The FCC rejected SpaceX’s bid for a $886 million grant from the FCC’s Rural Digital Opportunity Fund (RDOF) on August 10. The grant would have paid for development of Internet access for 650,000 places that have not had adequate access to the Internet. This lack of access is frequently referred to as the “digital divide.”
The FCC claims that SpaceX has not demonstrated adequate capacity to deliver Internet to the target regions. It also rejected LTD Broadband’s bid for similar reasons.
SpaceX disputes the FCC’s reason for the rejection. Regulatory paperwork filed by SpaceX director of satellite policy David Goldman called the rejection “flawed as a matter of both law and policy.”
Goldman claims that the FCC allegedly cherry-picked information from the Internet to justify the rejection. He says it will leave Americans in remote or low-income areas “stranded indefinitely on the wrong side of the digital divide.”
FCC commissioner Brendan Carr also criticized the decision, calling the rejection a baseless reversal of a previous decision with no plan to replace it. He called it “without a lawful basis” and accused the FCC of exceeding its authority.
Carr did mention that the decision was made by one of the bureaus and it could be appealed to the full FCC Commission.
SpaceX has made numerous efforts to demonstrate Starlink’s ability to close the digital divide. These efforts include making deals with the Cherokee Nation and Hoh Tribe. It also made a deal with a school district in Texas to provide Internet access for low-income families with students in the district. Demand for access to Starlink has been so high that it previously had to push delivery of some terminals back to 2023.
SpaceX is working with the UK on access to Starlink in rural areas. It is also working with Brazil and Chile to bring Internet access to remote communities.
Starlink’s upload and download speeds are already nearly equal to “traditional” landline-based broadband Internet access. Beta testers reported that the terminals work well even in freezing weather, likely due to an internal heating unit. If your Starlink Internet service turns ratty in the winter, you may want to check your terminal for outdoor cats seeking a break from the cold.
The FCC had previously communicated with SpaceX about appropriate use of grant money. The communication primarily involved exactly where SpaceX planned to deliver the Internet access.