SpaceX seemingly doesn’t like to be told “no.”
The Elon Musk-owned Starlink operator hit back at the Federal Communications Commission’s refusal to reinstate a $886 million broadband grant tentatively awarded to satellite internet service in 2020.
“SpaceX is deeply disappointed and perplexed by the Commission’s decision to exclude SpaceX’s Starlink satellite broadband service from the Rural Digital Opportunity Fund,” the company said in a filing earlier this week.
SpaceX said the rejection “directly undermines” the Rural Digital Opportunity Fund’s goal to expand broadband network access in rural areas. The FCC-created program launched in 2020 and has committed to providing up to $20.4 billion over 10 years to unserved and underserved homes and businesses furthering the goal of closing the digital divide.
The company went on to argue that Starlink is the best option to accomplish the program’s mission.
The FCC rejected SpaceX’s application for the funds on the grounds that the company didn’t meet the program’s requirements, which include a consistent minimum speed of 25 Mbps down and 3Mbps up, as well as reach certain deployment milestones over six years.
“The FCC followed a careful legal, technical and policy review to determine that this applicant had failed to meet its burden to be entitled to nearly $900 million in universal service funds for almost a decade,” FCC Chairwoman Jessica Rosenworcel said in a statement.
The decision comes as SpaceX strives to build out its service’s offerings and reach more users. Musk’s internet endeavor has hit multiple snags and obstacles since it launched. Starlink has fallen short of its original predictions for revenue and operating profit as well as anticipated users, but the business is expected to see significant growth next year.
The company has already shown signs of turning the business around. Starlink achieved breakeven cash flow in November and gained about a million customers between January and September of this year.
In addition, the service’s internet speeds are tracking upwards after a slight decline in the third quarter of 2023 and little speed fluctuation over the year as a whole, according to data from Ookla.
The progress doesn’t seem to have been enough to secure the grant money.
The Commission said the Rural Digital Opportunity Fund program assesses applicants first on a high-level application. If the applicant receives a winning bid, they must follow up with a more in-depth application that verifies the applicant meets all the program’s requirements.
This is where Starlink ran into problems.
“The agency qualified Starlink at the short form stage, but at the long form stage, the Commission determined that Starlink failed to demonstrate that it could deliver the promised service,” the FCC said.
The company’s long-form application was rejected in 2022. Starlink sought to appeal the decision, but the FCC denied the request.
In the filing, SpaceX criticizes the FCC penalizing Starlink for not meeting the program’s speed requirements “years before SpaceX had any obligation to do so” as well as relying on Ookla’s speed test data “without any notice.”
It’s unclear whether SpaceX intends to appeal the FCC’s decision in court. The company offered no further comment beyond its filing.
Despite the financial setback, SpaceX intends to press on.
“SpaceX will not let the Bureau’s and Commission’s erroneous decisions diminish its commitment to bringing high-speed, low-latency broadband service to Americans no matter where they live, work, or go to school,” the company said in the filing.
The news was reported earlier by Ars Technica.