It’s possible this is less about comms or cost, and more about occupying an orbit with high utility. I think of it as just an extension of PRC’s “rape the oceans” policy.

It has a really good balance of engineering constraints.

High enough that atmospheric drag doesn't require constant propulsion to maintain orbit.

Low enough to get some radiation shielding.

Lower orbits better for communication latency and imaging resolution.

Also sun-synchronous orbits are in this zone.

Good balance for coverage vs number of satellites.

There are a lot of strategic reasons why this altitude is ideal.

Sun-synchronous orbits are great for spy satellites. One might wonder if this is a dual-use constellation. Of course the US is doing something similar with Starshield.

They're internet broadband satellites, they want low latency connectivity, as does SpaceX and everybody else launching them there. It does also cost more to reach higher orbits, and more to stay in much lower orbits for any length of time due to propellant requirements.