Starlink: Saviour of rural connectivity or threat to Canadian sovereignty?

A group of academics is warning that Starlink could be a trojan horse, providing internet connectivity to remote regions via satellite but seriously affecting Canadian sovereignty, while one internet service provider deploying Starlink’s bandwidth dismisses that idea. Starlink is a subsidiary of Space Exploration Technologies Corp. (SpaceX) which is in turn owned by Elon Musk, the world’s richest man. It has been providing satellite internet services in Canada since 2019. Dwayne Winseck, a professor at Carleton University in Ottawa, produces an annual report on global media and the internet concentration. The 2024 study features a section on Starlink written by Carleton Ph. D. student Peter Garland, with contributions from Winseck and from University of Alberta professor Rob McMahon. The American company has made great inroads in Canada over the past half-decade. “By 2023, it reached 300,000 subscribers and estimated revenue of $420 million, which was equal to a 2.6 per cent share of the national internet access market based on revenue (or 1.7 per cent by subscribers),” the trio state. “Consequently, it is now the sixth largest ISP in the country, just after Cogeco and ahead of Eastlink.” In July 2024, the company said in a social media post it had more than 400,000 customers in the country. It is charging $140 per month for residential service. Starlink has outperformed Xplore Inc. (formerly Xplornet) as a supplier of access. Xplore has seen its numbers plummet from 400,000 subscribers in 2019 to 160,000 in 2023, according to the Carleton study. The other major competitor, Telesat Inc., will not have its Lightspeed low earth orbit (LEO) service ready to go until next year. Further limiting the market is that Telesat is focused on business-to-business service while Starlink is both B2B and business-to-consumers. The authors worry about putting too much economic power in the hands of a foreign-owned provider while Canadian operators are struggling. Winseck concedes that the SpaceX firm is filling a need for unserved or underserved regions. There is also a great demand for the service, he says. “I think the problem lies in a couple of areas and one is that Starlink’s success, while serving much needed communities, poses the possibility that it could carve out a short-term monopoly for itself, if in fact Xplornet continues to go into its kind of death spin and Telesat’s Lightspeed doesn’t get up and running in 2026,” he tells The Wire Report. Competition should be the goal, rather than restricted markets, the study argues. One company that is happy with Starlink is SSi Canada, an independent competitor which buys its capacity from the American outlet. Much of its operations are in the north. President and founder Jeff Philipp is amazed by the cost savings realized since adopting Starlink. SSi used other providers before, including Telesat, but they did not have the capacity that Starlink does, he notes. “Capital costs per terminal went from a half a million to $5,000. Operational costs dropped by an equivalent amount in terms of power,” he tells The Wire Report. “Satellite capacity costs dropped significantly which meant we could offer a better price for consumers.” “Starlink provides a huge benefit not only to the operator, in terms of a better backbone, but it also provides a better service to the consumer,” Phillipp adds. READ MORE: - Champagne rebukes Tories for Musk connectivity query; Telesat hires retired brigadier-general - SpaceX launches satellites for international coverage An independent telecom analyst agrees with the SSi chief. “In many cases there isn’t another viable option for people to provide the amount of bandwidth or speed that people need,” Jason Presement said in an interview. “It’s a fairly straightforward solution, you take it, you plug it in, you go," says Presement, who worked for Calix and Juniper Networks before starting his own company. The Carleton study concedes the necessity of using the foreign provider. “Given the decades-long failure to close the rural divide, Starlink provides our politicians with a lifeboat,” Garland, McMahon and Winseck state. But the troika worries that Musk will seek to have influence in this country. “What happens, for instance, if the man with the ‘On/Off’ switch and control over the LEO technology stack were to object to, for instance, CRTC regulations with respect to contributions to the Universal Broadband Fund, information disclosure, and the need to consult with Indigenous communities?” the report wonders. Consumers do not worry about the politics of their provider, Phillipp of SSi says. They want good, reliable service at an affordable price. Presement has a simple solution for those who might be disturbed by the political leanings of Musk, who has been appointed an advisor to incoming American president Donald Trump. “You can press the big ‘Off’ button anytime you want,” he offers. But Garland, McMahon, and Winseck sound the alarm about SpaceX’s owner. “Musk has been very vocal about his disdain for the Trudeau government, and responsive to calls from Pierre Polievre to slap a ‘state-owned broadcaster’ label on the CBC,” the report concludes. “Of course, he can have his personal political preferences, but with the amount of political power he has and seeming eagerness to wield it to get what he wants, it is right to ask if consumers getting a good deal from Starlink is, in fact, a good deal for Canada.” Winseck elaborated on that thought while talking with The Wire Report. “The idea that tech companies can do as they please and treat democratic governments’ policy framework as an afterthought, as something that they take or leave depending on how they feel about the government of the day, it’s a huge problem,” he explains. ppark@thewirereport.ca

Starlink: Saviour of rural connectivity or threat to Canadian sovereignty?

Telecom |
By Paul Park
| January 17, 2025

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Starlink: Saviour of rural connectivity or threat to Canadian sovereignty?

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