Pentagon commercial satellite internet program grows to $13 billion

WASHINGTON – The Department of Defense is increasing its projected spending on low-Earth orbit (LEO) satellite Internet services by more than tenfold, responding to growing demand from the military. SpaceNews learned.

The military’s Low Earth Orbit (PLEO) satellite services program, launched just last year with a $900 million cap, has been expanded to $13 billion by the Defense Information Systems Agency (DISA) and Space Systems Command, a spokesman confirmed.

The funding surge underscores how important high-speed satellite Internet has become for military operations as all industries demand the capabilities provided by services like SpaceX’s Starlink. The PLEO contract is also expanding in anticipation of Amazon’s Project Kuiper entering the online LEO market in the coming years.

The PLEO program is an indefinite delivery indefinite quantity (IDIQ) contract managed by DISA and the Space Systems Command Commercial Satellite Communications Directorate. The program has currently selected 20 suppliers who will compete for specific orders over a five-year base period, with an option to extend for a further five years.

Before this increase, about $660 million of the original $900 million cap had already been spent on the PLEO contract. Most of the orders came from Starshield, a militarized version of the Starlink service.

Ease of use is key to adoption

The Pentagon’s growing demand for Starshield underscores Starlink’s ability to adapt to military field operations, providing high-speed internet that is easy to set up and reliable in challenging environments, said Kevin Seibert, SpaceX’s head of business development for Starlink and Starshield.

SpaceX’s approach of providing a dual commercial and military product is “fundamental to what SpaceX does” in the launch market as well, Seibert said last week at the AFCEA Space Industry Days conference in Los Angeles.

He noted that the PLEO contract gives suppliers the ability to define services rather than dictate specific product specifications. This market model allowed providers to “self-determine the most cost-effective ways to deliver capabilities” by moving away from pricing metrics such as per-megahertz or per-megabit rates and supporting more flexible pricing options.

The PLEO contract consolidates demand across all branches of the military, allowing the government to secure better prices than traditional one-time contracts.

Seibert said an early draft of the request to bid for the PLEO contract included mandatory in-person training on how to install the terminals. SpaceX backtracked, emphasizing the ease of installation of Starlink, which requires minimal technical knowledge and typically consists of “plug in and point to the sky.” In response, DISA has made installation services optional for vendors whose equipment requires custom configuration, reducing barriers to field deployment.

According to Seibert, the adaptability of the Starlink system is rooted in its commercial design, where it has to navigate obstacles such as trees or nearby buildings.

Designed for the consumer market, this resilience has become a valuable asset in military operations where obstacles, interference, or even hostile influences can compromise connectivity. He said Starlink’s ability to automatically reconnect to new satellites in the event of failures increased its military appeal.

DISA structured the PLEO contract to accommodate technology upgrades, which Seibert called “extremely important.” The flexibility to pursue new capabilities as they emerge allows the Pentagon to keep pace with commercial innovation, he said.

Commercial technology use model

Jeff Rawlison, an industry consultant for American Defense International, said he views the PLEO contract as a breakthrough in bringing commercial technology to military applications. “This is a benchmark for accessing commercial opportunities at the speed of the commercial sector,” Rawlison said, noting that the program represents a significant shift in the Pentagon’s approach to integrating commercial solutions.

Rowlison also noted that while the Pentagon’s focus on low-Earth orbit communications is promising, extending similar models to areas such as satellite imagery could have broader benefits, potentially facilitating faster technological integration in military operations.

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