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Amazon Cleared for Space Launch, but Broadband Venture Questions Remain

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Amazon Cleared for Space Launch, but Broadband Venture Questions Remain

Amazon.com Inc.’s plan to spend more than $10 billion on a constellation of internet-beaming satellites has left industry insiders guessing about which customers the company plans to serve.

The e-commerce company’s space venture won Federal Communications Commission approval last month to launch more than 3,200 low-Earth-orbit satellites over the next nine years. The proposed network, called Project Kuiper, takes a well-worn path pursued by rivals including billionaire Elon Musk’s Space Exploration Technologies Corp., OneWeb and other companies that have tried to take satellite broadband service mainstream.

Those companies got a head start on Amazon, which has yet to launch a single satellite. Mr. Musk’s company, known as SpaceX, has launched dozens of satellites this year. The closely held company has tapped the private market several times to fund its rocket business and the new communications network, called Starlink. SpaceX and Amazon both promise their technology can provide more internet bandwidth at a lower price than existing satellite operators.

“Technologically, it can be done,” said Gabriel Rebeiz, a wireless-communications professor at the University of California, San Diego. “It’s really a financial thing. Once you build it, is it economically viable?”

Amazon is under less pressure than other satellite companies to show investors its service will turn a quick profit. The Seattle company, which generated nearly $90 billion in revenue last quarter, said in a blog post last month that it plans to steer more than $10 billion toward Kuiper over the coming years as it posts hundreds of jobs for the unit.

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