FCC rescinds SpaceX funding for broadband services in rural America; decision affects customers in 35 states

Elon Musk, Chief Executive Officer of SpaceX 
(Photo by Gonzalo Fuentes, Reuters)

The Federal Communications Commission has refused to reinstate SpaceX's roughly $900 million in rural broadband subsidies, which were to be used to provide high-speed internet services to rural customers in 35 states. The work was scheduled to be handled by the company's satellite internet unit Starlink to improve rural internet access. "The FCC said the decision impacting Elon Musk's space company was based on Starlink's failure to meet basic program requirements," reports David Shepardson of Reuters. "And that Starlink could not demonstrate it could deliver promised service after SpaceX had challenged the 2022 decision."

"The FCC had rescinded the funding in August 2022 based on speed-test data after Starlink had agreed to provide high-speed Internet service to 642,000 rural homes and businesses in 35 states," Shepardson writes. Jon Brodkin of Ars Technica reports, "The [August rejection ruling] called Starlink a 'nascent LEO [low Earth orbit] satellite technology' with recognized capacity constraints.' The FCC questioned Starlink's ability to consistently provide low-latency service with the required download speeds of 100Mbps and upload speeds of 20Mbps."

SpaceX filed a reply to the denial, saying the company was "deeply disappointed and perplexed by the Commission's decision to exclude SpaceX's Starlink from the Rural Digital Opportunity Fund. This decision directly undermines the very goal of RDOF: to connect unserved and underserved Americans. Starlink is arguably the only viable option to immediately connect many of the Americans who live and work in the rural and remote areas of the country where high-speed, low-latency Internet has been unreliable, unaffordable, or completely unavailable, the very people RDOF was supposed to connect."

The two Republican commissioners on the five-member FCC "dissented from the decision, saying the FCC was improperly holding SpaceX to 2025 targets three years early and suggesting the Biden administration's anger toward Musk was to blame," Shepardson reports. "Musk said in a post on X the FCC decision 'doesn't make sense. Starlink is the only company actually solving rural broadband at scale! They should arguably dissolve the program and return funds to taxpayers, but definitely not send it (to) those who aren't getting the job done.'"