A Follow-up to "Who Even Needs Undersea Cables for Internet Anymore?" A Follow-up to "Who Even Needs Undersea Cables for Internet Anymore?" Who Even Needs Undersea Cables for Internet Anymore? When I wrote about the obsolescence of undersea cables just months ago, highlighting how Starlink emerged as a lifeline during disasters in Vanuatu and Tonga, I knew we were witnessing a pivotal shift in global connectivity. Whats even more exhilarating is that I did anticipate the swiftness with which SpaceX moved to cement their dominance in this space. On September 8, 2025, Elon Musk's SpaceX announced a $17 billion acquisition of spectrum licenses from EchoStar, the largest telecommunications deal of the year and perhaps the most strategically significant move in the satellite internet revolution. This isn't just another corporate acquisition, it's the moment satellite based connectivity officially declared war on traditional telecommunications infrastructure. From Crisis Response to Strategic Domination In my previous piece, I described how Starlink's rapid deployment capabilities proved invaluable when natural disasters severed the fragile undersea cables that Pacific island nations depended upon. What seemed like an emergency backup solution has now revealed itself as something far more transformative i.e. the foundation of a new telecommunications paradigm. The EchoStar deal represents SpaceX's evolution from crisis responder to infrastructure architect. By acquiring AWS-4 and H-block spectrum licenses worth $17 billion ($8.5 billion in cash, $8.5 billion in SpaceX stock), the company has secured something that no traditional telecom giant possesses i.e. truly global, space based spectrum ownership. The FCC Probe That Changed Everything The backstory to this acquisition reads like a masterclass in strategic maneuvering. In May 2025, the FCC launched an investigation into EchoStar's use of its 2 GHz spectrum, with SpaceX aggressively advocating that these "chronically underused" frequencies should be opened to "new satellite entrants." What initially appeared to be regulatory pressure turned out to be the opening move in SpaceX's acquisition strategy. EchoStar, facing mounting debt and regulatory scrutiny, found itself in an impossible position. The company had missed approximately $500 million in interest payments, citing the FCC probe as a primary factor hampering its operations. SpaceX, meanwhile, had been systematically building the technical and financial case for why it could better utilize these spectrum assets. Beyond Emergency Backup - The Direct-to-Cell Transformation The real game changer isn't just satellite internet, it's SpaceX's Direct-to-Cell technology. With its new spectrum ownership, SpaceX can now operate this service on frequencies it controls entirely, rather than relying on partnerships with terrestrial carriers like T-Mobile. This means smartphones can connect directly to Starlink satellites without any ground infrastructure whatsoever. Consider the implications i.e. a single smartphone in the middle of the Pacific Ocean can now access high speed internet via satellite, with latency approaching that of terrestrial networks (currently around 25 milliseconds). The technology that once required specialized equipment and significant infrastructure investment is now accessible through the device in your pocket. SpaceX claims their next generation Direct-to-Cell satellites will have "more than 100 times" the capacity of current systems. When Starship begins deploying these advanced satellites in 2026, each launch could add 60 terabits of capacity to the network, more than 20 times what current Falcon 9 launches provide. The Tonga Test Case - When Traditional Infrastructure Fails The recurring internet outages in Tonga, with their undersea cable infrastructure facing an 80% probability of future disruptions, perfectly illustrate why the world needs this technological shift. Traditional submarine cables, despite carrying 99% of international internet traffic, remain vulnerable to: Natural disasters (earthquakes, volcanic eruptions)
Human interference (ship anchors, deliberate sabotage)
Geographic constraints (challenging routes)
Economic barriers (high installation costs, maintenance challenges) Natural disasters (earthquakes, volcanic eruptions) Natural disasters Human interference (ship anchors, deliberate sabotage) Human interference Geographic constraints (challenging routes) Geographic constraints Economic barriers (high installation costs, maintenance challenges) Economic barriers Starlink's satellite network faces none of these limitations. Satellites can be rapidly repositioned, capacity can be dynamically allocated, and coverage extends to areas where submarine cables could never reach. The Death of Geographic Monopolies Perhaps most significantly, this deal signals the end of geographic telecommunications monopolies. For decades, small island nations and remote regions have been at the mercy of whichever company controlled their submarine cable connection. A single cable cut could isolate entire populations for weeks or months. SpaceX's globally distributed satellite network eliminates this dependency. Whether you're in downtown New York or a remote village in Papua New Guinea, you're accessing the same underlying infrastructure. Geographic boundaries become irrelevant when your internet connection comes from space. The commercial implications are staggering. EchoStar's Boost Mobile customers will now have access to Starlink's Direct-to-Cell service, essentially turning every smartphone into a satellite communication device. This partnership model could rapidly expand to other carriers worldwide, fundamentally changing how mobile networks operate. The Convergence with Blockchain Infrastructure While SpaceX focuses on practical connectivity solutions, emerging projects like Spacecoin are pushing the envelope even further by