Amazon Project Kuiper Broadband Constellation

[Robotbeat]

Blue isn’t likely to be profitable for a very long time

[meekGee]

Blue isn’t likely to be profitable for a very long time

Yeah that's how I interpreted DG's post too.  "Assist his company".

Funny part is, some 1-2 years ago we were arguing whether Kuiper is a de-facto BO project.

People pointed out that legally speaking, it's an entirely different company amd JB has no influence over Amazon's business.

But there's an appearance that Kuiper has chosen a "not SpaceX" path for launch, and a "Pro-BO" one.

They're going to have a hard time explaining that.

[c4fusion]

TBH, I am a bit disappointed in both Jeff and Eric on their articles about this lawsuit as they miss the crux of the issues.  It's not that SpaceX wasn't chosen, rather the board and the audit committee didn't do any due diligence in validating the choices made and just rubber stamped what choices that the management team made despite it being the second largest capital expenditure in Amazon's history.

Inexplicably, the most famous, reliable and obvious launch provider in the world—SpaceX—was not among the four companies presented to the Audit Committee.

Well here is problem number one.  While it may still cause a lawsuit for Amazon even if SpaceX wasn't chosen after this step, at least Amazon could have stood behind the fact that they did their due diligence and at least considered and asked about SpaceX.

A responsible board would, for example, engage experts and advisors, fully oversee and inform itself about the contract negotiations, implement safeguards to insulate these negotiations from conflicts of interest, wall Bezos off from negotiations, and ensure that Amazon was conducting a full and fair procurement process that Bezos could not skew in favor of his personal rocket company.

There isn't much to say, a responsible board would at least bring in someone to help them understand this new sector of business and who are the major players that they can turn it.  It really doesn't have to be just SpaceX but also Rocket Lab (even though we know they couldn't lift that much with electron), India, Relativity (I mean they considered ABL), etc.

The Audit Committee—none of whom have any experience with rocket launches—took none of these steps. Instead, it left Bezos and his loyal management team to commandeer the process of selecting and negotiating with the launch providers—including with Bezos-owned Blue Origin and its New Glenn rocket and with other entities that planned to use Blue Origin engines in their rockets. For a full year and a half, the Board sat, ostrich-like, while the negotiation process unfolded without their involvement or oversight. Indeed, the Board did not even bother to ask for—and did not receive— any updates as to the status of the negotiations.

The last part that I am most surprised by, boards generally ask about status updates on major (and sometimes not so major) items if they are not presented with at least once a quarter.  But then I don't know Amazon's board and Jeff does sit on as the chairman of the board. So they might have assumed that Jeff was in the know or they were told on the side, which is risky behavior for a publicly traded company.

These contracts represented the second-largest capital expenditure in Amazon’s 25+ year history, second only to Amazon’s acquisition of Whole Foods

While $13.7 billion Whole food deal is small compared to the massive revenue of $514 billion that Amazon generated in 2022, it still represents a major line item for Amazon.

Thus, I believe this lawsuit has more merit than at first glance and will cause some sort of settlement.  No matter what happens, there might be follow on suits as other investors smell blood.

[king1999]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

[mandrewa]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

Are you sure?  I've never heard that.

[dglow]

JB doesn't even have to be tied to BO for this to be a case.

Merely guiding Amazon away from business with people he doesn't like, against Amazon's best interest, is reason for a shareholders lawsuit.

Having him on the other side just makes the lawsuit more severe.  He's not only hurting Amazon, he's profiting from it.

Agreed. Though it wouldn’t be difficult to counter that, even if benefitting Blue, the only profits Bezos will see still come from Amazon.

Yup, should have said "benefitting" instead of "profiting".

I'm confused. Jeff Bezos founded BO. Are you saying that he no longer owns a large block of stock in BO?

I think meekGee and I are just playing with notion of 'profitability' and the fact that it doesn't yet apply to Blue. But Blue need not be profitable for Bezos to benefit, of course.

[DanClemmensen]

JB doesn't even have to be tied to BO for this to be a case.

Merely guiding Amazon away from business with people he doesn't like, against Amazon's best interest, is reason for a shareholders lawsuit.

