SpaceX on Friday met with the UK minister for digital infrastructure, Matt Warman, a person with knowledge of the discussions told CNBC on Monday. The UK’s culture secretary confirmed on Friday that Starlink was being considered for getting internet to hard-to-reach communities in the UK.
On top of Project Gigabit discussions, SpaceX has also signed a deal with British telecoms company Arqiva to build ground stations and infrastructure to connect satellites to fibre networks and servers, a space industry insider told The Telegraph on Monday.
An Arqiva spokesperson declined to comment to Insider. SpaceX didn’t immediately respond to Insider’s request for comment.
If Starlink and the UK reach a deal over Project Gigabit, Elon Musk’s space company could benefit from government funding to accelerate its coverage in the country. In the US, Starlink won nearly $900 million from the US Federal Communications Commission (FCC) in December to deploy internet connection in underserved American communities.
The UK’s culture secretary Oliver Dowden told Sky News on Friday that Starlink was one of the best ways to deliver internet in hard-to-reach communities, though other alternatives were being considered, such as balloons or autonomous aircraft, he said.
But Starlink satellites or those from OneWeb – a UK satellite company that was rescued by the government from bankruptcy in November 2020 – are preferred options because their technology are already in use, Sky reported.
In this week’s episode of “Pitchfork Economics,” co-host Nick Hanauer points out that the United States doesn’t really have an industrial policy. Other nations intentionally establish suites of economic, regulatory, and fiscal policies which direct their industrial sectors into specific fields, focus manufacturing into new technologies, and discourage harmful corporate behavior such as environmentally unsound investments. Over the last 40 years, America’s leaders have largely left the industrial sector alone to govern itself.
That hands-off approach is responsible for some disastrous economic results for the United States. Case in point: Solar cells were created in the United States, and many of the world’s leading solar power experts live here, but Hanauer says that “at some point it became staggeringly obvious” to Chinese leaders that cheap and abundant solar cells “would be enormously useful to the economy and the world, and that having a national competence and advantage in making them would be a good thing.” They directed Chinese manufacturers toward “the goal of building scale and dominance in photovoltaic cells.”
Here in the United States, our leaders either didn’t grasp the growing importance of solar power in a world that was struggling to respond to climate change, or they simply believed that the free market would fill that void. The results speak for themselves: As Larry Beinhart notes for Al Jazeera, “seven of the world’s top 11 solar panel manufacturers are now in mainland China.”
The complexities of the free market
It should be clear by now that simply allowing the free market to blindly flail around in search of short-term profitability is no way to build an economic future. And America’s cultural insistence on record quarterly corporate profits is a big reason why our infrastructure has become a global laughingstock.
Hanauer and co-host Jessyn Farrell talk with Saule Omarova, the Beth and Marc Goldberg professor of law at Cornell Law School, who has formulated an intriguing new idea to guide American industrial policy even while honoring our national preference for fierce independence.
When it comes to building infrastructure in America, Omarova explains, “it’s really difficult to figure out which tasks specifically should be left to the private market and which tasks should be left to the government.” This leaves what she calls a “dead zone” where some of our most embarrassing failures as a nation have landed – our failure to get broadband and good medical care to rural areas, our inability to build the same kind of inter-city train network that Europe and much of Asia enjoys.
The NIA, Omarova says, would be “an institution that can step into that dead zone, and that is designed to be a hybrid” between the free market and the federal government. “It’s not hamstrung by the short-term profit obsession,” the way that shareholder-driven companies are, she explained. “It has longer time horizons and it has vast resources, and it has its eyes on the public benefit and the public interests first and foremost.”
“But at the same time, unlike the existing government institutions,” the NIA would be “not so constrained by the immediate vagaries of budgetary politics, so it can start working alongside other private market actors and other public government agencies in order to get those projects financed, planned, designed, and implemented.”
