FCC Denies $886 Million Subsidy to Starlink for Rural Broadband Expansion

The Federal Communications Commission (FCC) has announced its decision to reject Elon Musk’s Starlink from receiving an $886 million subsidy under the Rural Digital Opportunity Fund (RDOF) program. The funds were intended to support the expansion of broadband services in underserved rural areas.

The FCC cited concerns that Starlink failed to demonstrate its capability to deliver the promised broadband service, stating that allocating the subsidy to the company wouldn’t be the best use of limited Universal Service Fund dollars. This decision echoes the rationale behind the FCC’s rejection of Starlink’s bid last year, leading to the subsequent appeal.

SpaceX, the parent company of Starlink, had initially secured the bid to deploy high-speed, low-latency internet to 642,925 locations in 35 states, funded by the RDOF. However, the recent denial of the subsidy suggests a divergence from the FCC’s previous approval.

FCC Chairwoman Jessica Rosenworcel emphasized the agency’s responsibility to ensure consumers nationwide have access to reliable and affordable high-speed broadband. She stated, “This applicant had failed to meet its burden to be entitled to nearly $900 million in universal service funds for almost a decade.”

In dissent, FCC Commissioner Brendan Carr argued that the FCC has not previously required other award winners to demonstrate meeting their service obligations years ahead of time.

Christopher Cardaci, the head of legal at SpaceX, addressed the denial in a letter to the FCC. Cardaci argued that “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.”

This decision comes at a time when President Biden’s efforts to promote equitable internet access face challenges, with his funding plan for locally-run internet service receiving significant cuts before becoming law. The ongoing debate surrounding broadband expansion in rural areas underscores the complexities of achieving universal and affordable high-speed internet access across the nation.