FCC plugs loopholes that let telecoms companies use rural broadband subsidies for urban areas

The Federal Communications Commission told SpaceX and other companies recently that "that the billions in rural broadband subsidies it doled out last year can’t be used in already connected areas like 'parking lots and well-served urban areas,' citing complaints," Joey Roulette reports for The Verge, a publication of Vox Media. "The commission, in an effort to 'clean up' its subsidy auction program, offered the companies a chance to rescind their funding requests from areas that already have service. The companies that got the subsidies must do the work to determine they qualify for the money."

SpaceX’s satellite internet network Starlink won $886 million last December as part of the FCC's Rural Digital Opportunity Fund, a $9.2 billion auction meant to expand rural broadband. But the auction was riddled with wasteful spending and widespread data flaws, according to reports from the Competitive Carriers Association and consumer-advocacy group Free Press, Roulette reports. 

The Free Press report found that over $700 million in RDOF funds had been awarded to areas that already have broadband access. In particular, $111 million of SpaceX's share was going to "well-served urban areas and random patches of land with no infrastructure, from thin highway medians and empty patches of grass to New York City parking lots and big-box stores," Roulette reports. "The RDOF subsidies were announced under former FCC chairman Ajit Pai, a Republican who left office when President Biden became president."