ViaSat sent a letter to the FCC last week urging the commission not to approve any Rural Digital Opportunity Fund (RDOF) funding for ViaSat’s satellite broadband competitor SpaceX.
SpaceX is in the process of deploying thousands of low earth orbit (LEO) satellites to provide broadband service with lower latency in comparison with the geostationary satellite broadband service that ViaSat offers. SpaceX was one of the biggest winners in the RDOF auction and was tentatively awarded $885 million to cover some of the costs of providing broadband to unserved rural areas.
Citing a previous ViaSat FCC filing, the new ViaSat letter argues that SpaceX does not have sufficient capacity to meet its RDOF requirements, even if its total capacity is used for RDOF.
The new letter also references a tweet from SpaceX CEO Elon Musk stating that “Starlink is designed for low to medium population density, which means we can hit max users in some areas fast” and urging interested parties to “sign up early to ensure a spot.”
It’s worth noting that areas eligible for RDOF funding generally are rural areas with low population density. ViaSat does raise an interesting point, however.
“RDOF support is intended to ensure that all consumers in a supported area have meaningful opportunities to access broadband service,” the letter argues, adding that “the commission should not award any amount of RDOF support . . . to fund a network that the operator itself admits will be incapable of meeting consumer demand.”
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Winning RDOF bidders were those who committed to providing service in an area for the lowest level of support. A weighting system favored bids to provide faster, lower-latency service. Unlike ViaSat, SpaceX was allowed to bid in the lower-latency tier, which likely enabled SpaceX to outbid ViaSat.
ViaSat was a big winner in the previous Connect America Fund (CAF) II auction that served as a prototype for the RDOF auction, but the company won little or nothing in the RDOF auction. That may have occurred, in part, because SpaceX likely did not bid in the CAF II auction and also because the parameters of the weighting system changed for the RDOF auction in a manner that was detrimental to ViaSat.
ViaSat isn’t the only entity questioning SpaceX’s RDOF win, however. A report commissioned by NTCA—The Rural Broadband Association and Fiber Broadband Association (FBA) also questions whether SpaceX has enough capacity to meet its RDOF service requirements. FBA also questions whether the RDOF program should be funding technology with a lifespan of only five years.
It’s been almost a year since the RDOF auction concluded and ViaSat is one of many winning bidders, including most of the other top 10, that have not had funding released to them. The commission has been closely scrutinizing the long-form applications that winning bidders were required to submit when the auction concluded before releasing funding, and the industry is eagerly awaiting news on that front.
I guess that is why SpaceX has stopped selling their service to the public. I agree, they do not have enough satellites to receive these funds. Then lets talk about the reliability of the service, which has serious issues. Fo that kind of money for so few clients, I find this as another government give-away to another company that does not deserve the funding.