Saying it did not think Elon Musk's Starlink satellite broadband service could deliver the goods, as it were, the FCC has rejected its application for the Rural Digital Opportunity Fund subsidies it won at auction in 2020.
"Funding these vast proposed networks would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the United States, the Commission said in rejecting the applications of Starlink and LTD Broadband.
The FCC said both applicant's broadband proposals were 'risky' and that both had failed program requirements.
Also: FCC Ready to Hand Out More RDOF Bucks
"Consumers deserve reliable and affordable high-speed broadband," said FCC chair Jessica Rosenworcel. "We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements,” she said.
The decision did not require a vote by the commission, which was made clear by the shocked reaction of Republican Commissioner Brendan Carr.
“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," he said in a statement. "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.
"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," he said.
Rosenworcel said Starlink had "real promise," but giving it nearly $900 million in USF funds through 2032 for users to purchase a $600 dish" was not something the FCC was going to do. Same goes for LTD Broadband.
Starlink won $885,509,638.40 in the RDOF auction back in 2020 and LTD Broadband won $1,320,920,718.60.
To date, RDOF has authorized more than $5 billion in funds for, primarily fiber gigabit broadband, to over 3 million locations in 47 states.
In its RDOF auction, the FCC allocated $20 billion for 1) rural broadband buildouts ($16 billion) and 2) unserved areas ($4 billion) over the next 10 years.
Carriers bid on how economically they could deliver service that met FCC speed and build-out metrics. The money is for fixed voice and broadband service to unserved, high-cost, areas at speeds of at least 25/3 Mbps.
"The FCC’s denial of SpaceX’s bid for RDOF subsidies for Starlink is exciting and stunning news for all Americans," said Gary Bolton, president of the Fiber Broadband Association. "The Fiber Broadband Association and the NTCA supplied the technical assessment and model to aid the FCC’s evaluation of Low Earth Orbiting (LEO) Satellite broadband networks, and we could not be more pleased that this contribution has been successful in convincing the agency of the limited capabilities of satellite broadband networks." ■
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.