Starlink can be used to access internet even from the most remote locations. Credits: SpaceX

FCC Confirms Denial of $900 Million Subsidies for Starlink

FCC maintains denial of $900 million subsidies for SpaceX's Starlink, citing failure to meet rural broadband requirements. Is it all that clear, though?

In a recent development, the Federal Communications Commission (FCC) has maintained its decision from last year, denying SpaceX’s Starlink nearly $900 million in rural broadband subsidies.

Starlink can be used to access internet even from the most remote locations. Credits: SpaceX
Starlink can be used to access internet even from the most remote locations. Credits: SpaceX

This final denial, reaffirmed on December 12, underscores the FCC’s stance that Starlink, SpaceX’s satellite broadband service, did not meet the necessary requirements to participate in the Rural Digital Opportunity Fund (RDOF).

FCC Chair Jessica Rosenworcel, in a news release, emphasized that the denial resulted from a meticulous review encompassing legal, technical, and policy considerations. SpaceX had initially secured provisional approval for the subsidies in December 2020, having participated in an auction during the first phase of the RDOF process.


Advertisement

Are speedtests good evaluation parameters?

The proposed funding for SpaceX amounted to $886 million over a span of 10 years, with the goal of providing high-speed broadband to nearly 643,000 homes and businesses across 35 states. Despite winning a significant share of the multi-billion-dollar fund, the FCC found fault in SpaceX’s approach to meeting the RDOF conditions during the subsequent review.

FCC Chair Jessica Rosenworcel said that the RDOF program authorized more than $6 billion in funding to bring broadband service to remote locations in the US. Credits: Internet Education Foundation
FCC Chair Jessica Rosenworcel said that the RDOF program authorized more than $6 billion in funding to bring broadband service to remote locations in the US. Credits: Internet Education Foundation

SpaceX, alongside terrestrial telco LTD Broadband, faced challenges in demonstrating how they would deploy services that align with RDOF requirements. Both companies were denied provisionally awarded subsidies, with the FCC citing shortcomings in meeting the mandated 100 megabits per second (Mbps) download speeds and 20 Mbps upload speeds.

The commission, to determinate if Starlink was good enough for that requirement, used data coming from Ookla speed tests: yes, the same test that you usually do from your devices. In fact, the data used were average download and upload speed calculated from user-conducted tests.

A Performance Chart from Ookla that shows the median download speed of Starlink during the last year. Credits: Ookla
A Performance Chart from Ookla that shows the median download speed of Starlink during the last year. Credits: Ookla

In the third quarter of 2023, those numbers revealed that Starlink’s median download performance in the United States was 64.54 Mbps. Although this represented a slight decline from the previous quarter, it marked a 22% improvement from the same period in 2022 when the speed recorded was 53 Mbps. Median upload performance also showed an upward trend, reaching 9.72 Mbps over the three months ending in September.


Advertisement

SpaceX is not pleased…

Expressing deep disappointment and perplexity, SpaceX criticized the FCC’s decision in a letter dated December 12.

SpaceX Vice President Christopher Cardaci argued that SpaceX was singled out for not meeting RDOF speed requirements years before it was obligated to do so. Additionally, SpaceX questioned the FCC’s use of Ookla speed tests, claiming that the tests were used without warning and covered nationwide averages, including areas that would not benefit from RDOF support.

“Starlink likely recorded the fastest speeds of any operator in the locations eligible for RDOF funds, which helped Ookla—the third party to whom the Bureau apparently delegated speed tests—to conclude, “Starlink users in metro and non metro areas love Starlink” […] Starlink has also deployed its service in advance of all RDOF deployment milestones and well ahead of most, if not all, RDOF awardees.”

—SpaceX Vice President, Legal, Christopher Cardaci
Starlink V2 Mini stacked. Credits: SpaceX
Starlink V2 Mini stacked. Credits: SpaceX

According to SpaceX, the ruling also directly undermined the primary goal of RDOF: connecting unserved and underserved Americans. Cardaci argued that Starlink is “the only viable option” to promptly connect residents in rural and remote areas where reliable, affordable, or available high-speed, low-latency internet has been lacking.

“SpaceX already has the ability to provide service to its RDOF locations at RDOF-required speeds, years before it would have been required to do so. SpaceX is not aware of a single accepted RDOF participant that can make this claim.”

Looking ahead, SpaceX has outlined plans to enhance Starlink services by deploying increasingly powerful satellites. These improvements align with the company’s broader vision: iterative design.

“The [FCC] Commission approved SpaceX’s latest generation of satellites, which have four times the capacity of the previous generation, capable of being launched on SpaceX’s Falcon 9 rocket—the most reliable rocket in the world today.”


Advertisement

Not an unanimous decision for FCC

It’s noteworthy that two FCC Republican Commissioners, Brendan Carr and Nathan Simington, have dissented from the regulator’s decision to deny subsidies to Starlink, adding complexity to the ongoing debate surrounding this case.

“FCC law does not require Starlink to provide high-speed Internet service to even a single location today. As noted above, the first FCC milestone does not kick in until the end of 2025. Indeed, the FCC did not require—and has never required—any other award winner to show that it met its service obligation years ahead of time.”

is written on Carr’s statement, and he added:

“I am not aware of any other circumstance in which the FCC has looked at current speed benchmarks to determine whether an awardee is reasonably capable of meeting a speed benchmark that kicks in years down the road.”

Closing with: “Applying a speed test to those [other 2020 awardees] providers would show speeds of 0/0 Mbps.”

Rendering of Starlink V2 satellites communicating via Lasers
Rendering of Starlink V2 Lasers connecting satellites. Credits: SpaceX

The point then is: why should the FCC base its award decision upon projected data or assumptions? And this is not a single voice. Simington, in a separate statement, said:

“In 2020, the Bureau accepted SpaceX’s […] LEO broadband service to deliver high-speed, low-latency internet to specified areas by 2025. But in August 2022, based on Ookla speed test data […] the Bureau decided to rescind SpaceX’s award.”

It’s like failing a student in an exam three years before it, because as of now he doesn’t have enough knowledge to pass it.

“[The Commission] concluded that because SpaceX had not yet met the 2025 speed and latency goals, and as it was using a new kind of system and could not point to others using similar technology to meet such targets, it was not reasonably capable of meeting that goal.”


Advertisement

Edoardo Giammarino

Edoardo Giammarino

Co-Founder & Administrator. Drummer and Red Cross Volunteer, born in 1997. I like analog photography and videomaking. Firmly music-addicted.

One comment

Leave a Reply

Your email address will not be published. Required fields are marked *