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modeless 8 hours ago

"SpaceX is really good and it's hard to compete with them" is not an economic reason for it to be winner takes all. Economic reasons would be, for example, regulations that either explicitly or implicitly prohibit others from competing, as are present in many terrestrial ISP markets. Some way for SpaceX to corner the market for some essential resource like spectrum or orbits and exclude competitors that way.

michaelt an hour ago | parent | next [-]

I'm no economics expert, but I gather certain industries are known as 'natural monopolies' https://en.wikipedia.org/wiki/Natural_monopoly

I don't know what the precise defining lines are, but I can certainly see how you'd make more money running an electricity cable to a home with no electricity, than running a second cable to a home that already had an electricity supply in place.

And Wikipedia says "frequently occurs in industries where capital costs predominate [...] examples include public utilities such as water services, electricity, telecommunications, mail, etc" - starlink does sound like capital-intensive telecommunications.

Of course, even if nobody cares to take on Starlink in the broadband satellite internet market, there are a bunch of incumbent cable and cell phone companies. So it's not like starlink are on course to an internet access monopoly.

cjblomqvist 4 hours ago | parent | prev [-]

Vertical integration is definitely one. It's such a big factor it can cause regulators to break up a company. See Google/Chrome as an example from last week.

modeless 3 hours ago | parent [-]

"SpaceX is vertically integrated" is also not an economic reason for the space ISP market to be winner takes all. Vertical integration doesn't cause breakups. Anticompetitive behavior causes breakups, with or without vertical integration. And vertical integration is not some kind of cheat code to suppress competition. It can be a business advantage but it can also easily be a disadvantage.