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Starlink is not a charity, but the war in Ukraine is not a business opportunity • londonbusinessblog.com

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What seemed like a selfless act of technotopism earlier this year, the widespread deployment of Starlink terminals in Ukraine, has soured as SpaceX and governments disagree over who should ultimately foot the bill for this unprecedented aid campaign. Some expect Elon Musk – one of the richest men in the world – to cough, while others say the world’s richest military should, too. Both Elon Musk Now Says Starlink Will Continue To Provide Free Internet To Ukraine Elon Musk Now Says Starlink Will Continue To Provide Free Internet To Ukraine. Claims have their merits, but this game of financial chicken will cost Ukrainian lives.

Update: Musk tweeted that Starlink “will continue to fund the Ukrainian government for free for now”, despite being a loss. This secures the service for the present, but is clearly not a long-term solution:

The effort began in late February, just days after Russia invaded Ukraine. Musk said Starlink terminals were “on the way”, but gave few details. Many took this minimal, rather promotional approach to signify what it clearly means: that SpaceX provided the terminals themselves, either for free or with some understanding of their purchase.

The latter proved to be the case when it turned out that the US Agency for International Development had paid for some, the Polish and other European governments for more, and several armies and NGOs contributing to the cost of transportation, installation and apparently the monthly costs for the service itself. USAID described “a series of stakeholders” who offered an initial wave of support totaling about $15 million at the time.

But the costs were not one-time. Musk recently tweeted that 25,000 terminals have been deployed in Ukraine, five times the original shipment — thousands destroyed in the fighting and more are needed. The connectivity supposedly costs $4,500 per month for the highest level of service. Go by estimates noticed by CNNthat works out to about $75 million per month in ongoing charges.

Some understandably questioned the wisdom of relying on this new and unproven technology on a battlefield, but reports from the country’s military suggest it was very useful. The fact is that the ability was accepted in the spirit it was offered and used to the limit, but the length and scope of the war has meant that the situation around Starlink has evolved beyond its original scope.

It’s true that SpaceX cannot be held entirely responsible for tens of millions of dollars in fees, free service, or lost revenue (however the money is to be defined). But there’s no point in playing the victim either: they opened these eyes with the intention of providing an expensive and essential service in a war-torn country, apparently with no real plan to cover the costs.

On the other hand, the governments also caught up with this. They couldn’t possibly have expected SpaceX to cover the cost of the hardware and software alone, or if they had, they should have gotten it in writing. But if they’ve funded some of it, does that mean they’re doing everything they can?

Meanwhile, the Ukrainian military has come to rely on the service, and they are right in saying that no matter what happens, whoever has to write an IOU, the terminals must remain standing – otherwise soldiers defending their country will be in immediate and be immediately endangered.

This 3-way impasse has no easy solution, so let’s start with what we know needs Happening: Starlink connectivity must continue to exist in Ukraine at a nominal cost to them, not forever, but indefinitely. Any other outcome is too disastrous for everyone involved.

So the internet stays on. Who pays it? If SpaceX wants someone to take their request seriously, it has to play ball, and that means transparency about the real costs and payments involved. It goes without saying that Musk needs to stop his obnoxious, narcissistic antics – there’s too much at stake to indulge in his usual selfishness.

Taxpayers in a dozen countries have already paid for it and will likely continue to do so for months, if not years. What are the actual costs? $4,500 per terminal for access seems excessive in the first place — that’s the retail rate for early adopters, not a bulk rate for government partners in a life-saving operation. The Pentagon may not be a model of thrift, but to charge full price in this situation is inappropriate. (Not to mention that this is probably the best possible PR the company could get as it tries to jack up demand for its true consumer service. Money can’t buy this kind of exposure.)

Governments also need to dial in and be determined about what can and cannot be provided as part of the aid package. Ukrainian officials would no doubt be thrilled if every available Starlink terminal were shipped to the country the next day, but that is not possible, as other forms of aid that would be useful are not possible, for example certain military assets that are too expensive or are difficult to save.

The cost of supporting Ukraine’s defenses is high, and the US is spending billions on that cause. How much of that money is earmarked for Starlink connectivity? Pick a number and start negotiating. Is it $10 million a month? $20 million? What do those costs depend on, how are they tracked?

SpaceX can take that amount and provide an agreed level of service and hardware. While everyone appreciates the quick move on this in February, a few hasty phone calls and “we can make that happen” talks don’t make a long-term plan to cover the cost of an implementation that has grown into hundreds of dollars worth of millions of dollars and countless Ukrainian lives.

Like any compromise, it will make everyone a little unhappy – but it won’t leave anyone disconnected, disturbed, or dead. This complicated and difficult situation is the result of poor preparation and communication by an ever-changing group of stakeholders. What SpaceX and its government partners need is not finger pointing, but transparency and commitment.


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