Elon Musk's SpaceX Loses $900-M In U.S. Broadband Subsidies
Federal regulators announced Wednesday (Thursday, August 11, 2022, in Manila) that SpaceX will not receive $900 million in subsidies that it secured in December, citing the fact that its satellite-based service is "still developing technology" and "failed to demonstrate that it could deliver the promised service," Jackie Wattles reported for CNN Business.
Photo Insert: The SpaceX Starlink Mission
The Federal Communications Commission (FCC) had earmarked the funds for SpaceX's Starlink internet service as part of the agency's largest-ever subsidy program designed to quickly get internet access to people across rural America, where three out of five people say access to high-speed internet is still a pressing issue.
SpaceX was slated to receive a total of $856 million, one of the largest chunks of the $9 billion that was auctioned off. But that will no longer happen.
"After careful legal, technical, and policy review, we are rejecting these applications," FCC chairwoman Jessica Rosenworcel said in a statement.
"Consumers deserve reliable and affordable high-speed broadband. We must put scarce subsidy dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks. We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements."
The FCC also observed data that "indicate that Starlink's speeds have been declining from the last quarter of 2021 to the second quarter of 2022."
SpaceX has said that it already has more than 400,000 customers across the globe, and the company has poured resources into building up the service. It's already launched nearly 3,000 satellites, which work in tandem to beam internet access to the ground.
That's a far different approach than traditional high-speed internet, which relies on underground fiber optic cables. FCC also said it's denying a $1.3 billion award earmarked for LTD Broadband, citing the fact that the internet service provider failed to obtain proper status and approvals for service in seven states.
The Wireline Competition Bureau, which develops telecommunications policy, said “LTD and Starlink are not reasonably capable of complying with the Commission's requirements.”