US government will not Extend the $900 Million Subsidy for SpaceX Starlink Unit

Space News - The Federal Communications Commission (FCC) has upheld its previous decision to deny Starlink nearly $900 million in rural broadband subsidies, reiterating that SpaceX satellite broadband service did not meet the requirements for participation in the Rural Digital Opportunity Fund (RDOF). The final denial, issued on December 12, affirms the FCC stance after a comprehensive legal, technical, and policy review.

In December 2020, SpaceX had been provisionally awarded the subsidies following its participation in an auction during the first phase of the RDOF process. The company stood to receive $886 million over a decade to provide high-speed broadband to approximately 643,000 homes and businesses across 35 states, securing one of the largest shares of the multi-billion-dollar fund.

However, the FCC emphasized that SpaceX, along with terrestrial telco LTD Broadband, failed to demonstrate how they would deploy services meeting RDOF conditions. The requirements include delivering download speeds of 100 megabits per second (Mbps) and upload speeds of 20 Mbps.

Despite SpaceX provisionally awarded subsidies, the FCC highlighted that Starlink median download performance in the United States, according to Ookla speed tests, was 64.54 Mbps in the third quarter of 2023. While this represented a slight decline quarter-on-quarter, it marked a 22% increase from the 53 Mbps recorded during the same period in 2022. Median upload performance rose to 9.72 Mbps over the three months to the end of September.

SpaceX expressed deep disappointment and perplexity regarding the FCC denial, arguing that the decision unfairly targeted them for not meeting RDOF speed requirements years ahead of any obligation to do so. In a letter to the FCC, SpaceX criticized the use of Ookla speed tests, claiming they were applied without warning and involved nationwide averages covering areas that would not be served with RDOF support.

The company contended that the FCC decision directly undermines the RDOF purpose to connect unserved and underserved Americans. SpaceX vice president, Christopher Cardaci, asserted that Starlink is a viable and perhaps the best option to promptly connect individuals residing and working in rural and remote areas where reliable, affordable, or available high-speed, low-latency internet has been lacking.

While SpaceX plans to enhance Starlink services with more powerful satellites, dissent has arisen within the FCC. Republican Commissioners Brendan Carr and Nathan Simington have opposed the regulator decision to deny subsidies to Starlink, expressing dissent from the majority decision.