Having him on the other side just makes the lawsuit more severe.  He's not only hurting Amazon, he's profiting from it.

Agreed. Though it wouldn’t be difficult to counter that, even if benefitting Blue, the only profits Bezos will see still come from Amazon.

Yup, should have said "benefitting" instead of "profiting".

I'm confused. Jeff Bezos founded BO. Are you saying that he no longer owns a large block of stock in BO?

I think meekGee and I are just playing with notion of 'profitability' and the fact that it doesn't yet apply to Blue. But Blue need not be profitable for Bezos to benefit, of course.

Mr. Bezos benefits based on the stock price of his 13% share of BO. Revenue to BO affects the stock price. Is does not matter whether or not BO is profitable on the books.

[dglow]

I think meekGee and I are just playing with notion of 'profitability' and the fact that it doesn't yet apply to Blue. But Blue need not be profitable for Bezos to benefit, of course.

Mr. Bezos benefits based on the stock price of his 13% share of BO. Revenue to BO affects the stock price. Is does not matter whether or not BO is profitable on the books.

Exactly.

[dglow]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

Are you sure?  I've never heard that.

I always wondered if SpaceX readily launching OneWeb wasn't Musk's form of contrition for taking Wyler's concept and running away with it.

[TrevorMonty]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

If Amazon asked SpaceX to bid and they declined or had unfavourable launch terms then Amazon boards has done its job.

Starlink is direct competitor to Kuiper so there is some precedence in not including SpaceX in bidding.

[DanClemmensen]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

Are you sure?  I've never heard that.

I always wondered if SpaceX readily launching OneWeb wasn't Musk's form of contrition for taking Wyler's concept and running away with it.

SpaceX is a for-profit company. OneWeb was willing to pay for launch services. No need for any hidden motivations on either side.

[dglow]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

Are you sure?  I've never heard that.

I always wondered if SpaceX readily launching OneWeb wasn't Musk's form of contrition for taking Wyler's concept and running away with it.

SpaceX is a for-profit company. OneWeb was willing to pay for launch services. No need for any hidden motivations on either side.

Both can be true. As to motivations, note that OneWeb did not seek launches from SpaceX until their primary choice abandoned them.

[DanClemmensen]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

Are you sure?  I've never heard that.

I always wondered if SpaceX readily launching OneWeb wasn't Musk's form of contrition for taking Wyler's concept and running away with it.

SpaceX is a for-profit company. OneWeb was willing to pay for launch services. No need for any hidden motivations on either side.

Both can be true. As to motivations, note that OneWeb did not seek launches from SpaceX until their primary choice abandoned them.

OneWeb signed a long-term deal for Soyuz launches in 2015 at an attractive price. They stuck with that deal until it was cancelled via force majeure. That's a big motivation to find a new provider, and it's not hidden. I see no reason to believe SpaceX had any hidden motivation, either.

[king1999]

I always wondered if SpaceX readily launching OneWeb wasn't Musk's form of contrition for taking Wyler's concept and running away with it.

That's not Wyler's concept. LEO constellation traced back its origin in 1970s. Musk had tried to work with Wyler but had to go their separate ways due to different visions (among other fallouts). Wyler wanted to build a simple constellation to provide Internet to the underserved, mostly in Africa and Asia. Musk wanted to rebuild the Internet 2.0 in the sky using laser links and provide connectivity anywhere on the surface of the earth (which OneWeb can't do in the middle of the ocean due to lack of close by ground stations).

[TrevorMonty]

SpaceX is a for-profit company. OneWeb was willing to pay for launch services. No need for any hidden motivations on either side.

The profit from Oneweb launch would help pay for few Starlink launches.

[DanClemmensen]

I always wondered if SpaceX readily launching OneWeb wasn't Musk's form of contrition for taking Wyler's concept and running away with it.

