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Elon Musk Isn’t Wrong to Want to Get Paid for Starlink in the Ukraine

Elon Musk floating in space next to a satellite

In February of 2022, when Russian forces invaded Ukraine, widespread global support was witnessed. Many nations banded together to implement sanctions and embargos. Multinational corporations cut supply offerings with some closing up shop in Russia altogether. And an outpouring of Ukraine financial aid came from countries and organizations alike. One of these was SpaceX, Elon Musk’s “other” corporation that provides Starlink satellite telecommunications and Internet. In what was an initial benevolent act, tens of thousands of Starlink terminals were provided to Ukraine. But as the months have passed, the issue of Starlink funding for Ukraine is becoming a hot topic. And Musk, for one, doesn’t think SpaceX should keep footing the bill.

(Dig into Bold’s deep dive on Starlink here.)

This is not to imply that SpaceX has been the only partner in Starlink funding for Ukraine. Indeed, the U.S., non-governmental organizations, and other countries have also stepped up to the plate. But compared to the actual costs of providing Starlink services, these amounts are severely lacking. Given that the vast majority of Ukraine financial aid has gone for other items, Starlink has been left holding the bag. This isn’t because Starlink telecommunications aren’t providing an essential service. In fact, without it, Ukrainian soldiers and civilians alike would be at much greater risk. Instead, it appears the problem is one that lies in a lack of communication, commitment, and transparency. And if these issues aren’t addressed, it may well be Ukraine that suffers.

“Early U.S. support for Starlink came via the United States Agency for International Development [USAID]. The largest single contributor of [Starlink] terminals, according to the newly obtained documents, is Poland with payment for almost 9,000 individual terminals. The US has provided almost 1,700 terminals.” – CNN Reporting

Available Facts Regarding Starlink Funding for Ukraine

When it comes to actual facts and figures related to Starlink funding for Ukraine, verified information is hard to find. According to Musk, over 20,000 Starlink terminals have been provided to the country with most used in military operations. More than half of these have been provided by various countries, NGOs and other entities with Poland leading the way. But this is a small amount of the overall costs related to Starlink services. Musk claims Starlink is footing 70% of the $80 million in cost thus far. This figure is expected to exceed $100 million by year’s end with an ongoing monthly expense of $20 million moving forward. Based on these numbers, it is understandable why Musk is greater allocations of the Ukraine financial aid.

Assuming these figures are roughly accurate, additional supports are needed for long-term Starlink funding for Ukraine. In total, the U.S. has spent over $18 billion in Ukraine financial aid so far. But only a small amount of this has gone to Starlink terminals and systems. Instead, much of the aid has gone toward humanitarian supplies as well as military weapons and equipment. Certainly, these are important for Ukrainians, but they are no less important that effective military intel and communications. They have even played a notable role in drone missions and attacks. Musk suggests that rising costs for Starlink over the next year could exceed $400 million. The figure continues to climb because thousands of terminals have been destroyed in the fighting. And these costs may continue to rise depending on the longevity and scope that the war encompasses.

“In addition to terminals, we have to create, launch, maintain, and replenish satellites and ground stations and pay telcos for access to internet via gateways. We have also had to defend against cyberattacks and jamming, which are getting harder. Burn is approaching approximately $20 million a month.” – Elon Musk, CEO of Starlink

A Call for Communication and Reason

From a basic need point of view, there is no question Starlink funding for Ukraine is required. Its presence and access are a matter of life and death. Given that ground communications have been repeatedly targeted, Starlink satellite communications have been essential. Given the situation, it is also clear that costs to Ukraine should be kept minimal to facilitate its use. But where stakeholders disagree relate to the actual costs and who should be contributing. Transparency is lacking on ongoing costs as Musk has only cited generalities. Plus, expecting to receive reimbursements at new-user rates is far-fetched in this instance. Without question, greater open communications and information sharing is needed to find an effective resolution.

A cartoon Musk staring at the Ukraine
Starlink funding for the Ukraine conflict isn’t that big of an ask, is it?

While Musk can help greatly in sharing such insights and being more transparent, he’s not wrong for wanting payment. Over the last 8 months, the U.S. and Department of Defense have provided billions of dollars in military aid. The equipment provided has been manufactured by dozens of government contractors like Lockheed-Martin, Raytheon, and others. Without a doubt, these corporations have received full payment for their efforts while Starlink has not. Yet, all of these products and services are crucial to the country, supporting the basis for Ukraine financial aid. Perhaps Musk has sensationalized his contributions to Ukraine. But that doesn’t mean that the U.S. and others shouldn’t contribute to Starlink funding for Ukraine. It seems Starlink has found itself at the crossroads of politics and business.

“I figured that it’s probably way better to have this as a contractual agreement between, let’s say, a coalition of countries that could purchase a service from Mr. Musk, the Starlink service, and provide it to the Ukrainians and keep on providing it to Ukrainians.” – Gabrielius Landsbergis, Lithuanian Foreign Minister

Moves In the Right Direction

While the Department of Defense hasn’t offered any specific plan, other nations are exploring the option. Recently, several foreign ministers in Europe met to discuss Starlink funding for Ukraine. Their concern is that Musk could pull private support away if costs become too excessive. Through an international coalition, members could agree via a contractual obligation to provide this Ukraine financial aid. Without question, written commitments are the right approach because they hold all parties accountable. But at the same time, such contracts must recognize the contributions Starlink has already made. War is unpredictable, and charitable efforts by Starlink early on should not be punished for the lack of foresight. Starlink has done its part in helping Ukraine in its time of need. Now it’s time for others to step forward and do what’s right without putting Starlink in a no-win situation.

 

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