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> if you don't increase capacity all you are doing is charging an arbitrary price to implement priority This sort of logic, followed to its conclusion, implies

> if you don't increase capacity all you are doing is charging an arbitrary price to implement priority This sort of logic, followed to its conclusion, implies that nobody should charge for variable costs before they have actually been incurred, even if said costs are 'chunky'. For example, it implies that TSMC shouldn't charge a customer (Apple, let's say) more for its large order, unless TSMC has already broken ground on a new fab.

foobarqux 3y ago
You would be right if 1. there were any reason to believe that Starlink would be increasing capacity 2. the hundreds of millions of dollars of premium were "reasonable" to build that increased capacity. But I don't see much sign of increased capacity (they may have built an extra ground station somewhere) certainly not anywhere near hundreds of millions of dollars worth. And I'm not even sure it is possible to increase capacity: The constraint is probably the satellite to ground bandwidth which you can increase by adding satellites but not in a specific area because they are LEO.
- smallnamespace 3y ago
  I think Starlink is justified in charging more for higher bandwidth usage even if they have not increased capacity, and have no current plans to do so. In another context, it's fair that I should pay 10x more for 10 diapers than one diaper. This is true even if the diaper company has no immediate plans to make another diaper factory. Price here is a signal to allocate scarce resources — in this case, the resources and labor that went into the diapers, as well as the amortized cost of the factory needed to make them. Is Starlink special and thus subject to pricing rules that other businesses are not? If not, is it a special case simply because it's Ukraine? If the latter, it'd be more honest to simply say: Ukraine is under attack and needs a helping hand. Starlink is uniquely positioned to help and ought to pitch in out of the goodness of their own hearts. Digging into their cost structure is really a diversion from the actual argument, which is that we feel they have a moral duty to help.
  - foobarqux 3y ago
    > In another context, it's fair that I should pay 10x more for 10 diapers than one diaper. This is true even if the diaper company has no immediate plans to make another diaper factory. Bandwidth is different, it doesn't cost any more to supply 1 bit or 10 bits. Nearly all the cost is building the pipe. Put another way, in the Starlink case there isn't 10x more cost to them to provide increased usage if they aren't building more capacity. > Price here is a signal to allocate scarce resources — in this case, the resources and labor that went into the diapers, as well as the amortized cost of the factory needed to make them. Not in the Starlink case. What is the allocation being made? Price-priority rationing has no purpose here because the government already knows who it wants to have priority. And you said that inducing investment is irrelevant so there is no use of a price signal for that (and the investment isn't happening anyway). > Is Starlink special and thus subject to pricing rules that other businesses are not? If not, is it a special case simply because it's Ukraine? Yes, because it's not a free market and worse the price is specifically being hidden from the ultimate payer (citizens). > Digging into their cost structure is really a diversion from the actual argument, which is that we feel they have a moral duty to help. That's silly and no one accepts that argument. By the same logic you could charge $10,000 (or any other price) for a coffee cup.

foobarqux 3y ago

You would be right if 1. there were any reason to believe that Starlink would be increasing capacity 2. the hundreds of millions of dollars of premium were "reasonable" to build that increased capacity. But I don't see much sign of increased capacity (they may have built an extra ground station somewhere) certainly not anywhere near hundreds of millions of dollars worth. And I'm not even sure it is possible to increase capacity: The constraint is probably the satellite to ground bandwidth which you can increase by adding satellites but not in a specific area because they are LEO.

smallnamespace 3y ago
I think Starlink is justified in charging more for higher bandwidth usage even if they have not increased capacity, and have no current plans to do so. In another context, it's fair that I should pay 10x more for 10 diapers than one diaper. This is true even if the diaper company has no immediate plans to make another diaper factory. Price here is a signal to allocate scarce resources — in this case, the resources and labor that went into the diapers, as well as the amortized cost of the factory needed to make them. Is Starlink special and thus subject to pricing rules that other businesses are not? If not, is it a special case simply because it's Ukraine? If the latter, it'd be more honest to simply say: Ukraine is under attack and needs a helping hand. Starlink is uniquely positioned to help and ought to pitch in out of the goodness of their own hearts. Digging into their cost structure is really a diversion from the actual argument, which is that we feel they have a moral duty to help.
- foobarqux 3y ago
  > In another context, it's fair that I should pay 10x more for 10 diapers than one diaper. This is true even if the diaper company has no immediate plans to make another diaper factory. Bandwidth is different, it doesn't cost any more to supply 1 bit or 10 bits. Nearly all the cost is building the pipe. Put another way, in the Starlink case there isn't 10x more cost to them to provide increased usage if they aren't building more capacity. > Price here is a signal to allocate scarce resources — in this case, the resources and labor that went into the diapers, as well as the amortized cost of the factory needed to make them. Not in the Starlink case. What is the allocation being made? Price-priority rationing has no purpose here because the government already knows who it wants to have priority. And you said that inducing investment is irrelevant so there is no use of a price signal for that (and the investment isn't happening anyway). > Is Starlink special and thus subject to pricing rules that other businesses are not? If not, is it a special case simply because it's Ukraine? Yes, because it's not a free market and worse the price is specifically being hidden from the ultimate payer (citizens). > Digging into their cost structure is really a diversion from the actual argument, which is that we feel they have a moral duty to help. That's silly and no one accepts that argument. By the same logic you could charge $10,000 (or any other price) for a coffee cup.