FCC Commissioner demands review of Starlink rural broadband subsidies

Withdrawal of SpaceX's $885.5m award a 'drastic action' – but Musk wouldn't want subsidy anyway, right?

A member of the Federal Communications Commission's leadership team has come out swinging on behalf of SpaceX after the company's bid for rural broadband subsidies via its Starlink satellite business was rejected.

The FCC withdrew its award of $885.5 million under Rural Digital Opportunity Fund (RDOF) in August, claiming the funding for Starlink "would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the United States."

Chairwoman Jessica Rosenworcel said at the time: "Starlink's technology has real promise, but the question before us was whether to publicly subsidize its still developing technology for consumer broadband – which requires that users purchase a $600 dish – with nearly $900 million in universal service funds until 2032."

The decision raised eyebrows even within the FCC itself. Commissioner Brendan Carr said he only found out through a press release while on a work trip to remote Alaska, adding that the agency should be making it easier for poorly served communities to get service, "not rejecting a proven satellite technology that is delivering robust, high-speed service today."

He continued: "To be clear, this is a decision that tells families in states across the country that they should just keep waiting on the wrong side of the digital divide even though we have the technology to improve their lives now."

SpaceX appealed against the decision on Friday, describing it as "flawed" and "grossly unfair" in a regulatory filing.

"The decision appears to have been rendered in service to a clear bias towards fiber, rather than a merits-based decision to actually connect unserved Americans," wrote David Goldman, SpaceX's senior director of satellite policy.

On Monday, another FCC Commissioner, Nathan Simington, released a statement [PDF] in support of the company's appeal.

"SpaceX won that award in a robust, competitive auction," he said. "Prior to the recent Wireline Competition Bureau decision, SpaceX appeared to me to be on track to deliver a novel high-speed, affordable service, not merely for the specific rural areas that it promised to serve as part of the RDOF program, but also for the rest of the country and potentially much of the world as well.

"While acknowledging the Bureau's concerns about Starlink service achieving required benchmarks, I would point out that certain other RDOF bidders have yet to begin construction and are thus intrinsically farther behind.

"I am concerned that a confluence of factors both within and without the FCC, including this decision, our lengthy review of SpaceX's application to launch more satellites, and the NTIA's decision to exclude satellite broadband providers from the $42.5 billion BEAD program, will all combine to keep millions of rural Americans disconnected and excluded from our digital economy for years to come."

He went on to say that pulling support from SpaceX would only give Chinese satellite internet companies an advantage in "serving the rest of the world" because they have the "full support of their government."

"This would be especially troubling because it might raise questions for low Earth orbit connectivity companies worldwide about the regulatory risks of choosing to domicile in the United States," he added.

He also suggested that something had gone amiss during the decision-making process:

I am troubled that the decision to rescind SpaceX's RDOF award applied standards that were not in our RDOF rules, were never approved by the Commission, and in fact made their first appearance in this drastic action. I urge my fellow Commissioners to review SpaceX's appeal and take prompt action to uphold our rules and make sure that millions of Americans in rural areas get connected as soon as possible.

The ruling does seem somewhat at odds with another FCC decision to let Starlink satellites operate at lower altitudes in order to improve coverage in Alaska and other remote locations.

Competitors Viasat, Amazon, and Dish kicked up a stink with the Court of Appeals, making claims of environmental impact and increased collision risk, but the court upheld the approval.

Starlink is approaching more than 3,000 satellites in low-Earth orbit that beam broadband internet down to tens of thousands of customers in the US alone. Users pay $599 for a terminal then a $110 monthly fee for the service. The constellation can provide speeds of around 100Mbps.

Tesla and SpaceX CEO Elon Musk has publicly come out against government subsidies and tax incentives for US businesses in the past. In his "Person of the Year" interview in Time last year December, he said the government was not a good "steward of capital." ®

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