Starlink U-turns, will block X in Brazil after all The sound of a screeching rubber on road was heard in South America last night as Elon Musk's satellite broadband operation, Starlink, agreed to comply with an order in Brazil to block the billionaire's social media mouthpiece, X. Starlink had previously informed Brazil's regulator that it would not obey the order, according …
Everybody has rules that they think are dumb and should be ignored. When you see stories like this about international businesses and countries around the world, though, it’s not like they can just #RESIST! or whatever. Yeah, Apple’s going to follow China’s onshore data rules. TikTok’s going to follow the EU data rules.
Because the choice is to comply or stop doing business in that country. There really isn’t anything else!
It's almost as if one of the adults in the room at SpaceX, actually managed to get through to Musk that his Tantrums have proper consequences for his businesses.
I bet they're polishing their CV as we speak... I doubt the thin skinned one will take lightly to having a bit of reality inserted into his bubble...
More likely it's because he doesn't wholly own SpaceX, and therefore presumably Starlink. So the other shareholders get to tell him to wind his neck in. Some of them will have board representation. They're probably already annoyed that he's got some of their company's assets seized due to a dispute with Twitter (which only he owns). Probably they're incandescent that he's about to break the law, with partly their company, in support of his own personal one.
More likely it's because he doesn't wholly own SpaceX, and therefore presumably Starlink
The latest information I can find says
Elon Musk is the dominant shareholder in SpaceX, owning about 54% of the equity and controlling 78% of the voting rights. This majority stake allows him to make major decisions independently.
Sure, but the minority shareholders do have rights. And 200,000 Starlink subscription payments per month (@ R$368/$72 = $14.4m/month) not coming in would certainly be grounds for action.
But fewer rights than senior secured creditors who would hopefully have more insight into the financials than we do. So an ARPU of $14/month. Then all the OPEX that goes with that like paying for terrestrial capacity, transit, peering & CDN costs, all of which would be increasing inline with subscriber growth. Plus compliance costs that are increasing as new laws come into force, along with legal and crisis management fees which would likely cost substantially more than a ball gag. Offsetting those would be a pretty much static support cost. Check the Starlink support site! What do you mean you can't? And routing everything else to 127.0.0.1
Bigger problem would be revenue and ARPU growth & margins, especially given the astronomical costs of satellite launches and minor details like the first satellites launched are de-orbiting. Especially now there's a few years of practice vs theory and actual cash burn rates are becoming more apparent. Investors might be used to some of Elon's forward looking statements, but they also tend to want their money back. A while back, Musk said SpacX had to make Starlink work because the future of the business depended on it. And it probably still does, but then there might be some investors thinking a spot of Ch.11 could put SpacX into a safer pair of hands.
But fewer rights than senior secured creditors who would hopefully have more insight into the financials than we do
And they'd be able to push Musk around regardless of his majority stock ownership, because they can sue for breach of fiduciary duty if their loans are put at risk by Musk's actions. So they could tell him "do what the law requires in Brazil, because if you're going to give up 200K paying customers because you're mad about another country's laws we're going to go to court to have you tossed out on your ear and give Gwynne Shotwell all the decision making power"
There are a bunch of banks that loaned Twitter money thinking they could always mitigate their risk by selling the debt to others (oops). There are also investors, some with fairly mild agendas like free speech for crypto spam bots. Musk owns the majority of Twitter but there advantages to fooling the rich and powerful into having a financial interest in keeping your expensive and controversial vanity project afloat.
Cowardly Person wrote:
It's surprising all of the company boards haven't done their jobs and sacked him given the damage he does to each company's reputation on a daily basis.
Probably because they were put on the board primarily because of their cult-like attachment to you-know-who in the first place.
Narcissists like Musk do not handle criticism well.
And there is no shortage of Musk-worshippers in the corporate world. They want to be near him because they hope catch flying gold ejecta or something..
It's surprising all of the company boards haven't done their jobs and sacked him given the damage he does to each company's reputation on a daily basis.
