SpaceX adds data restrictions to Starlink satellite internet service

Elon Musk’s SpaceX introduced restrictions to its Starlink internet service to curtail data drains of power users.

The company added a new policy on data use that will result in “slower speeds” for customers who use one terabyte of data per month during “peak hours,” which it defines as between 7 a.m. and 11 p.m., according to an email sent to Starlink users on Friday, a copy of which was seen by CNBC.

While SpaceX still promises “unlimited data” for its users, its service now has two tiers: “Basic” and “Priority.” Users are automatically offered “Priority Access” with the fastest speeds, but will be downgraded to “Basic Access” after passing the new threshold.

“In times of network congestion, users with Basic Access may experience slower speeds and reduced performance compared to Priority Access, which may result in degradation or unavailability of certain third-party services or applications. Bandwidth intensive applications, such as streaming videos, are most likely to be impacted,” SpaceX wrote on its website.

SpaceX’s Starlink team wrote in the email that the change was due to “a small number of users consuming unusually high amounts of data.” The company said less than 10% of the service’s customers utilize more than one terabyte of data per month.

It’s a noted shift in the Starlink service, which previously advertised “no data caps.” SpaceX updated its online messaging to now say “there are no hard data caps,” and pointed to the new policy.

The company’s priority system applies to residential customers in the U.S. and Canada, who pay $110 a month, as well as all its business and maritime customers, who pay $500 a month and $5,000 a month, respectively.

Starlink’s new service tiers offer a new revenue opportunity for SpaceX, as well. The company is offering customers the option to be automatically billed for additional data used. Continued “Priority Access” beyond the terabyte-threshold costs $0.25 per additional gigabyte for residential users and $1 per additional gigabyte for business customers.

SpaceX emphasized on its website “Starlink is a finite resource that will continue to grow as we launch additional satellites.”

To date SpaceX launched has about 3,500 Starlink satellites into orbit. The service had about 500,000 subscribers as of June. The company has steadily expanded Starlink’s product offerings as well, selling services to residential, business, RV, maritime and aviation customers.