Starlink Loses FCC Subsidy Over Broken Promises

The Federal Communications Commission (FCC) last week reaffirmed its 2022 decision to deny nearly $900 billion in rural broadband subsidies to SpaceX’s Starlink, Reuters reported.

In its December 12 decision, the FCC said SpaceX’s internet satellite service did not meet basic program requirements and after Starlink challenged the FCC’s 2022 decision, it failed to demonstrate that it could deliver the services it promised.

FCC Chair Jessica Rosenworcel said the agency conducted a “careful legal, technical, and policy review,” and determined that Starlink “failed to meet its burden.”

In reaffirming its previous decision, the FCC pointed to SpaceX’s failure to successfully launch its Starship rocket and questioned whether any future failed launches could “impact Starlink’s ability” to fulfill its obligations to the FCC.

Starlink had agreed to provide high-speed internet for 642,000 homes and businesses in rural areas throughout 35 states. However, the FCC initially rescinded the subsidies in August 2022 based on speed test data.

SpaceX said it was “disappointed and perplexed” by the decision, arguing in a statement that Starlink is “likely the best option” to achieve the FCC’s goal of providing high-speed internet to rural areas.

The two Republican commissioners on the 5-member Federal Communications Commission dissented from the decision, arguing that the FCC was unreasonably holding Starlink to its 2025 targets three years too soon. The commissioners suggested that the Biden administration’s animus toward SpaceX CEO Elon Musk could be behind the FCC’s decision.

Republican commissioner Brendan Carr described the decision as part of the Biden administration’s “pattern of regulatory harassment” against CEO Elon Musk.

In a post on his social media platform, the SpaceX CEO said the FCC’s decision didn’t make sense.

Arguing that Starlink was the only company that had solved the problem of rural internet access, Musk said it would be better for the FCC to “dissolve the program” and give the money back to taxpayers than to give the subsidies to a company that won’t get the job done.