Editor's note: The first "space race" kicked off in the 1950s. Now, Stansberry Venture Technology editor Dave Lashmet says we're seeing the next space race... and it could revolutionize how we send and receive data. In today's Masters Series, adapted from the July 2025 issue of Stansberry Venture Technology, Dave reveals the race for "Internet lasers"...
The Next Space RaceBy Dave Lashmet, editor, Stansberry Venture Technology The space race started with a "beep." On October 4, 1957, the Soviet Union launched the world's first artificial satellite into space. Sputnik 1 weighed 184 pounds... orbited Earth every 90 minutes... and emitted a series of "beeps" while passing overhead. Radio operators on the ground quickly played the broadcast around the world. The message stoked America's worst fears. The Soviet Union had beaten us into space and was winning the arms race to have superior technology. The U.S. launched its own satellite and created NASA to focus on space exploration a few months later. But the Soviets continued to lead the way by sending the first person into space and orbit around the Earth. So on May 25, 1961, President John F. Kennedy challenged the U.S. to be the first to send a man to the moon. And on July 20, 1969, Neil Armstrong became the first person to walk on the moon. The space race sparked innovation in everything from computers to medicine to homebuilding and food safety. Solar panels, artificial limbs, infrared thermometers, digital photography, and GPS are just a few of the advances we've seen thanks to the space race and NASA. Today, we're seeing the next space race... and it could revolutionize how we send and receive data. You see, Europe, China, the U.S. Space Force, and companies like EchoStar (SATS) and SpaceX are all building their own low-Earth-orbit ("LEO") satellite networks to provide high-speed Internet from space. SpaceX is one of the world's best-known space companies. Its reusable Falcon rockets revolutionized space flight by radically cutting its cost and increasing the pace of space launches. And its Starlink constellation has brought the Internet to tens of thousands of folks in remote areas. Starlink uses thousands of satellites in LEO to beam the Internet from space to anyone who buys the right satellite dish and subscribes. SpaceX's approach has been quantity over quality. Instead of a single 10-ton, billion-dollar satellite, SpaceX built and launched more than 9,000 500-pound satellites into orbit.
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In practice, each Starlink satellite is like a 4G cellular tower floating in space. It uses solar panels and batteries for power, some station-keeping gear, and an ion-drive engine. But each satellite can only serve – at best – a few thousand users. By design, Starlink must have a very narrow focus for its antennas. We figure each of these 9,000 satellites look down on an area that's 1.5 degrees by 1.5 degrees – a moving box that's 65 miles per side. So Starlink works great on land, especially in remote areas. But in populated areas like New York City or Washington, D.C., there can be far more demand for Starlink than supply. A second problem for Starlink is that around 70% of Earth's surface is covered in water. Once a Starlink satellite is 65 miles over the ocean, there's no downlink station it can reach. At least, that was true for Starlink's v1 satellites. In 2018, SpaceX received approval from the U.S. Federal Communications Commission ("FCC") to use the V-Band of the wireless spectrum. V-Band has billions of waves per second – beyond ultrahigh frequency – so you can send billions of bytes wirelessly. But V-Band is disrupted by weather. So it doesn't work on Earth. That's why phone companies use the C-Band. Still, V-Band is ideal for SpaceX's Internet in space because above 50,000 feet, there are no clouds. So nothing interrupts the V-Band there. In 2022, SpaceX modified its Starlink constellation plan to use V-Band with its v2 mini satellites. The FCC gave SpaceX until July 2027 to launch these satellites and fully use the V-Band. Further, the FCC said SpaceX needed to launch 50% of these new V-Band satellites by July 2024. SpaceX needed to use V-Band spectrum or lose it. So that's what SpaceX did. In 2023, SpaceX launched 43 missions to put V-Band v2 mini satellites in orbit, with up to 23 satellites per launch. That's more than 900 satellites. Since January 2024, SpaceX has been launching hundreds more v2 mini satellites with V-Band radios, plus a new antenna that can reach T-Mobile's (TMUS) spectrum. Since July 2024, these satellites have been used by Hawaiian Airlines to offer free Internet connectivity to its passengers over the Pacific Ocean. However, Hawaiian Airlines doesn't have many flights per day that cross the Pacific Ocean. So it's a low bar with user demand. But in principle, it's Internet access from space. And it's a lot more bandwidth for users than competitor satellite-communications company Iridium (IRDM) can supply with its LEO satellite to LEO satellite radios in space. Iridium's network is built for calls, not for Internet streaming. However, SpaceX founder and CEO Elon Musk wants to do better than that... He wants his network to offer high-speed streaming across the globe with lasers. You see, space lasers are superior to radios for moving military data because lasers can't be jammed or intercepted. But you can still encrypt space laser communications. You can even encode your data within satellites. And lasers can move a lot more data. They can be the backhaul network for the entire Internet. A space laser communications network has broad applications in supporting Internet access over open oceans for cruise ships and transatlantic or transpacific flights, plus military applications. That's why Musk claims his space Internet is "laser powered." But in reality, this network is powered by the V-Band, not lasers. As SpaceX told the U.S. Government Accountability Office in February 2025, connecting space lasers is very difficult. It's because Starlink's satellites are not optimized for that. So for the time being, Starlink only uses lasers to point a satellite's V-Band antennas to the next satellite. You don't have to take my word for this... SpaceX is part of a giant U.S. Space Force project called Proliferated Warfighter Space Architecture – which at least so far, does not work. The big idea is to create secure laser communications in space from a lower orbit. The project uses lots of satellites, not one big one in geostationary orbit ("GEO"). This makes the system more resilient and more expensive. Overall, the Space Force will spend $35 billion on this project. But there's better technology out there that can meet global demand for high-definition streaming on NATO+ military drones, plus Internet on cruise ships and transoceanic flights. One small company has a first-mover advantage in this space. And its constellation will cost more like $3.5 billion. You have to love big government programs. Ten times the price? That's a fine use of your tax dollars. Still, it presents an opportunity for investors as the next space race heats up. Good investing, Dave Lashmet
Editor's note: Dave has found multiple winners in the aerospace and defense sectors. Now, he believes he has found another one in the satellite build-out. But it's not the SpaceX IPO. It's a smaller, little-known company tied to DARPA's "Project Blackjack" that could serve as a critical component in transmitting data to and from satellites. And this is the last time that Dave is making a public warning like this. Get the full details on June 4 and hear how you can get positioned to profit from this new shift in the Internet infrastructure. |
