – Get Twitter Inc. Report after he withdrew his $44 billion acquisition offer for the platform.

Twitter is a global social network whose logo, the blue bird, is familiar to millions of people around the world. Control of the platform is thus unsurprisingly a passionate concern both because the people who make the news, like Musk himself, are present there, and because the social media also shapes public opinion.

The standoff between SpaceX through its Starlink satellite internet access service and Dish Network, the satellite television provider, is an important issue for Musk as well. Starlink, a high-speed internet powered by a network of thousands of small low-orbit satellites, is the first consumer product from SpaceX. Musk’s plan to turn the rocket company into a firm capable of transporting people to the Moon and Mars rests on the profitability of Starlink.

A Lot Is at Stake

“Starlink is a gamechanger for remote locations,” Musk posted on Twitter on July 18.

This is to say the importance of Starlink in the eyes of Musk. The only problem is that a big obstacle stands in the way of Starlink and Musk. That hurdle is called Dish Network and its billionaire co-founder and chairman Charlie Ergen.

The two billionaires clash over the use of the frequencies, the 12-gigahertz radio spectrum, where SpaceX sets Starlink. Dish, which transmits television via the same frequencies, wants to use them for its ground-based 5G internet service. Musk and SpaceX oppose that and believe that there will be interference thus affecting the quality of the service provided to their customers, which Dish disputes.

“It’s very basic situation,” explains Mike Dano, who’s been following the dispute as editorial director at Light Reading, a news website. 

“There’s actually a fair amount at stake here, because they’re not making more spectrum. So, all the companies that are doing wireless communications they get as much spectrum as they get, and there’s no more. The amount of spectrum that you have is directly related to how fast your network is, and how many customers you can support. The more spectrum that you have, the better your network is. So the heart of this disagreement between Starlink and Dish is that both of those companies want this spectrum so that they have a good network.”

Both camps are therefore putting pressure on the Federal Communications Commission (FCC), which is down one member because the Senate has still not confirmed President Joe Biden’s nominee, Gigi Sohn, for a key tie-breaking seat.

Inflammatory Rhetoric

Starlink and Dish use inflammatory rhetoric and opted for different lobbying campaigns. Ergen has had multiple meetings in Washington D.C. Last week he and his team attended meetings with the FCC chairwoman and several FCC commissioners in Washington, D.C, said Meredith Diers, a spokeswoman in an emailed statement.

Starlink’s “misinformation campaign” is  “now falsely telling customers and the public that coexistence is not possible in the band among Starlink and 5G services,” Dish writes in a document summarizing the meetings and reviewed by TheStreet. “Despite these claims, the record demonstrates that the enormous benefits of allowing 5G terrestrial operations in the 12 GHz band can be realized without harmfully interfering with existing operations.”

Musk has chosen a grassroots campaign to pressure the FCC. He has just accused Ergen of wanting to steal the frequencies reserved for satellites and encourages Starlink customers and his millions of fans to contact the FCC to complain.

“Charlie Ergen is trying steal the 12GHz band meant for space Internet, ” the tech tycoon wrote on Twitter on July 15. “Not cool.”

“What can we do to help SpaceX?” a Twitter user asked.

“Write to the @FCC! That would be great,” Musk responded.

Ergen is worth $6.5 billion according to Bloomberg Billionaires Index, while Musk is worth $219 billion as of time of writing.

This disagreement between the two billionaires has no impact on their current customers, according to experts. 

“What really is going on here is that Starlink is currently using the 12 gigahertz band for its service, but it’s only doing so because the FCC said ‘you can use it but you might not have it permanently’. And Dish also has a license for some of that band, but the license is not specific for 5G. So Dish is basically saying, ‘we have this license, but we don’t want to do satellite with it. We want to do 5g with it. Is that okay?'” Dano says.

The FCC Will Decide

He continued:

“Both companies have some rights to this band, but not like 100% exclusive rights to the band. And so it’s really up to the FCC to decide how the FCC wants to allocate this band. Does the FCC want to continue using it the way that Starlink has been using it?  But the FCC also has the authority to allow 5G to go into the band. And the FCC is currently reviewing this.”

Dano also said that  the fight between SpaceX and Dish is all about the future: “They both want to ensure that for consumers who will subscribe to their service in 2023, 2024, 2025 and 2026 they have enough band to offer them a quality service if they haven’t gone bankrupt.”

Musk wants to make Starlink, which provides access to the internet for residents of areas that are poorly served by the fixed and mobile networks of telecom operators, a global actor. 

SpaceX has already launched more than 2,400 Starlink satellites, with an overall goal of launching about 12,000. The standard antenna costs $549, plus $110 a month for the service. The company debuted a faster Starlink Premium service in February. The hardware costs $2,500, plus $50 shipping and handling costs, with a broadband subscription fee of $500 a month. 

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