FCC Cancels $886 Million In Funding For SpaceX's Starlink

The FCC is canceling $886 million in funding for Starlink to expand access in rural areas, citing the satellite internet system's cost and doubts over whether it can supply fast enough speeds. PC Magazine reports: The agency today announced it had rejected 'long-form applications' from both SpaceX and an ISP called LTD Broadband to secure funding from the FCC's Rural Digital Opportunity Fund. 'The Commission determined that these applications failed to demonstrate that the providers could deliver the promised service,' the FCC said in a statement. FCC Chairwoman Jessica Rosenworcel added: 'We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.'

In December 2020, the FCC awarded $886 million to SpaceX to help its Starlink service supply high-speed broadband to 642,925 locations in 35 states. However, it came with a requirement that SpaceX provide a long-form application about how Starlink would meet its obligations before the federal funding could be fully secured. The FCC's goal with the Rural Digital Opportunity Fund is to supply gigabit internet speeds to over 85% of the selected rural locations and at least 100Mbps download speeds for all 99.7% of the locations in the coming years. 'Starlink's technology has real promise,' Rosenworcel said. 'But the question before us was whether to publicly subsidize its still developing technology for consumer broadband -- which requires that users purchase a $600 dish -- with nearly $900 million in universal service funds until 2032.'

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