While I think we need alternatives to Starlink and competition in the space[0], I think we need to recognize that there are physical limitations. Consequently there is a natural monopoly here, and if we have too many providers we will block out the sky[1] and risk creating the Kessler Syndrome[2]. While these satellites are being target at LEO and will naturally decay, lessening the harm if a Kessler effect arises, I think it is worth noting.
Interestingly, we had a strikingly similar event happen not too long ago: telecom.
When it was all wired, we had a choice: to allow wide competition and let the wires block out the skies[3], or share. The same problem happened again when it came to the airwaves. And again when it came to satellite communications. Here we are, at the natural continuation of this.
The physics of these things means that there are natural limitations that can't be avoided and can create advantages that can't be superseded, harming competition[4]. The physics means that there are better frequencies than others to use. The physics means that there are better orbits than others. Certainly first mover should be rewarded, but certainly the first mover cannot have undo power to squash any competition. That does not benefit anyone[5].
So now with a second player is this space[!0], we need to take the notion more seriously. Opinions of Musk aside[6], we're at a point where action need be taken. If the ball doesn't get rolling on this then everyone is worse off.[7]
I want to stress that this is a global issue. Even if the US solves the problem for US companies (in whatever manner that is), this doesn't change the fact that those laws of physics still apply and other countries exist. What about companies in China? India? Europe? Or other countries/regions? This was less of a problem for other communications but at this point the importance of a global solution becomes necessary. There is not enough space[0] for even a few countries to throw up their own mega constellations. They will start interfering with one another....
The truth of the matter is a coalition provides a better tool for everyone. But no coalition means the service is worse for every player. It is a literal Tragedy of the Commons[8] situation.
[0] pun unintended
[1] Mostly to Earth based astronomy. But there are other consequences and visible light isn't the only portion of the EM spectrum that is blocked. Plus... there's the physical layer!
[2] https://en.wikipedia.org/wiki/Kessler_syndrome
[3] https://history.stackexchange.com/questions/58872/did-they-r...
[4] If government has a role in the economy I think even those that are fairly libertarian agree that it should ensure competition is able to occur (even if that the means is through stepping back).
[5] Even in the long run it does not benefit the company in power. Only in the short term is there an advantage.
[6] Disclosure: I am very much not a fan. (Please don't get me started... I'd like to stay on this topic. At least for a bit. The other parts are also important but I'm hoping we can have a serious talk about this one thing. If nothing more than to solve a mutual problem)
[7] Even if you are a fan of Musk I think it is likely that we can agree that Musk's involvement in this decision making process should exclusively come from the perspective of SpaceX and not through his influence in the government. A functioning and competitive market needs a neutral third party decision maker, or at be a mediator. Even the perception of undo influence is detrimental to the process. It'll be difficult (potentially impossible) to decouple given current conditions.
[8] https://en.wikipedia.org/wiki/Tragedy_of_the_commons