Amazon gets FCC approval for satellite broadband, pledges $10 billion for construction

This past week, the Federal Communications Commission (FCC) approved a plan for Amazon to build a low earth orbit (LEO) satellite broadband network.  Amazon announced it would spend $10 billion dollars to build the network via blog post on the same day FCC approval was announced.

Project Kuiper, announced last year, will put 3,236 satellites into orbit, providing global high-speed broadband services. Announcement of FCC approval came on July 30, 2020 by a unanimous 5-0 vote “with conditions.”  Amazon will have to work well with other satellite operators on frequency usage and interference issues and didn’t get the waivers it requests for certain FCC rules, both typical results from petitions for frequency usage.

Amazon wasted no time in announcing FCC approval on a company blog post, touting deployment of Project Kuiper as a way to expand internet access to households and communities around the country.

“We have heard so many stories lately about people who are unable to do their job or complete schoolwork because they don’t have reliable internet at home,” said Dave Limp, Senior Vice President, Amazon. “There are still too many places where broadband access is unreliable or where it doesn’t exist at all. Kuiper will change that. Our $10 billion investment will create jobs and infrastructure around the United States that will help us close this gap. We appreciate the FCC’s unanimous, bipartisan support on this issue, and I want to thank Chairman Pai and the rest of the Commission for taking this important first step with us. We’re off to the races.”

For followers of satellite broadband projects, the $10 billion spend on Project Kuiper is essentially a microphone drop. OneWeb spent $3 billion before it ran out of money and is currently coming out of bankruptcy filings with the need to raise at least another $3 billion to complete its network. SpaceX has launched more but smaller, less capable satellites and is in the process of raising another $1 billion for work on its Starlink broadband effort and work on its Starship large reusable rocket.

Amazon had almost $12 billion in net income in 2019, so it could easily spend more than a billion per year on Project Kuiper and not break a sweat.  OneWeb, SpaceX, and Telesat will all have to raise large sums of money to build and complete their respective networks to the tune of billions. Does Amazon’s investment give private investors to join the fray or does it deter them from jumping into a crowded market?

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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