ViaSat-1 is (as far as I'm aware) the most capable satellite currently in orbit, with a rate of 140 Gbit/s. Its bandwidth capacity when launched larger than all of the other North American satellites combined.
I would be VERY surprised to learn that the fundamental issue with this would be spectrum capacity, as the K band satellites operate in is very wide.
The way current satellite technologies typically deal with concurrent data streams is to split up into 'beams' that cover a specific region. Currently VS1 uses 72 bands but they're spread all over Canada and the US. With more satellites and tighter beam placement it's certainly feasible to have millions of simultaneous connections.
I feel like I kind of rambled on there - if there's anything in particular you'd like me to expand upon I'd be happy to (and if someone notices I'm wrong about anything please let me know!).
Since you asked :)
How much of this is relying on phased array antennae on the satellite and does that mean you won't have to aim a dish or will the downlink for residential require a tracking antenna or do those also work using phased arrays these days?
So I'm not sure where Musk's project is going to go - as schiffern stated below it seems they're going to go with a LOS phased array, and if they've actually got the price down that low with stable performance then they've really brought some incredible innovation to the field!
As I understand - ViaSat1 used a hybrid design antenna in space that allows them to do some pretty incredible things on the ground. Consumer internet is provided via traditional Ka-band ground antennae that have to be carefully positioned and installed. They also have services for Ku-band, S-band, and L-band antennae. These applications do generally use some form of phased array antennae so that they don't have to use any sort of mechanical tracking apparatus.
Needless to say, I'm mad excited for Musk pouring some funding and engineering efforts into such an awesome project!
Pretty curious what the consumer package will look like and what capabilities it will have.
The industry wasn't regulated very much until a situation in which some installers aiming dishes for EDJ (Edward Jones Financials) were knock things off line by aiming dishes at wrong satellites. I don't know much about how the technology works but it became apparent that aiming a dish at the wrong "bird" as we call them could interfere with others.
The EDJ thing was big news back in the day although a google search turns up nothing. It reportedly knocked Edward Jones off line for something close to a week while many were deployed to go and re-aim satellite dishes.
After this incident, the FCC got more involved and now to install a two way satellite dish, you have to take a course and pass it. My whole team was required to go through this training.
We also installed 2 way satellite internet for a company out of Canada that had a PCI card you plugged into your PC. The PCI card would then connect to the dish transmitter and LNB. The down speed was around 4-5Mb/s while the up speed was very slow at around 128Kb/s. I forget the name of the company but they had a proprietary driver for the PCI card that compressed the TCP packets in order to deal with the huge latency of traveling up to space and back down. They also had patents on a modified TCP/IP stack whereby they could locally ACK outbound TCP packets to improve throughput (as it was explained to me at the time).