Elon Musk's SpaceX has a month to convince officials at the Federal Communications Commission that its service is up to snuff to participate in an upcoming auction for government subsidies to deliver broadband to rural parts of the country. The agency said it has "serious doubts" that low-Earth orbit satellite providers, like SpaceX, will be able to meet latency requirements to qualify for participation in the auction.
The agency made these assertions in a report published last week detailing the requirements and procedures for the first phase of the Rural Digital Opportunity Fund auction set to begin in October. The FCC said it would allow low-Earth orbit satellite companies to apply for funds as low-latency broadband providers, but it said it was doubtful these companies could meet the sub-100 milliseconds latency requirement.
"We are … unaware of any low-Earth orbit network capable of providing a mass market retail broadband service to residential consumers that could meet the commission's 100 ms round-trip latency requirements," the FCC said. "We therefore have serious doubts that any low-Earth orbit networks will be able to meet the short-form application requirements for bidding in the low latency tier."
SpaceX, the most well-known company promising broadband via low-Earth orbiting satellites, announced this weekend it had deployed 58 satellites into orbit. With its latest launch of satellites, it now has about 500 satellites in orbit. But Starlink, SpaceX's broadband brand, has yet to offer a commercial service. The company says it should have a limited offering in the northern US and Canada by the end of the year with service expanded globally throughout 2021.
SpaceX claims its technology can meet the FCC's latency requirements. In a May 29 ex parte letter filed with the FCC describing a phone conversation between SpaceX and FCC staff, the company said it had "explained that its system easily clears the commission's 100ms threshold for low-latency services, even including its 'processing time' during unrealistic worst-case situations."
But the clock is ticking if SpaceX wants to take advantage of the FCC's first round of government subsidies for its new Rural Digital Opportunity Fund. The rules for the $20.4 billion fund call for the money to be allocated in two phases using a reverse auction to distribute the money. The first phase, which will begin in October, will allocate $16 billion in funding for areas of the country where no high-speed broadband is available today. Companies must submit auction applications by July 15, giving SpaceX exactly one month to convince the FCC.
The FCC initially approved SpaceX's plan to provide global satellite broadband service in 2018. The goal is to provide low-latency broadband to rural and remote places with little or no internet access and to improve speeds and coverage in areas where access is not as robust. Eventually the company hopes to build a mega constellation of 12,000 satellites delivering broadband across the globe.
Latency, or the time it takes for signals and data to travel between locations, is critical for real time applications like voice and video calls. Long latency will cause video streams to buffer, resulting in spotty, sputtering calls. This is the problem associated with most other satellite internet services, like Viasat or HughesNet. These services rely on a handful of big satellites in geostationary orbit, over 22,000 miles (35,000 kilometers) above Earth to provide broadband service. Because signals and data have to travel back and forth such long distances, these satellite services often have high levels of latency.
The FCC said in its report that it would not even consider high or medium orbiting satellite broadband providers to bid on the low-latency tier of the auction.
Starlink's lower-altitude constellations use a swarm of satellites to provide low-latency connectivity that performs more like a cable or fiber-optic connection. At least that's how it's expected to work in theory, according to SpaceX. FCC officials have their doubts, and they don't seem willing to gamble government subsidies on SpaceX's promises.
"The record demonstrates significant concern regarding applicants that propose to use technologies that have not been widely deployed to offer services at high speeds or low latency, or have not been deployed at all on a commercial basis to retail consumers," the FCC said. "Auction 904 is not the appropriate venue to test unproven technologies using universal service support."