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Today's SpaceX explosion is a major setback for Facebook's free internet ambitions

Today's SpaceX explosion is a major setback for Facebook's free internet ambitions


A $95 million deal is suddenly in danger

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Mark Zuckerberg Facebook Stock

This morning, a SpaceX Falcon 9 rocket exploded on its launch pad, completely destroying the rocket and its payload two days before the scheduled launch. The cause of the explosion is still unknown, but anyone counting on this weekend’s launch to deliver equipment into orbit is now left scrambling for a replacement.

That list of customers includes Facebook, which had contracted SpaceX to deliver the first satellite into orbit. In partnership with the satellite firm Eutelsat, the new satellite (called AMOS-6) was set to deliver wireless connectivity to large portions of sub-Saharan Africa, a key element of Mark Zuckerberg’s plan to provide basic connectivity to the entire world. Experts valued the deal at $95 million, giving Facebook a split share of the satellite’s bandwidth for up to five years. Now, those plans will have to be put on hold.

Mark Zuckerberg was in Nigeria earlier this week to highlight the country’s fledgling startup scene, a visit timed to coincide with the satellite’s launch. "We are disappointed by the loss," a Facebook representative said when reached for comment, "but remain committed to our mission of connecting people to the Internet around the world."

Launch payloads are typically insured, so it’s unlikely that Facebook will have to bear the financial cost of losing the satellite. But that leaves Zuckerberg’s ambitious project with money instead of satellite access, which could present a serious setback to overall. Announced in October, the AMOS-6 deal came after months of negotiation, and was far more modest than many analysts predicted given Facebook’s vast resources and grand ambitions.

There’s also the possibility that the partnership will simply dissolve. There’s a clause in the contract allowing Facebook and Eutelsat to terminate the deal if the satellite and its gateway stations aren’t operational by January 1st — which now seems like a very real possibility.

SpaceX made history with the Falcon 9 in April