Capacity Crunch Causes Musk’s Starlink To Sock Users With $100 ‘Congestion Charge’

Analysts (and Musk himself) had beenquietly notingfor a while that Starlink satellite broadband service would consistently lack the capacity to be disruptive at any real scale. As it usually pertains to Musk products, that analysis was generally buried under product hype. A few years later, and Starlink users are facingobvious slowdownsand a steady parade of price hikes that show no signs of slowing down.

Facing these growing congestion issues, Starlink has now started socking users in some parts of the country a one-time $100 congestion charge":

In areas with network congestion, there is an additional one-time charge to purchase Starlink Residential services," aStarlink FAQsays. This fee will only apply if you are purchasing or activating a new service plan. If you change your Service address or Service Plan at a later date, you may be charged the congestion fee."

On the plus side, Starlink claims that it will also give some customers $100 refunds if they live in areas where there's excess constellation capacity. But that's something I'd need to see proven, given, well, it's a Musk company, and Starlink's customer service is basically nonexistent. Historically, they've been unable to even consistently reply to emails from users looking for refunds.

While low-Earth orbit (LEO) satellite is a significantly faster upgrade to traditional satellite broadband, the laws of physics remain intact. There are only so many satellites in the sky, and with Musk constantly and rapidly boosting the Starlink subscription base to boost revenues (Starlink just struck a deal with United to offer free WiFi, for example) you're going to start seeing more and more network management restrictions you won't see on fiber, or even traditional 5G cellular networks.

For a while Starlink flirted with usage caps, but correctly realized that such caps don't actually do much to manage congestion (something we've had to point out repeatedly over the years). So they've generally shifted to either price hikes or network management tricks to try and ensure that users consistently see relatively decent performance.

But the more militaries, consumers, governments, airlines, and boat owners that sign up for service across a limited array of LEO satellites, the worse the problem will get, resulting in ongoing complaints about degraded Starlink network performance over the last several years. And the more problems, the more weird restrictions that reduce the utility of the connection.

It's a major reason why the Biden FCC reversed the Trump FCC's plan to give Musk a billion dollars to deliver satellite to some traffic medians and airport parking lots, instead prioritizing taxpayer funding toward more future-proof, and less capacity constrained, fiber deployment efforts.

Starlink is a great improvement for a niche segment of off-the-grid folks who have no other option. But at $120 a month (plus hardware costs) it's not particularly affordable (the biggest current barrier to adoption), and even with a fully launched LEO satellite array, capacity will always be an issue. Starlink was never going to be something that truly scaled, but that gets lost in coverage that treats Starlink as if it's single handedly revolutionizing telecom connectivity.