Not that suprising when the boards are generally stacked with friends & family, and if he goes down, so do they. I was suprised he managed to get his pay deal approved, yet he did. Musk is undoubtedly an excellent salesman, but any salesperson will tell you you can only go for so long missing targets.
As an example of what the posters above said, the Tesla board is so stacked in Musk's favour that they approved a pay deal of unprecedented scale, so much so that shareholders challenged it in court and that particular saga is still ongoing and is (partly at least) why Musk wants to move Tesla's HQ.
https://www.theregister.com/2024/06/14/tesla_shareholders_agree_musk_compo/
If the previous owner/CEO of Twitter had told all his advertisers to go fuck themselves and then tried to sue them it's pretty much guaranteed he'd have been ousted.
See my other recent post.
More like Musk's entire argument that Moraes was a "rogue judge" went down the tubes when a 5 member panel (including Moraes) unanimously supported his order. (Some others on the panel writing scathing critiques of Starlink's refusal to comply with the initial order)
It's now scheduled to be sent to the entire Supreme Federal Court (11 members) which can either vacate the order or further legitimize it.
Perhaps someone had to sit Musk down and explain to him that this was a persuasive argument.
who is the judge trying to penalise here? Blocking twitter, I get. It penalises twitter.
But fining Brazilians who use a VPN to access it? That's rather unfair! source: https://www.engadget.com/big-tech/elon-musks-starlink-will-comply-with-the-brazil-x-ban-after-all-181144471.html
It is probably impractical to actually do that for Joe Public who don't post much, but it makes a point that deliberately ignoring the law has consequences and (probably more importantly) sends a message to any advertisers or companies with presence on X that they need to stop using it in Brazil and VPN-ing to continue is not going to be acceptable.
I assume it's aimed at journalists. If they quote something said on X, they get slapped with a fine for accessing it, as with the ban VPN is the only way they could do it.
That's really the point of this, to keep independent stuff about the government published on X out of the papers...
Not quite - as Moraes was also one of the 5.
Not sure how that works, as you would expect him not to be involved in reviewing his own decision. So while the panel ruling may well be entirely reasonable, his participation does taint it somewhat (ie it would undoubtedly have been preferable if he had not been on the panel).
Welcome to the real world.
Had financial arm-twisting not worked, nations can and have seized all the assets of foreign businesses that ignore government demands.
Being nations, they also have military and covert operations options. Elon might want to be careful about who he pisses off. There are a number of nations out there that only allow free speech up to a point; after that the death squads get involved.
It's easy to see why Starlink/Musk made this U-turn.
Since the initial emergency order has now been unanimously upheld by a 5-judge panel (including Moraes) of the Supreme Federal Court (some of the other judges on that panel also writing scathing critiques of Starlink's refusal to comply with the order), Musk can no longer blame it all on Moraes being a "rogue judge".
Moraes of course is a favorite boogeyman for the hard right Brazilian nationalists that, like MAGAs in the USA, continue to carry this fantasy belief that their hero Jair Bolsonaro was cheated out of winning the last election. Which makes him the kind of pro-democratic type that Musk loves to get his tiny panties in a twist over.
This order is apparently now on the verge of being referred to the entire 11-member Supreme Federal Court of Brazil, which can either vacate the order or further legitimize it.
It should be noted that Moraes was not only never a member of, or appointed by a member of Lula's PT political party, he has also criticized the actions of leftist groups in Brazil in the past, along with far-right/nationalist groups. There is little evidence that he is "in the pocket" of Lula other than both being more interested in democracy in the country than US-supported interlopers like Bolsonaro.
(The Bolsonarists, among other things, followed in Trump's footsteps by staging an insurrection and occupation of the federal government's buildings in Brasilia in January 2023, attempting to overthrow the newly elected president. During the government's investigation of this insurrection, top military officials have testified that if it had not been for certain top military brass not going along with the idea, these people would have staged a literal, military-supported political coup in the country.)
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