combining satellite networks with blockchain technology. This convergence suggests we're not just replacing submarine cables with satellites, we're moving toward a completely decentralized internet infrastructure. The combination of SpaceX's ownership of critical spectrum assets and blockchain powered satellite networks could create a truly resilient, censorship resistant global communication system. For regions that have experienced internet shutdowns or heavily regulated connectivity, this represents unprecedented communications freedom. Challenges and Realities Despite this optimistic outlook, significant challenges remain. Current Starlink service still requires specialized ground terminals for high speed access, though Direct-to-Cell technology is rapidly eliminating this barrier. Latency, while impressive for satellite internet, still can't match fiber optic cables for certain applications. The astronomical costs SpaceX has invested billions in satellite production and launches mean this technology won't immediately replace all terrestrial infrastructure. However, for crisis response, rural connectivity, and mobile applications, satellite-based internet is becoming not just competitive but superior. Space debris and regulatory challenges also pose ongoing concerns. With over 7,600 Starlink satellites already in orbit and plans for tens of thousands more, managing this constellation while maintaining space safety requires unprecedented coordination. The Regulatory Chess Game - Adapt or Perish What will be particularly interesting to watch is how current telecom service providers in the Pacific region will lobby for regulatory compliance around Starlink services. The traditional playbook of trying to block competition through regulatory barriers is likely doomed to fail, especially when the alternative offers such clear advantages for isolated island nations. Instead of thinking competition, smart regional telecom providers should be thinking collaboration. There's still a significant niche they can capitalize on, but it requires a fundamental mindset shift: Infrastructure Synergies: Rather than viewing Starlink as a threat, telecom providers could partner on solar power micro grids and equipment co-location. Many existing telecom towers and facilities could serve dual purposes, hosting both traditional equipment and Starlink ground infrastructure. Infrastructure Synergies Fiber First Strategy: For high density areas and main islands, aggressive FTTX/FTTH deployment with competitive tariffs could still compete effectively with Starlink for bandwidth intensive applications. The key is pricing these services competitively rather than relying on monopolistic pricing. Fiber First Strategy Hybrid Service Models: Smart providers might become Starlink resellers or integrators, offering managed satellite services combined with local support, installation, and value added services that SpaceX doesn't want to handle directly. Hybrid Service Models The "if you can't beat them, join them" approach could create genuine win-win scenarios. Consumers get better connectivity options, telecom providers maintain revenue streams through new business models, and the region benefits from improved resilience and competition. Fighting this transition through regulatory capture is likely to backfire spectacularly when governments realize the strategic value of satellite independence. Looking Forward - A Multi Planetary Internet The EchoStar acquisition positions SpaceX not just as a terrestrial internet provider but as the architect of humanity's first interplanetary communication network. The same technology enabling Direct-to-Cell service on Earth will be essential for Mars colonization and lunar bases. When Starship begins regular flights in 2026, it will carry satellites specifically designed for these expanded capabilities. Each satellite will provide over a terabit per second of downlink capacity, more than 10 times current capabilities, while operating with advanced laser inter satellite links that reduce dependence on ground infrastructure. The Verdict - Tributary Transformation, Backbone Evolution Six months ago, I argued that Pacific islands no longer needed individual submarine cables. The SpaceX EchoStar deal proves this transformation is happening faster than anyone anticipated. We're not witnessing the replacement of the global internet backbone, we're witnessing the emergence of a hybrid model where satellites handle the expensive, underutilized, vulnerable "last mile" connections while the main fiber network continues to grow stronger. For regions like Vanuatu and Tonga, which have repeatedly experienced the fragility of individual submarine cable dependencies, this shift offers genuine liberation from single-point-of-failure connectivity. They can now access the same global backbone that serves major cities, just through a more efficient satellite route. The question is no longer whether individual island cables will become obsolete, but how quickly Pacific nations will abandon these expensive, underutilized, vulnerable connections in favor of satellite links to the backbone. With SpaceX now controlling critical spectrum assets and deploying next generation satellites at unprecedented scale, that timeline is accelerating rapidly. The age of individual island submarine cables is ending. The satellite-to-backbone era has officially begun. This piece is a follow-up to "Who Even Needs Undersea Cables for Internet Anymore?" exploring the ongoing transformation of Pacific island connectivity infrastructure. This piece is a follow-up to "Who Even Needs Undersea Cables for Internet Anymore?" exploring the ongoing transformation of Pacific island connectivity infrastructure. Who Even Needs Undersea Cables for Internet Anymore?

The $17 Billion Gambit - How SpaceX Just Rewrote the Rules of Global Connectivity

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