FCC rejects Starlink’s bid for $886M in subsidies

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The FCC has denied Elon Musk’s Starlink a hefty $886 million subsidy from the Universal Service Fund, allocated for expanding broadband services in rural areas.

The rejected bid, originally intended for the Rural Digital Opportunity Fund (RDOF) program, faced criticism as the FCC deemed Starlink incapable of proving its ability to deliver the promised broadband service.

This decision echoes a similar move by the FCC last year, prompting an appeal from SpaceX, Musk’s aerospace company behind Starlink. SpaceX had previously secured a bid to deploy a 100Mbps download and 20Mbps upload “low-latency internet” across 642,925 locations in 35 states, funded by the RDOF.

FCC Chairwoman Jessica Rosenworcel justified the rejection, stating that the applicant failed to meet the burden required for nearly $900 million in universal service funds—emphasising the FCC’s commitment to ensuring reliable and affordable high-speed broadband for consumers nationwide.

“The FCC is tasked with ensuring consumers everywhere have access to high-speed broadband that is reliable and affordable. The agency also has a responsibility to be a good steward of limited public funds meant to expand access to rural broadband, not fund applicants that fail to meet basic program requirements,” said Rosenworcel.

“The FCC followed a careful legal, technical, and policy review to determine that this applicant had failed to meet its burden to be entitled to nearly $900 million in universal service funds for almost a decade.”

However, FCC commissioner Brendan Carr dissented, arguing that the FCC has never previously demanded award winners to demonstrate meeting service obligations years in advance.

Christopher Cardaci, head of legal at SpaceX, defended Starlink’s bid in a letter to the FCC, asserting that Starlink remains the most viable option for connecting Americans in rural and remote areas “where high-speed, low-latency internet has been unreliable, unaffordable, or completely unavailable, the very people RDOF was supposed to connect.”

(Photo by Steve Johnson on Unsplash)

See also: NTT taps Amazon’s Project Kuiper for satellite connectivity in Japan

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