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It's a way to for Musk to benefit from government subsidies (as described in the article), like all Musk ventures.

I think it was dreamed up as a way to monetise the increasing capacity of SapceX launches. They might run out of customers and so they need ways to make money out of launching. A constellation of 10k+ satellites is a good way to need lots of launches!

It is for the US Army. They are the initial customer anyway. Civilians are the best beta testers. The internet was originally created to have a network in place for the military and I see this as the natural evolution beyond hard wired systems or intermittent wireless towers.