Elon Musk's Starlink Loses $886M Subsidy to Expand Rural Internet Access

The FCC wasn't convinced the SpaceX division "could deliver the promised service."

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Andrew Blok is a former editor for CNET who covered home energy, with a focus on solar. As an environmental journalist, he navigates the changing energy landscape to help people make smart energy decisions. He's a graduate of the Knight Center for Environmental Journalism at Michigan State and has written for several publications in the Great Lakes region, including Great Lakes Now and Environmental Health News, since 2019. You can find him in western Michigan watching birds.
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Starlink antenna dish on Mt. Diablo

A Starlink antenna dish sitting atop Mount Diablo near San Francisco.

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In a reversal of a 2020 decision, the US Federal Communications Commission has decided to reject Starlink's application for $886 million in subsidies to expand rural broadband coverage. Starlink "failed to meet program requirements," and the program was too risky, the commission said in a release Wednesday.

"Starlink's technology has real promise, 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," said FCC Chairwoman Jessica Rosenworcel.

Another applicant, LTD Broadband, also lost its subsidy of $1.3 million.

Locating local internet providers

Starlink delivers internet access via its fleet of more than 2,000 low-orbit satellites, which beam web data down to its satellite dishes, even in rural places that don't have ground-laid internet. It isn't the only satellite internet provider, but it's the fastest, according to the internet service analysts at Ookla.

Earlier this year, Starlink's prices increased. Customers pay a one-time equipment fee of $599 for the Starlink satellite dish, and the internet connection costs $110 per month.

Locating local internet providers

SpaceX, Starlink's parent company, didn't immediately respond to a request for comment.