Washington, D.C. – The Federal Communications Commission (FCC) has reaffirmed its decision to deny SpaceX’s Starlink satellite broadband service nearly $900 million in subsidies for rural broadband deployment under the Rural Digital Opportunity Fund (RDOF).
SpaceX, led by Elon Musk, was initially set to receive $885.5 million as part of the FCC’s $9.2 billion auction in December 2020. This funding was part of the RDOF initiative, aimed at incentivizing broadband providers to service hard-to-reach areas in the United States.
FCC Says SpaceX Failed to Meet Requirements
Despite the provisional award, SpaceX’s Starlink failed to satisfy the RDOF’s key requirements, which include delivering 100 Mbps download and 20 Mbps upload speeds.
According to recent Ookla speed tests, Starlink’s median download and upload speeds in the United States have not met these standards. Starlink median download performance in the U.S. was 64.54 Mbps in Q3 2023, a marginal decline quarter on quarter, though Starlink did show strong increases in September, October and November.
FCC Chair Jessica Rosenworcel, in a news release, emphasized the thorough review process undertaken by the FCC: “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 the funds.”
The FCC’s decision has sparked varied reactions, including dissent from its two Republican Commissioners, Brendan Carr and Nathan Simington. SpaceX, which has plans to enhance Starlink with more powerful satellites and the Starship/Super Heavy launch vehicle, views the decision as a setback in its efforts to provide widespread internet connectivity.
SpaceX’s Response to the Decision
SpaceX expressed deep disappointment at the FCC’s decision, citing it as a direct undermining of the RDOF’s goal to connect unserved and underserved Americans. Christopher Cardaci, SpaceX Vice President, argued that Starlink is one of the best, if not the best, options for achieving RDOF’s objectives, especially in rural and remote areas.
SpaceX, in a letter to the FCC dated December 12, contended that the FCC’s decision unfairly targets the company for not achieving RDOF speed requirements prematurely, before any formal obligation to do so. The company criticized the FCC’s reliance on Ookla speed tests, arguing that these tests unexpectedly encompass national averages and include areas outside the scope of RDOF support.
In the letter, SpaceX Vice President Christopher Cardaci emphasized, “This decision directly undermines the very goal of RDOF: to connect unserved and underserved Americans. Starlink is demonstrably one of the best options—likely the best option—to accomplish the goals of RDOF.” Cardaci further argued the unique position of Starlink in serving rural and remote areas, stating, “Indeed, Starlink is arguably the only viable option to immediately connect many of the Americans who live and work in the rural and remote areas of the country where high-speed, low-latency internet has been unreliable, unaffordable, or completely unavailable, the very people RDOF was supposed to connect.”
The Future of Starlink
SpaceX’s Starlink project aims to build a vast satellite network for global high-speed internet coverage. The company has launched hundreds of their latest version internet satellites, a fraction of the total needed, but enough to begin service in some areas. Despite the FCC’s decision, SpaceX continues its expansion, including a partnership with Microsoft to connect Azure cloud computing network to the satellite network.
This partnership focuses on integrating Microsoft’s Azure cloud computing network with SpaceX’s satellite network. Over the recent months, SpaceX and Microsoft have engaged in rigorous testing to ensure the seamless connection between Starlink and Azure. This alliance is particularly crucial for Microsoft’s latest innovation – mobile data centers. These centers are tailored for clients requiring cloud computing solutions in diverse and demanding settings, including remote locations
The FCC’s reaffirmation of its subsidy denial to Starlink highlights the challenges in expanding broadband access to rural America. As SpaceX navigates these hurdles, the pursuit of equitable digital connectivity remains a critical issue. This development underscores the ongoing efforts to bridge the digital divide in underserved regions of the United States.
