FCC cancels $886 million Starlink grant from mismanaged Ajit Pai auction

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The FCC denied Starlink’s request to receive $885.51 million in broadband funding, essentially canceling a grant the FCC had awarded during then-chairman Ajit Pai’s tenure.

Starlink was Temporarily awarded Rural Digital Opportunity Fund (RDOF) grant in December 2020. But the satellite provider still needs to be approved by the FCC for a long-running application to receive funds, which is intended for areas with little or no high-speed broadband access.

We’ve written about potential problems with a SpaceX grant A week after the FCC reverse auction, where ISPs bid on grants organized by census groups. Consumer advocacy group Free Press accused eBay of “support[ing] broadband for the wealthy,” noting that Starlink has taken money in urban areas including locations at or adjacent to major airports.

Today, FCC Chair Jessica Rosenworsel announce They declined long requests from Starlink and LTD Broadband. The FCC said both Starlink and LTD “failed to meet program requirements,” made “risky proposals,” and that their “applications failed to demonstrate that service providers could provide the promised service.”

FCC cites a cost of $600

The Starlink grants were to fund broadband to 642,925 homes and businesses in 35 states. Loss of grants may not affect Starlink’s actual availability much because satellite service is not geographically restricted in the same way as wired networks.

“After careful legal, technical and policy review, we reject these applications,” Rosenworcel said. “Consumers deserve high-speed, reliable and affordable broadband.” “We must put our scarce universal service funds to their best possible use as we move toward a digital future that requires ever more robust and faster networks. We cannot support projects that do not deliver the promised speeds or are unlikely to meet program requirements.”

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The grants were for specific census blocks although Starlink does not have to build the typical infrastructure needed when ISPs expand into new geographies. Starlink relies on its own LEO satellites, user terminals that each customer purchases, and ground stations Deployed in every country in which it operates. (SpaceX said laser links on Starlink satellites reduce the need for those ground stations.)

Rosenworcel has raised concerns about Starlink technology and Price 600 dollars Each customer must pay for the hardware costs in advance. “Starlink technology has real promise,” Rosenworcel said. “But the question before us is whether its still-developing consumer broadband technology — which requires users to buy a $600 dish — should be publicly supported with nearly $900 million in universal service money through 2032.”

Starlink calls ‘nascent’ technology with ‘capacity limitations’

In a public notice that provided further details, the FCC called Starlink “nascent LEO satellite technology” with “recognized capacity limitations.” The FCC has questioned Starlink’s ability to provide a consistently low latency service with required download speeds of 100 Mbps and upload speeds of 20 Mbps. The FCC also cited Ookla speed test data showing Starlink speeds declining in the second quarter of 2022, “including download speeds well below 20Mbps.”

The FCC Wireline Competition Bureau said it received “inadequate responses” to follow-up questions from both Starlink and LTD. As a result of this ruling, the FCC said, both ISPs are “in default of all winning bids that have not already been declared as in default.”

LTD was to receive more money from Starlink – more than $1.3 billion. The FCC’s rejection of LTD was less surprising, as the company failed to meet application deadlines. LTD’s recent failures have been detailed Wall Street Journal article.

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“Although LTD was a relatively small fixed wireless provider prior to the auction, it was the largest winning bid in the auction, with winning bids submitted in 15 states,” the FCC said. “Thereafter, it failed to receive qualified carrier status in a timely manner in seven states, rendering it ineligible in those states for support. Ultimately, the FCC review concluded that LTD is not reasonably capable of deploying a network of scale, scope and scale required by the large-scale winning bids for LTD.”

The FCC started the “cleaning” auction over a year ago

Rosenworcel made it clear over a year ago that she believes the auction was mismanaged, Announced in July 2021 That the agency should “clean up issues with the design of the program that have arisen since its adoption in 2020”. The FCC cited “complaints that the program is preparing to fund broadband for parking and well-served urban areas.”

At the time, Rosenworcel’s FCC asked Starlink to voluntarily give up its funding in about 6% of the total 113,900 census blocks where it initially won FCC grants. Now SpaceX does not get anything out of auction. We contacted SpaceX and LTD Broadband today and will update this article if we get any response.

The auction originally awarded $9.2 billion to 180 broadband providers. Rosenworcel has distributed the funds on a rolling basis as providers obtain final approvals. “To date, the RDOF program has allowed more than $5 billion in funding to provide primarily gigabit fiber broadband service to more than 3,000,000 locations in 47 states,” the Federal Communications Commission said today. “With the support of this program, hundreds of carriers have already begun deploying these future-proof networks to connect unserved areas.”

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