As Predicted, Starlink Launches Broadband Usage Caps, Overage Fees

We've noted for a while that the laws of physics would prohibit Elon Musk's satellite broadband service from being truly disruptive at any real scale. Analysts had been quietly noting for a while that Starlink lacked the capacity to handle its projected user load. That recently resulted in obvious slowdowns, raising the question of when the company would inevitably examine throttling and usage caps.

That time has arrived. Last week hints began to surface that usage caps and throttling would soon be hitting Starlink users, who currently pay $110 a month (plus a $600 first month equipment charge) for what's usually sub 100 Mbps service.

This week Starlink unveiled more details about how the caps will work. Basically, Starlink users will now see a 1 terabyte monthly usage cap. Once that's exceeded, users will find their connection deprioritized" for the remainder of that billing cycle, with connection speeds throttled if they reside in congested areas. Users can pay $0.25 for each additional GB downloaded if they want to avoid the limits.

As with most broadband ISPs, Starlink insists this is no big deal because most people won't hit the limit:

SpaceX didn't immediately respond to a request for comment. But in an email(Opens in a new window) sent to customers, the company said the high-speed data caps will be enforced in December for customers in the US and Canada. The email adds that less than 10% of Starlink users exceed 1TB in monthly data usage.

In addition to the restrictions, the company has lowered its advertised speeds from an estimated 50 to 200Mbps, down to 20 to 100Mbps. The price will remain the same.

Musk wants to maximize revenue and keep the service in headlines despite these capacity constraints, so he keeps on expanding the potential subscriber base, whether that's a tier aimed at boaters (at $5,000 a month), the specialized tier aimed at RVs ($135 a month plus a $2,500 hardware kit), the aid to Ukraine, or the new plan to sell service access to various airlines to help fuel in-flight broadband services.

As things get more congested, you can expect more restrictions - especially if there are any delays in getting the second generation Starlink satellites launched at any scale. These inevitable restrictions are why so many telecom policy folks supported the FCC walking back subsidies thrown at Starlink, to instead focus on funding future-proof fiber networks with no such capacity issues.

Again, Starlink is great if you have no other options, can afford it, don't mind the year long wait for it, and don't care that the company can't answer emails. But Starlink can't really touch the scale of the US broadband problem (20-40 million without access, 83 million living under a monopoly), which is largely going to be fixed by creatively expanding fiber as widely as possible, then filling in much of the rest with 5G.