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Elon Musk Is Charging Starlink Customers Gigantic Bogus Fees Because Its Network Is Being Crushed by “High Demand” (www.yahoo.com)
submitted 3 months ago by to c/technology@lemmy.world
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[–] 12 points 3 months ago* (7 children)

This isnt a random usage fee, this is for areas they claim are too busy, so you gotta pay if you want to gain access.

Congestion pricing is the PC way to describe it.

Price gouging is the more honest term.

There was no world where SpaceX could support unlimited customers in a cell region.

You can charge a fixed rate and ration bandwidth during peak use.

Or you can charge a variable rate in order to maximize revenue during peak demand.

One maximizes utility while the other maximizes profit.

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  • [–] 5 points 3 months ago* (last edited 3 months ago) (6 children)

    Neither of those options would support everyone living in a high density urban area, bandwidth would drop to nothing and no one would want to buy it, and people generally hate inconsistent bandwidth, or random peak hour usage charges on their bill.

    Edit: Their overall bandwidth per cell is just too low to be able to support everyone in high density areas like that.

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  • [–] 5 points 3 months ago* (3 children)

    That's why dense urban communities prefer using ground fiber and big routing stations to cellar satellite, sure.

    But now we're talking about the real bandwidth capacities, not the pricing for connectivity.

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  • [–] 4 points 3 months ago* (2 children)

    I mean don't get me wrong, it's 100% pure capitalism to do something like, we can confidently service 1000 people per cell region and maintain our advertised service, but once we reach 950, we're going to charge super high fees to connect. They don't have to be doing what they're doing, but they saw a way to make money.

    Edit: And this is all assuming the congestion is even real.

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  • [–] 2 points 3 months ago* (1 child)

    I don't doubt the congestion is real, as consumption - especially data consumption - rapidly expands to fill its container.

    I might suggest that some of the early adopters and insiders are receiving subsidy rates in order to goose Elon's investor briefs on adoption. And the folks on the back end who are eating the exploding prices exist to pad Musk's proposed future revenue estimates.

    "We added 10,000 people a day for the last 30 days, even as we raised rates from $10/day to $100/day!" tells a very attractive story to investors without tipping your hand and revealing what the next 30 days will look like. But it also becomes a kind-of self-fulfilling prophecy, when it results in banks giving you another hundred billion dollars in low-interest credit to expand your network.

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  • [–] 3 points 3 months ago*

    They did exactly that with the new standby mode.

    You used to be able to pause your service for free. Then they changed it to $5/m but you got unlimited 256kb/s bandwidth and the dish would always be up to date. Just before the IPO they doubled that to $10/m and removed the ability to use it while in motion.

    I'd love to see how many people dropped the service after that 2nd price jump which wouldn't have been apparent until after the IPO. Both changes happened within a year.

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