Regulators scrap bid by Musk’s Starlink for $885 million in subsidies to deliver rural broadband

The Federal Communications Commission on Wednesday rejected an application for Elon Musk’s Starlink satellite internet project to collect $885 billion in subsidies to provide broadband to rural Americans.

Starlink, part of the tech tycoon’s SpaceX enterprise, provides high-speed internet access through connections to satellites in low-earth orbit. The FCC said that Starlink failed to demonstrate it could “deliver the promised service.”

“Starlink’s technology has real promise,” Jessica Rosenworcel, FCC chair, said in a statement. “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.”

SpaceX, which was founded two decades ago by Mr. Musk in 2002, won more than $885 million in initial auction results in 2020 through the Rural Digital Opportunity Fund program. The FCC awarded $9.2 billion in the initial auction to 180 bidders. 

Ms. Rosenworcel said Wednesday’s rejection was the result of careful legal, technical and policy review. 

“We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements,” she said. 

SpaceX did not respond to a request for comment. 

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