Gov't Refuses Starlink Satellite Internet Subsidy

A satellite Internet company has slammed the Federal Communications Commission (FCC) for refusing to subsidize its expansion. Starlink wanted the public money that is normally given to wired Internet companies to reach rural areas.

The FCC said Starlink hadn't done enough to prove it could live up to its promises and said the technology wasn't developed enough.

The argument is about how the FCC allocates a $9.2 billion fund that's designed to subsidize companies to build or extend broadband access in places where it wouldn't be profitable to do so otherwise. Starlink had bid in an auction to get the subsidy to cover homes in specific parts of the country.

Starlink, which is owned by Elon Musk's SpaceX, bid for $886 million from the fund. It wouldn't spend the money building cable connections to rural areas but instead would reduce the costs of the service. Although the satellite network is accessible from most parts of the US, users need a special dish and router that costs around $600. (Source: msn.com)

Decision Overturned

The FCC provisionally awarded the money to Starlink at the end of 2020, but reversed its decision after further review. One of the big points of dispute is the speeds on offer.

Under the rules of the subsidy, services will need to provide consistent speeds of 100 Mbps download and 20 Mbps upload. The FCC says test data shows Starlink is falling short of that right now.

However, Starlink has appealed the withdrawal of the funding, arguing that the rules actually say the service must be at those speeds three years from now. It's confident it will reach those speeds by then. It also argues that the FCC hasn't taken into account the fact that the SpaceX setup means its easy for it to upgrade its networks with new satellites.

Price Comparison Murky

There's also a dispute over the cost. The FCC believes that even with any subsidy, the $600 equipment cost and $99 monthly fee is too expensive to make it a reasonable proposition for people who don't currently have broadband.

Starlink says that's an unfair comparison because it uses straightforward pricing compared with cable-based providers who often use hidden fees such as installation costs, equipment rental and promotional service fees that shoot up during the contract. (Source: arstechnica.com)

Analysts believe it's likely the FCC will reject the appeal, but there's a chance Starlink could then take the issue to court.

What's Your Opinion?

Should satellite Internet be eligible for public subsidy in the same way as wired broadband? Does it make a difference that satellite Internet doesn't require network construction in a specific location? Should the federal government be subsidizing broadband expansion at all?