FCC had denied Starlink nearly $900 million in government funds
Starlink is appealing the Federal Communications Commission’s decision to deny the company nearly $900 million in funding that it won through the Rural Digital Opportunity Fund to connect unserved areas across the United States.
In its appeal filing, Starlink parent SpaceX argued that the FCC’s decision is “flawed as a matter of both law and policy. It fails legally because it contradicts the record—including SpaceX’s and Starlink’s proven capabilities—it contradicts the Commission’s stated rules for the program, and it rests on unsupported conjecture and outside-the-record information apparently cherry-picked from somewhere on the Internet. …
“This decision is so broken that it is hard not to see it as an improper attempt to undo the Commission’s earlier decision, made under the previous administration, to permit satellite broadband service providers to participate in the RDOF program,” the filing reads.
RDOF provides $9.23 billion in subsidies to be doled out over a decade, in support of high-speed rural broadband deployment. Preliminary awards were made as a result of an auction process in which service providers bid for RDOF projects; Starlink won around $885.5 million in work.
However, post-RDOF-auction, there has been the controversy over small, untried providers winning hundreds of millions of dollars in subsidies for multi-state networks as well as accusations that areas receiving RDOF funds were already sufficiently served by broadband. In response to concerns over whether those providers could actually build and meet the metrics that they were promising to provide, the FCC ultimately came up with a Rural Broadband Accountability Plan, announced earlier this year, in order to better monitor and ensure that the promised universal service networks could be, and were being, delivered. That plan included, for the first time, making public some of the FCC’s verification data on the performance of the delivered networks, including speed and latency testing, through the website of the Universal Service Administration Company, which is the non-profit administrator of the FCC’s Universal Service Fund (USF). It also included closer scrutiny of “large and higher-risk” support recipients.
Last month, Starlink and one other provider another provider, the small WISP LTD Broadband, had their applications for RDOF work denied by the FCC, essentially losing the funds. LTD had won the largest amount— more than $1.32 billion in RDOF funding.
“Starlink’s technology has real promise,” said FCC Chairwoman Jessica Rosenworcel in a statement upon the announcement of the funding denials. “But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032.”
According to Ookla analysis, Starlink achieved a median download speed of 100 Mbps in the U.S. in the fourth quarter of 2021. But by the first quarter of 2022, that was down to around 91 Mbps, while upload speeds saw a year-over-year decline of 33% compared to the first quarter of 2021. Starlink performance also “[varies] widely at the county level,” Ookla has found: “Widely”, meaning a 130-Mbps difference between the fastest and slowest median speeds was found during testing in late 2021.
But SpaceX argues that the FCC improperly denied Starlink the funding based on its current network speeds, when RDOF doesn’t hold service providers accountable for speed requirements until three years from now; that the agency ignored evidence, such as Starlink’s launch record, that the company was capable of rapidly expanding and upgrading its network; and unfairly compared Starlink’s current pricing with what it might offer in RDOF territories. “SpaceX never claimed it would use its current pricing in the RDOF territories (indeed by law it cannot),” the filing says. It goes on to emphasize that the decision “holds SpaceX to standards not adopted by the Commission for the
RDOF program. Indeed, these are standards that no bidder could meet today. Changing the
rules to undo a prior policy is grossly unfair after SpaceX has invested thousands of employee hours and millions of dollars preparing to meet its RDOF obligations on the reasonable assumption that the Bureau would apply the Commission’s rules in an even-handed manner. … The decision should not be allowed to stand, leaving the people in these rural areas across our country behind yet again.”
