Elon Musk’s SpaceX Riles Its Rivals for Broadband Subsidies

Elona Muska

SpaceX is facing its latest challenge – and some resistance – in its quest to secure nearly $1 billion in government funding for its satellite broadband service.

In recent weeks, SpaceX has received interim reimbursements from the Trump administration for $886 million in federal support to deliver broadband services to rural areas through its low-orbit Starlink satellite system.

The federal government is currently planning a final round of testing before betting that Musk’s technology can help fill in the remaining gaps in US broadband internet. Most of the $9.2 billion in grants from the Federal Communications Commission went to more established technologies, including companies that lay fiber optic cables.

The FCC is asking SpaceX and other companies in waiting to prove their financial and technical capabilities to build the network, and Friday was the deadline for filing those plans.

SpaceX’s competitors for the subsidies are asking the FCC and its new leadership under the Biden administration to take a closer look at these plans, and they are in the process of garnering support for their cause on Capitol Hill

More than 150 members of Congress wrote on the 19th. Janvier sent a letter to the FCC urging it to closely scrutinize the selected bidders to ensure they are capable and to consider public participation in the filings.

Elon Musk spoke at a satellite technology conference in Washington, D.C., early last year.


Susan Walsh/Presse Associée

The letter, which did not mention SpaceX or any other company, was then promoted online by two commercial groups competing for government subsidies: National Association of Rural Electric Co-operatives and Rural Broadband Association.

We are funding the experiment, he said.

Jim Matheson,

Executive Director of the National Association of Rural Electric Co-operatives, which also represents electricity providers applying for broadband subsidies for fiber. We don’t know if it will work or not, he said in an interview, referring to the SpaceX system.

Representatives of SpaceX, whose official name is Space Exploration Technologies Corp. – did not respond to requests for comment.

Proponents of SpaceX’s plan argue that broadband via satellite could allow remote homes and businesses to be reached at a much lower cost.

In the meantime, government grants could help support Mr. Musk’s plans to offer satellite broadband Internet worldwide, a key to financial success.

An FCC spokesman declined to say when the agency plans to make a decision on the SpaceX plan, referring to the agency’s published procedures. They do not set deadlines for the approval of applications and stipulate that applications with detailed plans will not normally be published until they have been approved.

SpaceX is not the only company whose system uses satellites, nor is it the only winner of the controversial bid. Mr. Matheson pointed to the significant amount of funding obtained by ISPs using so-called fixed-wireless technology, which appears to be beating fiber-based ISPs, even though fiber technology is generally considered faster.

SpaceX plans to use the money to bring broadband to more than 640,000 locations in 35 states that do not yet have broadband access, according to the FCC. Many of them are households and businesses in rural areas where the cost of building a broadband network has so far exceeded the potential revenues of broadband companies.

With many schools across the country starting the year virtually, people in rural communities like West Virginia are wondering why they don’t have a reliable online service. For many Americans, the recent bankruptcy of Frontier Communications has exposed the shortcomings of American broadband policy. Photographic illustration: Carlos Waters/Video: Jake Nichol/WSW.

In its report, approved on Dec. 22, SpaceX filed an application with the FCC in January of this year, and is leading the first deployments in states such as Washington, D.C.

SpaceX is continuing its rapid development of a next-generation satellite system and is already providing high-capacity, low-latency broadband services to Americans across the country, the company said.

Last year, in one of his archives, he described using his technology to serve hard-to-reach Americans in rural areas for whom access has long been unreliable, unaffordable or downright unaffordable.

FCC Commissioner

Jessica Rosenworcel,

The Democrat, who is president while the new administration votes on his candidacy, declined to comment. She criticized the FCC for boosting subsidies last year and said the agency should wait until it has better data on where broadband is needed.

FCC Commissioner

Brendan Carr,

a Republican who helped draft the rules for the grant program, said the program allows suppliers of different technologies to compete with each other, reducing the cost of the grants to the government. He stated that there will be a number of different technologies that are best suited to fill service gaps in different places.

SpaceX’s decision to secure broadband funding is part of a broader strategy in Washington that also includes government contracts for transporting astronauts, launching national security satellites, weather forecasting and rocket tracking.

In the auction the FCC held last year, the bidder who offered the fastest Internet service at the lowest price in a given geographic area was given access to federal subsidies that came from so-called universal consumer phone service rates.

Giving them extra money to do what they have already committed to does not seem to me to be in the public interest.

– Skyler Ditchfield, CEO of Geolinks, quoting SpaceX.

Although SpaceX’s technology is slower than some competing technologies such as. B. fiber optic cabling, the Company’s offerings have been successful in areas where faster providers have not been interested, such as major Northwest highways.

California-based Hawthorne ranks fourth among competing groups in the auction, receiving nearly 10 percent of the $9.2 billion to be distributed.

SpaceX last year began offering trial versions of its Internet service for $99 a month, with an initial cost of $499 for hardware, according to a promotional letter from the company in October. It is unclear how the new federal subsidies may affect these prices.

Washington state agencies, including the School District and the emergency management agency, are already using the service, according to a SpaceX repository on 22. January. The company claims to have launched 955 satellites and plans to launch thousands more.

The operation didn’t go smoothly. SpaceX had originally planned to launch the internet service as early as 2018, but faced delays and high costs, the Wall Street Journal reported. Some satellites are down. SpaceX has also filed an application with the FCC to change its license because it links its operations to the system, in an effort to address concerns that satellites could collide with other objects, creating space debris.

Skyler Ditchfield,

The CEO of GeoLinks, a fixed wireless Internet provider in California that also participated in the FCC auction, noted that SpaceX had promised to build the network before it received the subsidies.

Giving them extra money to do what they have already committed to does not seem to me to be in the public interest, he said in an interview.


Do you think SpaceX can deliver broadband to rural America, as Elon Musk claims? Join the discussion below.

Nearly 13% of SpaceX’s money, or about $111 million, is earmarked for census block groups that include urban areas. This is according to an analysis of public data by the advocacy group Free Press, which has been critical of the FCC’s auction process.

Many are located close to areas served by existing providers, such as B., the cable companies, will serve, the group said. This seems inconsistent with the FCC’s goal of providing funds to underserved rural areas, although the Free Press stated that it found no evidence of a violation of the rules. The FCC has not commented.

Mr. Carr, the Republican commissioner of the FCC, said the government is getting value for money.

We now have a legally binding obligation that they serve everyone in these areas, he said. We need to hold accountable any company that wins and we need to take very strong measures to enforce the law against any company, any technology that fails.

Email Ryan Tracy at [email protected]

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frequently asked questions

Does Elon Musk offer free internet access?

Elon Musk recently talked about how people will have access to StarLink. It will be incredibly easy and give you access to the relatively free global internet from anywhere in the world.

How much does SpaceX receive from the government?

The report cites SpaceX as an excellent example of how early public investment has contributed to the company’s success. SpaceX received $1 billion in its first 10 years, and about half of that money came from government contracts with NASA, according to the Space Angels report.

WillSpaceX get federal support?

SpaceX is privately funded. … SpaceX has signed a contract with the US government to partially fund the development of its Falcon 9 launcher, which uses a modified version of the Merlin rocket engine.

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