SpaceX rural broadband plan may be too pricey, and it appears to have exploited flawed FCC broadband maps

The Federal Communications Commission recently awarded SpaceX $885 million to bring broadband internet to rural America via its Starlink satellite service, but the service may end up being too expensive for many rural residents, and the company is spending nearly 13 percent of the money on urban broadband expansion because of flawed FCC data maps, critics say.

"While underserved communities will be happy to have access to faster Internet, it can be expensive," Geoff Herbert of Syracuse.com writes for GovTech. "CNBC reported in October that Starlink’s 'beta' service costs $99 a month — plus a $499 upfront cost to order the Starlink kit. The kit includes a user terminal to connect with SpaceX satellites and a Wi-Fi router that can be controlled by a Starlink app on Google and Apple devices."

Not only will $111 million of SpaceX's funding will support urban broadband expansion, across all 180 internet service providers that received funding in the latest tranche of $9.2 billion, more than $700 million will go for non-rural development, reports Derek Turner, research director at advocacy group Free Press. "Turner has a strong track record analyzing FCC broadband data and last year found major errors in Pai's broadband-deployment claims," notes Jon Brodkin of ArsTechnica.

Some of the locations for which SpaceX won funding include several major airports, census blocks with luxury hotels in Chicago, and a parking garage in downtown Miami Beach, Turner reports. That's possible because ISPs exploit a design flaw in the FCC's mapping system. "ISPs are [required] to report the blocks where they currently offer service or could without extraordinary use of resources within a 10-day period," Turner told Brodkin in an email. "Thus a block can show up as 'unserved' even though it isn't any more expensive than any typical block to serve; it just means an ISP didn't claim the block."

SpaceX "appears to have played by the rules. But the FCC's rules created a broken system," Turner reports. "By bidding for subsidies assigned to dense urban areas, Musk's firm and others were able to get potentially hundreds of millions in subsidies meant for people and businesses in rural areas that would never see broadband deployment without the government's help."