> It's hard to argue this is the case, especially for businesses that require a significant amount of upfront capital.
There is plenty of capital to be had these days, and a lot of competition in many capital-intensive industries. For example, we have multiple competitors in cloud computing space, despite it requiring ten of billions of dollars in capital to enter.
The ISPs, and utilities in general are different not because they are simply capital intensive, but rather because they have low marginal return for marginal unit of capital spent, and because competition damages these return even higher. Launching a few satellites to provide service globally is a different sort of capital expense than painstakingly building out utilities every street and every block.
> The $1B number is a red herring. It cost them $1B to maintain the system. The costs of acquiring rockets and designing satellites, as a private company, is likely far greater.
Sure, which is why there has been no competition to GPS so far. However, SpaceX, now that it already has rocket and satellite expertise, could provide competition to Government GPS relatively easily.
> The question you should ask would if a company like Waze (pre-acquisition of course) could have built the infrastructure for GPS. The answer is likely no.
No, but they would simply buy license to use GPS, just like they bought license to use maps. No reason to pass these costs to users directly as a line item in a bill. That’s my point: there is no reason to believe that privately owned GPS would diminish the user experience. As I already mentioned, instead of subscription fees that people lacking business imagination keep bringing up, you could for example charge royalties per GPS receiver sold, you know, the way Android phones already pay dozens of dollars in royalties.
There is plenty of capital to be had these days, and a lot of competition in many capital-intensive industries. For example, we have multiple competitors in cloud computing space, despite it requiring ten of billions of dollars in capital to enter.
The ISPs, and utilities in general are different not because they are simply capital intensive, but rather because they have low marginal return for marginal unit of capital spent, and because competition damages these return even higher. Launching a few satellites to provide service globally is a different sort of capital expense than painstakingly building out utilities every street and every block.
> The $1B number is a red herring. It cost them $1B to maintain the system. The costs of acquiring rockets and designing satellites, as a private company, is likely far greater.
Sure, which is why there has been no competition to GPS so far. However, SpaceX, now that it already has rocket and satellite expertise, could provide competition to Government GPS relatively easily.
> The question you should ask would if a company like Waze (pre-acquisition of course) could have built the infrastructure for GPS. The answer is likely no.
No, but they would simply buy license to use GPS, just like they bought license to use maps. No reason to pass these costs to users directly as a line item in a bill. That’s my point: there is no reason to believe that privately owned GPS would diminish the user experience. As I already mentioned, instead of subscription fees that people lacking business imagination keep bringing up, you could for example charge royalties per GPS receiver sold, you know, the way Android phones already pay dozens of dollars in royalties.