A Starlink satellite terminal, also known as an antenna, installed in front of an RV.
SpaceX
The Federal Communications Commission on Wednesday denied SpaceX’s bid for nearly $1 billion in grants to support rural broadband customers through the company’s Starlink satellite Internet network.
SpaceX, which is controlled by Elon Musk, had been awarded $885.5 million in the FCC’s $9.2 billion auction in December 2020 under the regulator’s Rural Digital Opportunity Fund. The company sought funding to provide satellite Internet service to nearly 650,000 locations in 35 states, the FCC noted.
The FCC’s grants are designed to be an incentive for broadband providers to bring service to “underserved” and hard-to-reach areas of the United States.
In a press release, the FCC said that both Starlink and LTD Broadband, another company that initially received $1.3 billion in grants under the program, “failed to demonstrate that the providers could deliver the promised service.”
“We need to make the most of scarce universal service dollars as we move towards a digital future that demands ever more powerful and faster networks. We can’t afford to subsidize companies that don’t deliver on promised speeds or that do not meet the program’s requirements,” FCC Chair Jessica Rosenworcel said in a statement.
Rosenworcel added that SpaceX’s technology has “real promise,” but stressed that Starlink is still “in development.”
SpaceX did not immediately respond to CNBC’s request for comment.
Notably, the December 2020 FCC auction represented the first phase of the $20.4 billion RDOF program, meaning SpaceX will likely bid in subsequent auction rounds for the remaining funds. Musk’s company was the fourth-largest award by dollar value in the first auction among 180 bidding companies.
Starlink is the company’s plan to build an interconnected internet network with thousands of satellites, designed to deliver high-speed internet anywhere on the planet. SpaceX has launched more than 2,700 Starlink satellites into orbit, and the service had more than 400,000 subscribers as of May. The company has steadily raised capital to fund the development of both Starlink and its next-generation Starship rocket, with $2 billion brought in this year alone.
The FCC’s denial of Starlink from the RDOF program comes shortly after a separate but crucial authorization for SpaceX to provide Starlink mobile Internet service to ships, planes and trucks.