In June 2020, the Federal Communications Commission (FCC) formally designated Chinese telecommunications equipment manufacturers Huawei and ZTE as national security threats, effectively banning their equipment in the United States. “We cannot treat Huawei and ZTE as anything less than a threat to our collective security,” commented FCC Commissioner Brendan Carr. “America has turned the page on the weak and timid approach to Communist China of the past … and our efforts will not stop here.”

Now, the world is facing a new threat from telecom providers backed by the Chinese Communist Party (CCP). But this time the threat resides not in cell phone towers, but in low-earth orbit.

The satellite internet industry has experienced a boom in recent years and competition is beginning to heat up. The CCP has selected its national champion and plans to launch nearly 13,000 satellites, with the intent of further expanding its influence in the developing world. If the United States and its allies are to counterbalance China’s growing influence and promote internet freedom internationally, it is imperative that the U.S. create a regulatory ecosystem that fosters domestic competition in satellite internet.

Less than a decade ago, satellite internet networks offered relatively spotty, low-speed service that was ill-fitted for mass commercial uptake. But in 2019, SpaceX’s Starlink was the first to take a new approach. Rather than operating a low number of high-flying satellites as others had done, SpaceX took advantage of declining launch costs, thanks in part to its successful Falcon 9, to begin launching constellations consisting of a large number of satellites in low-earth orbit (LEO). These new LEO satellite internet networks have proven to be a gamechanger, offering consumers service with higher throughput, lower latency, and more global coverage than older networks.

With nearly 3,500 active satellites and more than 1 million subscribers, Starlink is reaping the benefits of being the first mover. But it isn’t the only project vying for this growing market. London-based OneWeb has nearly completed the first phase of its satellite constellation and projects that it will have global coverage by the end of the year. Amazon’s Project Kuiper plans to launch its first satellites early next year and to begin providing services to consumers soon after.

Then there’s China’s planned constellation. Alarmed by the speed and size of Western satellite constellations, China’s response to Western innovations became clear in late 2020 when the country submitted a spectrum allocation filing with the International Telecommunication Union—a branch of the United Nations charged with coordinating issues related to telecommunications networks. This filing indicated for the first time China’s plans to establish its own “megaconstellation” in LEO. The CCP contemporaneously added satellite internet to a list of “new infrastructure” projects that are the targets for significant investment, research, and development. Not long after, the state-owned China Satellite Network Group was established “to oversee the constellation project known as ‘Guowang.’” This new project fits squirrely within the CCP’s ongoing strategy for exporting internet and communications technology around the world.

For more than a decade, the CCP has been engaged in what the Council on Foreign Relations described as “one of the most ambitious infrastructure projects ever conceived.” Known as the Belt and Road Initiative (BRI), this project is a collection of development projects and investments across the globe directly funded or financed by China. Foreign policy and national security experts regularly warn that the BRI is a thinly veiled exercise in sharp power where the Chinese government continually leverages BRI projects and investments to increase economic dependence and its political influence abroad.

One major component of the BRI is telecommunications networks. Dubbed the Digital Silk Road, China has invested heavily in building telecom infrastructure, particularly in Africa, Southeast Asia, and Latin America. As a report from the Democratic staff of the Senate Committee on Foreign Relations warned in 2020, “China’s rise as a key player in the digital domain that uses its influence to promote digital authoritarianism presents fundamental security, privacy, and human rights concerns for the United States and the international community at large.”

As that report and others have explained, telecom networks are an essential component of Chinese digital authoritarianism. While we often think of authoritarian censorship and surveillance as taking place on applications and platforms, much of this censorship instead happens on the networks that run these applications. CCP authorities actively monitor nearly all internet traffic running through their networks and use this surveillance apparatus to oppress domestic populations and propagandize to foreign countries.

Meanwhile, the lack of reliable internet infrastructure remains a major obstacle to development in many areas of the world. Traditional broadband connectivity is often limited or nonexistent in remote areas, hindering economic progress and knowledge exchange. By leveraging satellite internet technology, China aims to overcome these barriers and extend ubiquitous connectivity to the farthest reaches of the developing world.

Once established, these services will be used by the CCP in ways that expand its influence over and surveillance of the developing world. As highlighted in the most recent threat assessment from the Office of the Director of National Intelligence, China is on pace to “achieve world-class status in all but a few space technology areas,” including LEO-based satellite internet by 2030, and will use these technologies “to advance its global standing and strengthen its attempts to erode U.S. influence across military, technological, economic, and diplomatic spheres.”

China’s strategy for building a tech industry that rivals that of the Western world is to designate certain entities as “national champions,” giving these entities near-monopolies over certain industries, and then backing them to the hilt. This strategy spurred the rise of Huawei, Tencent, Bytedance, and other companies. While this approach has its benefits, competition is more likely to drive innovation and technological advancement over time. Multiple competitors vying for market share drive companies to push boundaries, invest in research and development, and expand into new markets, ultimately benefiting users in the developing world. In this way, strong domestic competition is a key component of winning the international competition for digital preeminence and safeguarding global internet freedom.

There are several ways that the United States could support competition in the satellite internet industry. One agency already endeavoring to do so is the FCC. In late 2021, the FCC began a series of actions intended to support spectrum sharing and coordination between satellite internet providers. As FCC Chairwoman Jessica Rosenworcel commented, “the rush to develop these new space opportunities requires new rules that keep competition and innovation front of mind. … We want to make sure [the rules] create a level playing field for new competitors.”

Now, the FCC is continuing this effort with further actions seeking to promote domestic competition. As the American satellite industry faces international competition from China, promoting spectrum sharing and coordination allows domestic satellite companies to optimize their use of available spectrum resources, which strengthens their ability to compete globally and deploy service to the developing world.

Beyond spectrum sharing, the FCC should take further steps to promote domestic competition amongst satellite internet providers. One area worth examining is the eligibility of satellite internet providers for certain federal programs. Starlink made headlines last year when the FCC awarded it over $855 million under the Rural Digital Opportunity Fund (RDOF) auction only to then have those funds later revoked. While the FCC pointed to the fact that Starlink’s upload speeds fell “well below” the required 20 Mbps, questions remain about why and whether Stalink should have been excluded from receiving these funds, leading the company to appeal the FCC’s decision.

RDOF is only one of the numerous programs run through the Universal Service Fund (USF). To create clear rules that put domestic competition and innovation front of mind, the FCC should clarify standards and benchmarks for when satellite internet services have sufficient quality to become eligible for USF programs. Furthermore, the Federal Aviation Administration and Environmental Protection Agency, which are both involved in the licensing and regulation of the satellite internet industry, should follow the FCC’s lead and examine ways to promote domestic competition through standards-setting and streamlining regulatory compliance.

When it comes to countering China’s growing digital authoritarianism abroad, one of America’s most potent weapons continues to be its commitment to free and fair competition. Promoting domestic competition in the satellite internet industry is a critical aspect of geopolitical competition with China and an essential element in the pursuit of global internet freedom. If the United States does not proactively support its own satellite internet companies and encourage them to innovate, it will continue to cede ground to the Digital Silk Road. With a few nudges from federal policymakers, satellite internet may prove a potent catalyst for socioeconomic development, empowerment, and the free exchange of ideas both at home and abroad.

Luke Hogg is the director of outreach at the Foundation for American Innovation where his work focuses on the intersection of emerging technologies and public policy. He is also an innovation fellow at Young Voices. You can follow him on Twitter at @LEHogg.

Image: SpaceX.