Have you read the details of SpaceX's planned internet offering? Existing satellite based internet services have high latency. This is exactly the problem their solution aims to solve.
Geostationary Orbit is 35,000km above the Earth. Light "only" travels at 300,000km per second. That's a minimum latency of ~246 ms per packet, once you go round-trip from Earth -> Satellite -> Earth again.
Remember that starting up a TCP connection is Syn -> Syn-Ack -> Ack, which means a minimum latency of 750ms before a TCP connection is established. You're well into seconds+ before you can view Google's homepage. I guess this part can be sped-up with a smarter satellite.
Anything above 200ms is damn near unplayable for video games IMO.
That's the minimum latency according to current laws of physics. If you lower the orbit below Geostationary, then life starts to get extremely complicated for the people down on the ground. You can't just point your dish in a particular direction in the sky, because the satellite would be moving.
If you had a neighborhood completely clear of trees, maybe you could program a mobile radar dish to rotate with the moving satellites as they move across the sky (Subsynchronous orbit). But this doesn't seem too applicable to most people's home situations.
Latency aim is hence 25-35ms.
>You can't just point your dish in a particular direction in the sky, because the satellite would be moving....
Latency won't be an issue. Can't find any information on their plan to solve the second problem - but since they've announced the service already, I've got to believe they've come up with workable solutions.
[0]: http://arstechnica.com/information-technology/2016/11/spacex...