FCC Approves Opportunity for SpaceX to Bid in Broadband Auction

The United States’ Federal Communications Commission (FCC) has approved SpaceX as one of 386 Internet service providers that can place bids in a federal auction for funding to develop broadband access in rural regions.

According to FCC statements, companies must “demonstrat[e] to Commission staff that their networks can deliver real-world performance to consumers below the Commission’s 100ms low-latency threshold.”

The FCC program, titled the “Rural Digital Opportunity Fund (RDOF)”, will provide up to $16 billion in funding to develop improved Internet access for areas in the United States that have suffered a lack of affordable high-speed Internet access. The money will be used to develop Internet access in areas where no Internet service provider has reported offering at-home Internet access speeds of at least 25 Mbps download speed and 3 Mbps upload speed. Based on preliminary census data, there are approximately 5.3 million homes and businesses in these areas.

Internet service providers might have previously hesitated to invest in infrastructure for these regions for a variety of regions, such as low population density or low median income. The RDOF grants will at least offset some of the costs of developing Internet access for unserved areas.

SpaceX is one of only two companies with the capacity to provide satellite Internet access to win approval to bid. The other is a company known as Hughes, which has invested in OneWeb and its plan to launch satellite Internet service for regions on the wrong side of the “digital divide”. If Hughes’ bid is successful, it may help financially revive OneWeb, which has recently gone through bankruptcy.

If its final bid is successful, SpaceX will make use of its Starlink constellation to develop broadband access for areas that don’t already have ready access to high-speed Internet. It has already overcome the FCC’s doubts about its ability to provide low-latency Internet access. Due to these doubts, the FCC had previously placed SpaceX on its list of companies that have not shown that they are capable of delivering the capacity needed to deliver within the performance and latency tiers that they intend to place bids for.

With the recent launches of more Starlink satellites, SpaceX has achieved low enough latency to qualify under these standards. Recent statements from its engineers indicate that Starlink may already be capable of achieving low enough latency and high enough speed to suit high-demand applications like gaming and HD video streaming.

SpaceX is already working on a public beta for its Starlink constellation and providing satellite Internet access for the Hoh Tribe in Washington State. Hoh Tribe officials have expressed enthusiasm about the increased opportunities for access to online learning, telehealth services, and online employment through affordable high-speed Internet access.

The FCC will open formal bidding on October 29 and will require a “long form” application with more detail on how companies will fill their obligations if they win a cut of the funding. SpaceX is, fortunately, used to jumping through similar paperwork-related hoops, considering that it has recently passed NASA’s design reviews for its planned Starship-based lunar lander. With its ability to jump through this level of bureaucratic hoops and the publicly available data on Starlink’s existing performance, it stands a good chance of netting a cut of the $16 billion budget that the FCC has set aside for the Rural Digital Opportunity Fund.