Is it because ISLs will require more powerful lasers because the light is focused through a lens instead of guided through a fiber?
Because laser energies, signal paths, traveling through free space must literally share that space with each other. It is effectively one wire. An underground cable can have hundreds, thousands, even millions of wires lying beside each other without interference.
It is comparable to the difference between a wifi connection and bundle of ethernet cables. One can scale and one cannot.
Could you just add more beams on each satellite?
[0] https://lilibots.blogspot.com/2020/04/starlink-satellite-dim...
Space is pretty big, lasers are pretty narrowly focused, and not many people have lasers in space yet.
I doubt the laser links support this, and I wonder if any could, when in a non-encapsulated environment. EG, spectral pollution from sunlight/etc.
"I can't imagine much appetite for any future under-sea cabling out of Australia"
And the reality is that satellites can not compete with the bandwidth of subsea cables for bulk data transfer, HFT is a whole other world.
If you want to observe events at one exchange and send orders to another, all that matters is total latency. For that use it doesn't matter whether your servers are in the same room as one of the exchanges or 200 miles away from either one.
You tend to get bandwidth spikes on most feeds at market open and close, but intraday rates are low
Every time SpaceX makes a goal, someone claims it's really far away until it is completed.
If there was a need for Terabit/s laser capacity for Starlink, there's no particularly good reason it couldn't be developed.
www.bloomberg.com/features/elon-musk-goals