FCC reverses Starlink's $886 million subsidy from mishandled Ajit Pai auction

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The Federal Communications Commission (FCC) has denied Starlink's request to receive $885.51 million in broadband funding, essentially reversing a grant made by the FCC during the chairman's tenure. the time, Ajit Pai.

Starlink tentatively received the Rural Digital Opportunity Fund (RDOF) grant in December 2020. But the satellite provider still needed FCC approval for a detailed application to receive the money, which is intended for areas with little or no high-speed broadband access.

We wrote about the potential issues with the SpaceX grant a week after the FCC's reverse auction, in which ISPs offered grants organized by census blocks. Consumer advocacy group Free Press accused Pai of "subsidizing broadband for the wealthy", pointing out that Starlink received money in urban areas, including locations in or near major airports. /p>

Today, FCC Chairman Jessica Rosenworcel announced that it has denied detailed applications by Starlink and LTD Broadband. The FCC said Starlink and LTD "failed to meet program requirements", submitted "risky proposals", and that their "requests did not demonstrate that the providers could provide the promised service".

> The FCC cites a dish cost of $600

The Starlink grants were supposed to fund broadband for 642,925 homes and businesses in 35 states. The loss of subsidies may not have much impact on actual Starlink availability, as satellite service is not geographically restricted in the same way wired networks are.

"After careful legal, technical and political review, we reject these apps. Consumers deserve reliable, affordable broadband," Rosenworcel said. "We must make the best use of scarce universal service dollars as we move into a digital future that demands ever stronger and faster networks. We cannot afford to subsidize companies that do not deliver the speeds promised or are not likely to meet the program requirements."

The grants were for specific census blocks, even though Starlink doesn't have to build the typical infrastructure needed when ISPs expand into new geographies. Starlink relies on its own satellites in low Earth orbit, the user terminals that each customer purchases, and ground stations dispersed in each country in which it operates. (SpaceX said laser links on Starlink satellites reduce the need for these ground stations.)

Rosenworcel raised concerns about Starlink technology and the $600 price each customer has to pay in upfront hardware costs. "Starlink's technology is really promising," Rosenworcel said. "But the question before us was whether to publicly subsidize its still-in-development technology for consumer broadband, which requires users to purchase a $600 dish, with nearly $900 million in universal service fund until 2032."

Starlink labeled as 'nascent' technology with 'capacity constraints'

In a public notice that provided more details, the FCC called Starlink an “emerging LEO satellite technology” with “recognized capacity constraints.” The FCC questioned Starlink's ability to consistently provide low latency service with the required 100 Mbps download speeds and 20 Mbps upload speeds. The FCC also cited Ookla speed test data showing a drop in Starlink speeds in the second quarter of 2022, "including download speeds that drop well below 20 Mbps".

FCC Wireline's Competition Bureau says it received "inadequate responses" to follow-up questions from Starlink and LTD. As a result of the ruling, both ISPs are now "in default on all winning bids that have not yet been announced as default," the FCC said.

LTD was to receive even more money than S...