As promised, FCC Commissioner Brendan Carr offered more detail today about why he is unhappy about the commission’s decision to reject SpaceX’s Rural Digital Opportunity Fund (RDOF) winning bid. SpaceX tentatively won $885 million to cover some of the costs to provide its Starlink low earth orbit satellite broadband service in unserved rural areas.
According to Carr, the commission’s reasons for rejecting SpaceX “do not withstand even casual scrutiny.”
Carr learned of the rejection when it was announced in an FCC press release last week. At that time, he released a brief statement noting his displeasure and stating that he would have more to say on the issue.
The RDOF auction tentatively awarded funding to cover some of the costs of bringing broadband to unserved rural areas using a reverse auction, with funding for an area going to the company that committed to delivering service for the lowest level of support.
FCC Starlink RDOF Rejection
Carr outlines four reasons for his displeasure with the FCC decision.
First, he disputed the commission’s claim that its decision would help avoid extensive delays in getting broadband to the areas that SpaceX proposed to serve. Instead, he said, “that is exactly the outcome that this decision ensures” because the FCC chose to “vaporize” SpaceX’s commitment “and replace it with . . . nothing.”
Second, Carr challenged the commission’s assertion that Starlink technology was “risky” and “still developing.” He noted, for example, that the U.S. Air Force has a nearly $2 million deal with SpaceX to deliver Starlink service to military bases. He stopped short of saying that Starlink currently delivers the broadband speeds to which SpaceX committed, however – perhaps recognizing that speed tests show the service underperforming. Instead, he said Starlink speeds have been improving and the company would have had three years to get performance to where it would have needed to be.
Third, Carr argued that there is no legal basis for the commission to reject SpaceX based on the cost of Starlink, which according to last week’s FCC press release about the Starlink rejection, requires the purchase of a $600 dish.
Fourth, he said the FCC decision would cost extra money for taxpayers because it would cost at least $3 billion to bring fiber broadband to the areas that SpaceX planned to serve for less than $1 billion.
What Carr’s arguments don’t take into consideration is the impact of recent NTIA action involving rural broadband funding. NTIA is administering the $42.5 billion Broadband Equity Access and Deployment (BEAD) program and in establishing rules for that program, NTIA said that areas lacking “reliable” broadband service would be eligible for BEAD funding – and the agency specifically said that satellite broadband was not reliable.
The upshot is that if SpaceX received the RDOF funding, the areas for which it won the funding would have been eligible for BEAD funding just a short time later. In other words, the areas could have ended up being funded twice — a scenario that contradicts Carr’s assertion that rejecting SpaceX would cost taxpayers more money.
It’s also worth noting that LEO satellites have a limited lifespan – only about five years, according to some estimates. If the FCC had approved the SpaceX application, the investment would have only been good for about five years before additional investment would have been needed, regardless of NTIA’s policy.
In his statement, Carr didn’t ask the FCC to take any specific action to reverse or mitigate its Starlink RDOF rejection. Instead, he advised the commission to “correct course, adopt a technology neutral approach, and in doing so ensure that we prioritize the needs of Americans that remain unserved today.”
The advice about a “technology neutral” approach is problematic, though, again because of NTIA’s directive on the BEAD program. As it stands, it doesn’t make sense for the commission to fund technologies such as satellite broadband that NTIA doesn’t consider to be “reliable.”