Elon Musk’s Starlink Is Starting To Lose Subsidies
The U.S. Federal Communications Commission (FCC) has upheld its 2022 decision to reject SpaceX’s satellite internet unit, Starlink, from receiving $885.5 million in rural broadband subsidies. The decision, reaffirmed on Tuesday, was grounded in Starlink’s alleged failure to meet essential program requirements and an inability to demonstrate the capacity to deliver the promised service, following a challenge by SpaceX.
FCC Chair Jessica Rosenworcel defended the decision, stating, “The FCC followed a careful legal, technical, and policy review to determine that this applicant had failed to meet its burden.” The FCC cited various reasons, including SpaceX’s failure to successfully launch its Starship rocket, emphasizing that the uncertain nature of Starship’s future launches could hinder Starlink’s ability to fulfill its obligations.
The initial decision to rescind funding in August 2022 was based on speed test data, after Starlink committed to providing high-speed internet to 642,000 rural homes and businesses across 35 states.
SpaceX expressed deep disappointment and perplexity regarding the FCC’s stance. The company asserted that Starlink remains one of the best, if not the best, options to achieve the goals of the rural internet program.
Two Republican commissioners within the five-member FCC dissented from the decision. They argued that the FCC was prematurely holding SpaceX to 2025 targets and hinted at the Biden administration’s purported dissatisfaction with Elon Musk as a potential factor.
Commissioner Brendan Carr accused the FCC of joining “the growing list of administrative agencies that are taking action against Elon Musk’s businesses” and labeled the decision as part of the Biden administration’s alleged pattern of regulatory harassment.
Carr added, “Last year, after Elon Musk acquired Twitter, President [Joe] Biden gave federal agencies the green light to go after him,” pointing out that various agencies, including the DOJ, FAA, FTC, NLRB, SDNY, and FWS, have taken action against Musk’s enterprises.
Elon Musk responded to the FCC decision on X, stating, “It doesn’t make sense. Starlink is the only company actually solving rural broadband at scale! They should arguably dissolve the program and return funds to taxpayers, but definitely not send it (to) those who aren’t getting the job done.”
Republican FCC Commissioner Nathan Simington, acknowledging Starlink’s approximately two million subscribers as of September 2023, emphasized SpaceX’s ongoing efforts to deploy more satellites into orbit regularly, anticipating faster and more reliable service in the future.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
