FCC Rejects Space X’s Request For $900 Million In Aid For Starlink Internet

Elon Musk, chief executive officer of Tesla Inc., speaks via video link during the Qatar Economic Forum in Doha, Qatar, on Tuesday, June 21, 2022. The second annual Qatar Economic Forum convenes global business leaders and heads of state to tackle some of the world's most pressing challenges, through the lens of the Middle East. Photographer: Christopher Pike/Bloomberg

SpaceX’s Elon Musk was recently disqualified from a bid for $885.5 Million in assistance through the Rural Digital Opportunity Fund of the FCC. Although the subsidy was intended to support Elon Musk’s Starlink satellite internet, the agency stated that Musk’s company had “failed to prove” it could deliver on its promises.

Engadget reported that Starlink, a satellite internet company owned by Elon Musk’s SpaceX space exploration company, was denied $885.5 million in assistance through the Rural Digital Opportunity Fund. FCC stated that the broadband provider had “failed to prove” it could provide the services it claimed.

Jessica Rosenworcel is the chair of FCC. She said Starlink had “real potential” but that it was impossible for the agency to justify 10 years worth of subsidies for “developing tech.” This subsidy requires that users own a $600 satellite dish. She pointed out that the FCC was trying to maximize “scarce funding” for broadband expansion.

SpaceX won through an auction its bid for subsidies in December 2020. SpaceX stated that it would use subsidies to service 35 locations. It also promised prices comparable to terrestrial broadband and that it would fulfill “periodic” requirements for service buildout.

LTD broadband, a fixed-wireless provider, was awarded over $1.3B in the auction, but it lost another bid this week. After losing its qualifying status in seven states, the FCC stated that the company was not “reasonably able” to deploy the internet services promised.

SpaceX’s FCC subsidy rejection is not necessarily a blow to its plans. However, it seems that Elon Musk may have changed his long-standing method of financing private companies using government subsidies.