The Federal Communications Commission on Wednesday denied SpaceX’s bid for nearly $1 billion worth in subsidies to support rural broadband customers through the company’s Starlink satellite internet network.
The FCC subsidies are designed to be an incentive for broadband providers to bring service to the “unserved” and hard-to-reach areas of the United States. In a press release, the FCC said both Starlink and LTD Broadband – another company that initially was awarded $1.3 billion in subsidies under the program – “failed to demonstrate that the providers could deliver the promised service.”
“We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks. We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements,” FCC chairwoman Jessica Rosenworcel said in a statement.
Rosenworcel added that SpaceX’s technology has “real promise” but emphasized that Starlink is still a “developing technology.”
SpaceX did not immediately respond to CNBC’s request for comment.
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