Elon Musk’s SpaceX loses Starlink rural broadband subsidies
Summary
- FCC rescinds $2 billion in grants to SpaceX and an internet provider, saying they weren’t likely to meet requirements
The Federal Communications Commission rescinded more than $2 billion in grants previously awarded to Elon Musk’s SpaceX and a small internet provider after the regulator ruled the companies weren’t likely to meet requirements for government funding to help expand broadband access.
The FCC had awarded SpaceX, formally known as Space Exploration Technologies Corp., $886 million in 2020 to provide faster internet to places with poor connections or no broadband access through its Starlink satellite service.
The agency pulled $1.32 billion in grants for LTD Broadband, a small, Las Vegas-based broadband provider. LTD has struggled with missed regulatory deadlines in several of the states where it planned to expand service.
A SpaceX spokesman didn’t immediately respond to a request for comment. LTD Chief Executive Corey Hauer said the company was disappointed by the decision and was reviewing its next steps.
“I don’t believe the FCC fully appreciated the benefits LTD Broadband would bring to hundreds of thousands of rural Americans," he said.
All grants were conditioned on the winners showing that they could fulfill the terms of the program, known as the Rural Digital Opportunity Fund, through more detailed regulatory filings. The commission said Wednesday that the program’s two biggest winners hadn’t met that threshold.
“We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements," FCC Chairwoman Jessica Rosenworcel said in a statement.
Ms. Rosenworcel said that the agency had to consider whether to allocate public funds for Starlink while the SpaceX unit’s technology is still developing. She added that Starlink requires users to buy a $600 satellite dish, but described its technology as promising.
The Rural Digital Opportunity Fund had budgeted as much as $20 billion to connect Americans with slower internet connections or no reliable service at all. That figure dropped after the commission held a reverse auction for the funds that awarded $9.2 billion to 180 successful bidders. It later disqualified some winners that failed to meet its requirements.
Wednesday’s decision could shrink the program by another $2.2 billion. The commission said avoiding spending that sum will avoid drawing down the Universal Service Fund, which relies on telephone-service fees for support.
This story has been published from a wire agency feed without modifications to the text
