Starlink: FCC rejects SpaceX’s request for $1 billion in subsidies to cover customers in rural areas

The Federal Communications Commission (FCC) has just denied SpaceX’s request for nearly $1 billion in grants that would have provided broadband coverage to rural customers through the company’s satellite internet service, Starlink.

The FCC, the federal communications commission in the United States, rejected SpaceX’s request on Wednesday. In a press release, the FCC said that two companies, Starlink and LTD Broadband, “failed to demonstrate that suppliers could deliver the promised service” necessary to receive the grants.

SpaceX does not meet FCC requirements

According to CNBC, SpaceX received $885.5 million in the FCC’s $9.2 billion auction in December 2020, as part of the Rural Digital Opportunities Fund of the regulator. Additionally, the company had sought funding to provide satellite internet service to nearly 650,000 locations in 35 US states, the FCC noted.

The FCC subsidies are designed to encourage Internet service providers to offer their services in unserved and hard-to-reach areas in the United States, recalls the media. Yet the FCC says Starlink and LTD Broadband (another company that originally received $1.3 billion in subsidies under the program) failed to prove they could deliver their services.

“We must make the best use of the limited financial resources of universal service as we move towards a digital future that demands ever stronger and faster networks. We can’t afford to subsidize companies that don’t deliver promised speeds or aren’t likely to meet program requirements.”

FCC Chairman Jessica Rosenworcel

According to the FCC chairman, SpaceX’s technology was “really promising” but she pointed out that Starlink was still in ” development “, reports CNBC. SpaceX could, however, make another request in future auctions for the remaining funds.

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