A Stellar Internet That China Covets

Declan Ganley wants to build an alternative network in the sky. 

It would be called the Outernet, a constellation of hundreds of satellites connected by lasers. They would bypass the existing ground infrastructure and send information directly to users from space. 

But there appears to be a problem: the Chinese Communist Party. If the Beijing authorities can’t own such a network, “they want to make sure that nobody else has it,” Ganley said.

And to stop them, Ganley said Beijing has been waging a legal battle through a state firm in Shanghai called Shanghai Spacecom Satellite Technology (SSST). The firm is a major player in China’s space dominance ambitions. 

The number of legal actions Rivada Space Networks faced totaled 160. They’ve spent $36 million to defend themselves. 

What started the battle are highly prized frequency permits that are critical for satellite operations. 

After a German company contracted the rights from a small firm in Liechtenstein in Europe, it partnered with SSST for funding. The Chinese investors initially acquired 10 percent of the stake, but gradually began to expand that. In a year, they had a controlling share while Germans began to see signs of the other party exploiting the licenses for China’s benefit. 

In came Rivada, which bought the Liechtenstein firm and took over the filings. Ganley offered to redeem the Chinese investors’ shares. 

They didn’t just refuse, he said, but “went nuclear with their lawfare in response.”

The Chinese side played “carrots and sticks,” at one point offering Ganley $7.5 billion to be their partner with a 50 percent equity. But the project would have to launch from China, Ganley said. 

Ganley refused. What came next was “a tsunami of lawsuits.”

The accusers filed appeal after appeal, until the judge closed the case; and they once sued over an issue involving a few thousand dollars, even though the cost of filing the complaint was many times higher, according to Ganley.

Still, Ganley said he won’t take the carrot. “I have a soul to be accountable for,” he said.

Ganely said he made a conscious business decision early in his career to never do business in communist China. 

He had worked in the Soviet Union at 19, staying there through the Soviet collapse. 

“It was the evil empire, and the source of that evil was Marxism—and was communism—where to be at the top of those organizations, you had to sell your soul,” he said.

And with the project, he said he’d “rather burn it down” than hand it over to China. 

—Eva Fu

BOOKMARKS

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