FCC Upholds Decision to Deny Starlink $885 Million Rural Broadband Subsidy

The Federal Communications Commission (FCC) has reaffirmed its 2022 decision to deny SpaceX’s Starlink an $885.5 million subsidy for rural broadband expansion. The denial was part of the Rural Digital Opportunity Fund (RDOF), aimed at providing internet service in underserved areas.

The FCC, led by Chair Jessica Rosenworcel, stated that Starlink failed to meet basic program requirements and couldn’t demonstrate its ability to deliver the promised service.

The initial allocation of $885 million to Starlink in 2020 was contingent on the company’s bid regarding connectivity, cost, and coverage in rural America. However, the FCC highlighted “numerous financial and technical deficiencies” in Starlink’s proposal, including its reliance on a developing technology that required users to purchase a $600 dish.

Starlink appealed the decision, citing plans for satellite expansion and the promise of SpaceX’s Starship rocket. Still, the FCC, in a 3-2 ruling, maintained that Starlink had not proven its capability to fulfill RDOF’s requirements for deploying a network across 642,925 locations in 35 states.

The dissenting FCC commissioners, Brendan Carr and Nathan Simington, argued against the decision. Simington acknowledged that while some RDOF recipients provided no service, Starlink was serving half a million subscribers, including areas with limited broadband options. Carr suggested political motivations behind the denial, linking it to Elon Musk’s activity on X (formerly Twitter) and the Biden administration’s stance on Musk. (via TechCrunch)

SpaceX contested the decision, asserting that it undermined the RDOF’s goal of connecting underserved Americans. SpaceX pointed out Starlink’s success in providing broadband to millions of subscribers, particularly in areas neglected by other providers. The company emphasized its ongoing efforts to launch more satellites, enhancing service quality.

The FCC, however, stood by its findings, citing Starlink’s failure to address detailed inquiries and uncertainties about reaching the required internet speeds. The FCC’s review indicated SpaceX’s reliance on internal plans and confidential information, which the commission found insufficient to support the funding request.

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