Elon Musk’s satellite internet service, Starlink, recently hit a speed bump after the Federal Communications Commission (FCC) on Wednesday rejected SpaceX’s bid for nearly $1 billion in subsidies. SpaceX sought subsidies for its efforts to bring high-speed satellite internet to rural areas of the United States.
SpaceX received $855.5 million from the FCC’s Rural Digital Opportunities Fund in December 2020. The FCC found that the private space company led by Elon Musk had applied for funding to provide satellite internet service to nearly 650,000 locations in 35 states. The subsidies were introduced as an incentive for broadband providers to bring internet services to remote areas of the country.
As the FCC noted in a press release, Starlink and another company seeking subsidies, LTD Broadband, “had not demonstrated that the providers could deliver the service promised.” “Funding these massive proposed networks would not be the best use of the Universal Service Fund’s limited dollars to bring broadband to underserved areas in the United States, the commission concluded,” the FCC noted.
FCC Chairwoman Jessica Rosenworcel explained the agency’s decision in a statement.
“After careful legal, technical and political consideration, we reject these applications. Consumers deserve reliable and affordable high-speed broadband. On the way to a digital future that requires ever more powerful and faster networks, we have to make optimal use of the scarce dollars for universal service. We cannot afford to subsidize companies that are not delivering the speeds promised or are unlikely to meet program requirements,” she said.
However, Rosenworcel emphasized that Starlink’s technology shows promise. It’s just that in its current state, the technology is still evolving and its cost to consumers is still pretty high. This might be a perfectly valid concern considering a Starlink kit is currently $599 and its internet service is $110 per month.
“Starlink’s technology is really promising. But the question before us was whether to make its still-development technology for consumer broadband — which requires users to buy a $600 dish — public with almost $900 million in universal service funds by 2032 subsidize,” added the FCC chairman.
However, it should be noted that Starlink’s deployment in Ukraine showed that a satellite internet kit could serve users belonging to more than one household. About 12,000 Starlink dishes were deployed in the country in May, officials in Ukraine noted. These 12,000 dishes serve about 150,000 users across Ukraine every day at this time.
The FCC press release can be viewed below.
DOC-386140A1 by Simon Alvarez on Scribd
Don’t hesitate to contact us with news tips. Just send a message to Simon@teslarati.com to give us a heads up.
Starlink application to provide internet in rural areas denied by FCC