Blending government and free market perks
Just as the NIA would straddle the void between public ownership and private enterprise, Omarova says the structure of the NIA itself would need to be a unique blend of government and free market: While a federal board would oversee the system, “the actual operations will be conducted by its subsidiaries, the federal government-owned specialty charter corporations.”
So consider the solar cell example, in which China invested in an expensive and imperfect technology and eventually became the world leader in a burgeoning clean energy sector. The NIA could have directed American companies toward solar power through an aggressively targeted suite of tax incentives to encourage the building of manufacturing plants and the investment of research and development dollars.
The US government already performs this kind of incentivization through tax cuts – albeit in a much slower, more limited way. “But at the same time,” Omarova said, “why not have the NIA acting through one of its subsidiaries to become a co-investor, a controlling co-investor, or an equity holder in a company that actually does that?”
By giving the American people a seat at the boardroom table in exchange for taxpayer investments, the NIA might be able to direct manufacturing plants to Michigan, or West Virginia, or other economically depressed locations “where that plant will actually have far-reaching, very important collateral benefits to the economy and to the society as a whole.”
A renewed chance for rapid growth
By placing solar panel manufacturing plants in parts of the country that have been left behind over the last few decades, we’d see rapid job growth, renewed economic vigor, and the much-needed bolstering of infrastructure like clean water and good internet connection speeds.
Omarova’s idea doesn’t put government in the driver’s seats of corporations so much as it uses government as the pipes through which free enterprise flows, directing that economic energy to where it can do the most good.
The NIA is a complex idea, one that’s literally never been attempted in American history. The idea of investing in future-forward industries creates many opportunities for failure. But when we take a step back and see what 40 years of totally free markets has done to our global reputation as an economic leader, it becomes obvious that a big, bold idea is necessary if we’re going to save the United States from our own worst economic impulses.
Elon Musk warned against excessive regulations, called on executives to focus on their products and customers, and bemoaned candy companies’ lack of innovation at the WSJ CEO Council Summit this week.
The Tesla and SpaceX CEO also highlighted memes as a worrying source of misinformation, argued machines will eventually surpass humans in every aspect, and touted tunnels as an effective way to reduce urban traffic during the virtual discussion.
Here are Musk’s 12 best quotes from the interview, lightly edited and condensed for clarity:
1. “A lot of the time, the best thing that government can do is just get out of the way.”
2. “Rules and regulations are immortal and if we keep making more every year and do not do something about removing them, then eventually we’ll be able to do nothing.”
3. “It’s government’s responsibility to establish the rules of the game and ensure that those rules are properly enforced. Where I think government does not do a great job is when they want to not just be a referee on the field, they want to be a player on the field.”
4. “The reason that government is often the worst at responding to the customers – being the people – is that they are a monopoly that can’t go bankrupt or usually cannot go bankrupt.”
5. “Big Candy has consolidated into like three companies and they also own all the dog food and the baby food. When’s the last time there was some good candy? What’s the forcing function for a new candy bar? I haven’t seen one in ages.”
6. “Spend less time in meeting rooms, less time on PowerPoint presentations, less time on a spreadsheet, and more time on the factory floor, more time with the customers. Step back and say, ‘Is your product as awesome as it could be?’ Probably not. What could you do to make it great?”
7. “Just be an absolute perfectionist about the product that you make, the service that’s provided. Seek negative feedback from all quarters, from customers, from people who aren’t customers. Ask them, ‘Hey, how can we make this better?'”
8. “There might too many MBAs running companies. There’s the MBA-ization of America, which I think is maybe not that great.”
9. “The troops are gonna fight a lot harder if they see the general on the front lines than if they think the general’s in some cushy situation. Nobody bleeds if the prince is in the palace. Get out there on the goddamn front lines and show them that you care and you’re not just in some plush office somewhere.”
10. “We need to go 3D in cities in order to alleviate traffic congestion, and probably the best way to do that is with tunnels.”