The US telecoms watchdog has rejected a bid by Elon Musk’s SpaceX for almost US$900mln in subsidies to support rural broadband customers.
The company’s Starlink satellite internet network was awarded US$885.5mln in the Federal Communications Commission’s US$9.2 bn auction in December 2020.
The FCC said that Starlink and LTD Broadband, which was the largest winning bidder in the auction with an award of US$1.32bln, had failed to demonstrate that they could deliver the promised service.
“We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements,” said FCC chairwoman Jessica Rosenworcel.
“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 US$600 dish—with nearly US$900mln in universal service funds until 2032.”
In a bizarre turn, FCC Commissioner Brendan Carr responded to the timing of the announcement and the decision.
“I am surprised to find out via a press release—while I am on a work trip to remote parts of Alaska—that the FCC has made this significant decision.
“I will have more to say because we should be making it easier for unserved communities to get service, not rejecting a proven satellite technology that is delivering robust, high-speed service today.”
Carr is the senior Republican on the FCC and was nominated by President Trump. He previously served as the FCC's General Counsel.
The FCC decision came as part of a busy few days for SpaceX, which took its total of Starlink internet satellites in orbit above 3,000 with 52 more launched via its latest Falcon 9 mission.
SpaceX also carried out a first test firing of its Super Heavy booster on its launch pad, which was a big milestone in the development of its Starship deep-space transportation system that is expected to provide a giant leap for the whole space sector by greatly reducing the cost of getting into space.
The first orbital test flight of SpaceX's Starship vehicle won't get off the ground in August.