FCC Ends $900 Million Starlink Subsidy

The Federal Communications Commission has reiterated its previous rejection of SpaceX’s request for a nearly $900 million subsidy to provide access to broadband in underserved rural areas of the United States. The commission does not have faith in the company’s capacity to achieve program goals, as stated in a statement dated December 12.

The funds were accessed by SpaceX, the owner of Starlink, a satellite internet provider, through the Rural Digital Opportunity Fund (RDOF). But there are stringent quality standards that participants in this program must meet. According to the FCC, SpaceX failed to meet the burden.

The Wireline Bureau handed down a similar decision against SpaceX in August 2022. The FCC expressed doubt about Starlink’s capacity to fulfill the stated speeds and reliability at the time. Furthermore, the panel found that the expenditure would be a waste of scarce Universal Service Fund funds due to the massive size of Starlink’s networks.

A representative from the FCC informed TechCrunch in an email exchange the same month that RDOF candidates were required to demonstrate their capacity to “fulfill public service obligations” and demonstrate their financial, legal, and technical competence. Starlink did demonstrate some potential, which was eventually acknowledged, but it was not sufficient for them to proceed with approval.

SpaceX wasted no time challenging the FCC’s decision to reject Starlink. It first submitted its Application for Review on September 9, 2022, with the grounds that the verdict was “grossly unfair” and erroneous in law. The business further claimed that the FCC manipulated numbers by using third-party data and conducting illegal speed testing.

That appeal is now dead as a result of the FCC’s most recent ruling. A new response from SpaceX was filed on December 12th. The business expressed its “dismay and perplexion” at the FCC’s decision, maintaining that Starlink remained the sole practical means of achieving the RDOF’s objectives. Even without financing, the company promised to keep working toward providing dependable service to Americans living in rural areas.