Musk's Starlink Curbs on Ukraine Expose Scarcity of Satellite Internet Rivals

Ukrainian officials accused SpaceX on Oct. 14 of undermining the country's defense after speed limits were imposed on Starshield, the company's government-grade satellite network, cutting internet connectivity for drones and aircraft flying faster than 100 mph. A Ukrainian senior commander told The New York Times the restrictions cost his unit more than $1 million and delayed missions by three days.

Accountability dispute

Musk and President Donald Trump, both critics of Ukrainian President Volodymyr Zelenskyy, have each avoided accountability for the disruptions. On Tuesday, The Wall Street Journal reported that Musk personally ordered the changes and discussed them with Trump beforehand. Trump said Wednesday he "was not involved." SpaceX describes Starshield as a "secured satellite network for government entities" that "leverages Starlink technology." CNBC reached out to Musk, SpaceX senior vice president Tim Hughes and a company spokesperson and had not received a comment before publication. SpaceX executives did not address the issue on this week's earnings call.

Calls for an investigation

A bipartisan group of U.S. lawmakers has called for an investigation, with some urging Musk to testify under oath. Sen. John Cornyn, R-Texas, told CNBC he does not believe Musk would have acted "without at least the acquiescence of the White House," calling the throttling "frankly shameful." Rep. Pramila Jayapal, D-Wash., wrote on social media that "no billionaire, especially one that gets massive contracts from our government, should have the power to unilaterally decide to shut down communications and weapons during a war." Robert Weissman, co-president of watchdog group Public Citizen, called the situation an "extreme danger" raising antitrust and security concerns, saying "no person should have that ability or power."

Few alternatives

Governments and companies seeking an alternative have limited options. Amazon's Leo has been seven years in the making and has only 390 satellites in orbit, against more than 11,000 for Starlink, according to data tracked by astronomer Jonathan C. McDowell. SpaceX COO Gwynne Shotwell said Starlink connectivity is live in 174 countries. Blue Origin, Jeff Bezos' space company, unveiled a service called TeraWave in January, targeting a first batch of satellites in the fourth quarter of 2027. France's Eutelsat has more than 600 satellites in orbit, and its stock surged 23% on Oct. 14. The European Union is building IRIS2, but first launches are not expected until 2029.

Independent satellite consultant Christian Freiherr von der Ropp said most planned systems are unlikely to "come anywhere close" to Starlink in capacity, coverage, resilience or cost, and that Eutelsat's terminals are poorly suited to the battlefield. SpaceX's launch business, which has carried satellites for competitors, adds to its advantage as it phases out commercial Falcon 9 rides while testing Starship.

Political fallout

Zelenskyy said Wednesday he met Norwegian officials and the defense company Kongsberg to discuss air defense and "launching work on new satellite communication capabilities for our warriors." Relations have soured since Musk won praise for supplying Starlink terminals early in the war. Musk previously ordered engineers to shut off Starlink over Crimea to thwart a Ukrainian attack on Russian warships, according to Walter Isaacson's 2023 biography; Musk disputed the account. Canada has cut ties with Starlink, and officials in India and Taiwan have expressed wariness. Delta Air Lines chose Amazon's Leo, prompting Musk to post that CEO Ed Bastian would "lose his job"; Bastian denied a reported comment about Musk.

Source: CNBC.