The Federal Communications Commission (FCC) has rejected bids from SpaceX and LTD Broadband for subsidies as part of the Rural Digital Opportunity Fund program, the regulator announced on Wednesday.
"After careful legal, technical, and policy review, we are rejecting these applications. Consumers deserve reliable and affordable high-speed broadband," said FCC Chairwoman Jessica Rosenworcel. "We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks. We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements."
Rosenworcel noted the ongoing development of Starlink technology, and the higher costs associated with it, including the required $600 purchase of a satellite dish. The RDOF is set to have multiple rounds of bidding during later phases of the program, which could give SpaceX another chance at subsidies. Rosenworcel noted that Starlink technology still showed "real promise," likely opening for a second try if SpaceX can meet the RDOF's needs.
LTD Broadband's bids were withdrawn due to the company's size and the FCC's belief that it "was not reasonably capable of deploying a network of the scope, scale, and size required" by its winning bids. LTD had also yet to receive telecom carrier status in seven of the fifteen states it had won bids in.
Despite LTD Broadband's much smaller size compared to SpaceX, the company was the largest recipient of RDOF funds in the first round of bidding. Roughly $1.3 billion in subsidies had been lined up for LTD's broadband rollout in over 500,000 locations throughout the U.S.
SpaceX was awarded roughly $886 million to deploy its Starlink technology at almost 643,000 locations across 35 states.
The loss of subsidies and the associated business will likely ding SpaceX, though the aerospace titan still has plenty of opportunities lined up for itself compared to LTD. SpaceX's satellite internet has received immense attention for its widespread use by Ukrainian armed forces, so much so that the U.S. Air Force has awarded SpaceX a contract to help support its operations in Europe, Asia, and Africa.
What's Next for the RDOF?
Axing SpaceX and LTD Broadband frees up nearly $2.2 billion in additional funding to be used at later stages of the program, which is set to gradually introduce high-speed internet to rural America over the course of a decade.
Rollout efforts appear to be somewhat delayed as the FCC reviews applications, with SpaceX and LTD Broadband's rejection likely coming as a result of that process. Senators Roger Wicker (R-MS) and John Thune (R-SD) sent a public letter in July seeking an update on the delays.
Charter Communications