That's not Wyler's concept. LEO constellation traced back its origin in 1970s. Musk had tried to work with Wyler but had to go their separate ways due to different visions (among other fallouts). Wyler wanted to build a simple constellation to provide Internet to the underserved, mostly in Africa and Asia. Musk wanted to rebuild the Internet 2.0 in the sky using laser links and provide connectivity anywhere on the surface of the earth (which OneWeb can't do in the middle of the ocean due to lack of close by ground stations).

Sorry, but this is not quite right. Wyler's first satellite company was was going to server the underserved 3 Billion:  O3B,  (Other 3 Billion), using a MEO constellation providing good coverage on the equator. Reality intruded, so he tried again with WorldVu, which was renamed to OneWeb. This was explicitly intended for global coverage, explicitly covering the poles, but the knew that these orbits cannot make enough money unless you cover pretty much the whole earth, not just the underserved areas. Their initial architecture was going to use laser links, but they simplified the architecture in order to reduce design time and satellite mass so they could get enough satellites launched in time to keep their spectrum. This decision was made in Q3 2014, in more or less the same month that Musk and Wyler went their separate ways.

[FutureSpaceTourist]

https://twitter.com/alexphysics13/status/1697865459083640835

I often see people claim that Amazon would never pay to fly on SpaceX because then they fund Starlink but they don't realize that by booking rides on Falcon 9 that means SpaceX has less slots on its schedule to deploy Starlink satellites.

If all the competitors were to order rides on Falcon 9, SpaceX would not be able to launch Starlinks as frequently as they do now. The less customers SpaceX gets, the more Starlinks they can launch, the more competitive they are with other folks.

https://twitter.com/alexphysics13/status/1697865915654685180

The only way SpaceX would be able to compensate for the surge of customer flights would be to spend more money on Falcon 9 R&D and on ramping up cadence perhaps with more droneships etc.

[c4fusion]

Does SpaceX have to launch for them even if they ask as they are the biggest competitor? SpaceX launched OneWeb only after being requested from the UK/US governments.

If Amazon asked SpaceX to bid and they declined or had unfavourable launch terms then Amazon boards has done its job.

Starlink is direct competitor to Kuiper so there is some precedence in not including SpaceX in bidding.

I definitely agree, and this wouldn't been such an issue if all 3 launchers weren't so late (for a public "tech" company where being late a single quarter can be seen at least a huge deal).  By not saying anything about SpaceX, good or bad, it's obvious why investors are suing now that things are now not going as well for Amazon.

[Zed_Noir]

<snip>
Tom Ochinero stated earlier this year that they have the hardware to scale to 200 launches per year if customer demand is there.

Would need additional pad capacity and infrastructure with more maritime assets along with good weather to match potential hardware availability.

SpaceX did just get the lease on Vandenberg Space Launch Complex 6. That will help to some degree (with higher inclination orbits, at any rate), once they have it up and ready for use.

It is less clear to me how much they can increase cadence at LC-39A or SLC-40, though.

SpaceX would need to add or acquired additional launch pad(s) on the Space Coast.

One possibility is to acquired pad SLC-37B for Falcon Heavy and Dragon flights after the last Delta IV Heavy launch next summer.

Or they can build a new Falcon 9 pad on an old or current launch complex.

However whatever route SpaceX take to greatly increase the number of launches from the Space Coast. They will need more commodity storage and availability. Along with more payload processing facilities and launch hardware holding facilities.

[DanClemmensen]

[from alexphysics13:]

The only way SpaceX would be able to compensate for the surge of customer flights would be to spend more money on Falcon 9 R&D and on ramping up cadence perhaps with more droneships etc.

R&D takes time, so it cannot in general respond to a "surge". As of right now, Starship R&D is much more likely to speed up Starlink than F9 R&D and has higher ROI.

Falcon Heavy launches disrupt the schedule at LC-39A, because the pad must be reconfigured. SpaceX can perhaps increase launch cadence there if they can move Falcon Heavy launches to LC-37B, but this cannot happen unless they can negotiate for the use of that pad and then convert it. Conversion cannot really start until after the last Delta IV Heavy launches in March. SpaceX needs to provide a vertical payload integration service for NSSL in any event as part of their NSSL Phase 2 service, and I think LC-37B is a good candidate, similar to SLC-6 at VSFB.