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By TechThop Team
Posted on: 11 Aug, 2022
SpaceX's Starlink and LTD Broadband's applications for more than $2 billion in subsidies for Internet service were rejected by the US Federal Communications Commission on Wednesday.
A tentative $9.2 billion will be awarded by the FCC in December 2020 to 300 bidders interested in deploying high-speed broadband in rural areas. In the 2020 auction, LTD Broadband won $1.32 billion and SpaceX's Starlink network won $885.5 million.
A request for comment was sent to SpaceX, which is run by the billionaire Elon Musk, but a response was not received immediately.
Starlink's technology has real promise,' said FCC Chairwoman Jessica Rosenworcel in a statement announcing the agency's rejection of the company's long-form applications.
As a result, the FCC was reluctant to publicly subsidize Starlink's developing technology, especially since users have to purchase the $600 dish to use the technology.
The company, which has tower sites in the states of Iowa, Minnesota, Nebraska, South Dakota, and Wisconsin, said in a statement that it has been 'extremely disappointed' by the decision.
The FCC did not fully appreciate the benefits LTD Broadband would bring to millions of rural Americans. We are reviewing the letter, and we will evaluate our next steps,' LTD Broadband's CEO, Corey Hauer, told Reuters by email.
As the FCC noted, Starlink relies on nascent low-earth orbit satellite technology and is seeking funding for 100/20 Mbps Internet service in 642,925 locations across 35 states using its constellation.
As we move into a digital future demanding ever more powerful and faster networks, we must make optimal use of scarce universal service dollars, Rosenworcel said.
As a result, it is not feasible for us to subsidize vertically integrated ventures that do not deliver the promised speeds or that do not have a high probability of meeting program requirements.
As a result of the FCC's investigation, both companies provided inadequate responses to commission questions and therefore would not be able to comply with the commission's requirements.
According to FCC data as of July 31, Starlink's speeds declined between the last quarter of 2021 and the second quarter of 2022, and its upload speeds have fallen well below 20 Mbps.
The launch of 2,700 Starlink satellites in 2019 has resulted in hundreds of thousands of subscribers, including many who pay $110 for broadband Internet through self-install terminal kits that cost $599 each.
As of this writing, more than 3 million locations in 47 states have been able to get broadband service backed by the rural Internet subsidy program through FCC funding of more than $5 billion.
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