Elon Musk, enemy of the Canadian Internet

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

Starlink, like SpaceX and Tesla for that matter, is presented in any case as cutting-edge technology, targeting an industry that is trampling. The provider wants to globalize the distribution of Internet access by launching thousands of satellites into low orbit, all transmitting the same signal.

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

Musk is not alone either. Amazon, with its Kuiper project, has the same ambitions. More modestly, Ottawa-based Telesat also hopes 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 today as a telecommunications tool and therefore complies with the established regulations in this regard. In Canada, this basically means that an Internet Service Provider must be headquartered in Canada.

Starlink Canada

Los Angeles-based Starlink created Starlink Canada, which received the green light from the federal government in the fall of 2020 to roll out its service in the Canadian sky. 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 usage fee.

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

The American company is currently limited to targeting the northernmost regions of the country and poorly served by the large 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 soon 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,” one of them told the Toronto Star.

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

without comparison

Because obviously, for satellite internet to be that good, the point of comparison itself doesn’t have to be that good. Or maybe it’s too expensive. And until the impact of Ottawa’s investment of the $1.4 billion pledged to connect the entire country at high speed (by 2030) is felt, new providers like Starlink may play for a prominent place in the rural Internet. .

Current regional providers are, for the most part, 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 caused an increase in prices charged by wholesalers — Bell, Rogers and Quebecor, again — to small independent suppliers.

The other reason: the big providers 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, for the time being, compete with the high-speed service offered in the more populated regions of Canada, explains Desjardins Securities analyst Jérôme Dubreuil, interested in Canadian telecommunications. sector.

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

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

Longer term? The bets are open. After all, automakers were saying the same thing about Tesla just five years ago. From Ford to Mercedes-Benz, no one bothered to see the arrival of electric cars destined for a fringe market, because they were mistakenly seen as underperforming and overpriced.

The almost dithyrambic praise of Starlink’s early customers in Canada can be set aside for the time being if one imagines that they are the result of what might be called the Musk effect. But it would not be the first time that the entrepreneur has been relegated to the role of underdog… only to change the situation in his favor.

And this time, he has the Canadian Internet in his sights. What will people say about Starlink in five years?

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