There is a strong Liberal case for nationalizing Starlink
And it's not merely on national security grounds
Elon Musk’s decision making has embroiled the satellite internet company he runs, Starlink, in substantial controversy regarding the war in Ukraine. Musk refused to extend geographically Starlink service, which has been used by the Ukrainian armed forces for navigation and communication, so that it could be used for navigation during a Ukrainian operation to attack Sevastopol in occupied Crimea, where a major part of the Russian Black Sea fleet is based. Musk’s claim that he did so to prevent a broadening of the conflict - suggesting he took it upon himself to determine the terms of escalation - has raised eyebrows. It has also made a worldwide Starlink outage that occurred at the same time as a successful Ukrainian strike on the same harbor on the night of September 12-13 appear suspicious in the eyes of many Ukrainians and their supporters, though the company maintains the issue was caused by a network outage.
The response has focused on national security; the Senate Armed Services committee has decided to investigate the issue further. SpaceX, the Musk-controlled firm which operates the Starlink system, is heavily dependent on government contracts - and the US government is heavily dependent on SpaceX for satellite launch capability. This has led some to argue that Starlink’s network should be nationalized on the grounds of national security. Elon Musk’s business dealings with China and apparent antipathy towards the possibility of Taiwanese independence make a strong case for this. However, liberals might be understandably concerned by such a move - after all, ‘national security’ is the most classic grounds for seizing property and power by the government, to the detriment of markets and civil society. These fears are valid, but one needn’t fall back on the excuse of national security to make the case for nationalizing Starlink.
Publicly Owned Communications Infrastructure
Indeed, the case for public ownership of communications infrastructure, which Starlink essentially is, is long established in the history of Liberal thought. In delineated the distinction between social and individual (what we would call market based) functions in society, Henry George argued that “Society ought not to leave the telegraph and the railway to the management and control of individuals; nor yet ought society to step in and collect individual debts or attempt to direct individual industry.” The idea of an individual (and with a majority decision making stake in SpaceX, Musk is able to act as an individual more than most CEOs) would have control over such an expansive and necessary piece of infrastructure was obviously an invitation for corruption, as George saw it. Not only did such a massive piece of the economy stand to produce monopoly profits (the main concern for modern anti-trust regulators today), but the concentration of power was in itself seen as a grave threat to democracy and individual liberty.
The development of the first telegraph lines in the United States was indeed somewhat analogous to that of the SpaceX satellite network that enables Starlink. Authorized by the Telegraph Act, private firms were contracted to expand existing telegraph networks from the East Coast and California to make one transcontinental telegraph line. And, like space exploration, the usefulness of telegraphs was both civilian and military, such that during the Civil War the Union both built its on telegraph lines and commandeered privately operated ones to ensure an advantage in wartime communication.
The Economic Argument
But beyond military strategy, telegraph systems were widely viewed as natural functions of government because they were a natural monopoly. Henry George listed the telegraph among “businesses which in their nature do not admit of competition”, and for reasons readily understandable to any economist. Running two parallel railroad tracks run by different companies would be ruinously inefficient for most routes, because the marginal cost of moving an additional passenger falls precipitously once the fixed costs are taken care of - a situation contemporarily referred to as a ‘natural monopoly’. Telegraphs obviously operated on the same principle - it was much easier to expand the capacity of an existing network than build a competing one.
Starlink seems like it may well operate in a similar way. While the need for additional data capacity means that the marginal cost per subscriber is unlikely to fall as quickly as that of say a bridge or a cable company, there is nonetheless an immense advantage to scale - after all, it takes an enormous investment to build up a constellation of satellites capable of offering Starlink-level coverage. The relatively slow pace of competitors to the US Global Positioning System is strong evidence that even in these strategically important sectors, true competition is unlikely in the medium term.
And it may not be practical to have multiple competing constellations. SpaceX hopes to put thousands of satellites in orbit, and a potential competitor would need as many to truly compete. However, there is a real danger that this many satellites becomes an ungovernable mess and interferes the future space exploration as rapidly moving satellites endanger one another in orbit and block the launch of competitors with their physical presence. The possibility that this crowding leads to collisions, debris, and more collisions in a disastrous feedback loop is called Kessler Syndrome, named for a NASA scientist who as early as 2009 warned of the danger of falling into such a scenario. Some manner of satellite orbit regulation will likely be necessary to avoid this outcome and manage the obvious externality presented by space born debris.
Two options
This leads to two possible options: regulating satellite launches (the majority of which now are undertaken by SpaceX) or nationalizing the largest satellite companies. Many will suggest the former, uncomfortable with the implications of the government taking so active a role in an important industry. But I would argue that the connections between SpaceX (or any company that takes its place) and the government will necessarily be so close - on the side of SpaceX’s revenue as well as regulation - that it is cleaner and wiser simply to nationalize the company altogether, or run it as a public corporation like the Postal Service. The potential for opaque corruption and undue influence peddling between SpaceX and the US government is high enough to justify nationalizing the company even independent of its national security importance - add that in, and the best choice becomes even clearer. A publicly owned satellite communication company, purchased from its current owner at a fair price, is the best solution to the dilemmas presented by this advancing technology.