The F.C.C. Starlink’s $885 million application finally rejected Despite spending public money to expand orbital communications infrastructure that covers parts of rural America, the company said it “has not been able to demonstrate that it can deliver the services it promised.”

As previously reported, the funds in question were part of the Provincial Digital Opportunity Fund. It’s a multibillion-dollar program that subsidizes the deployment of Internet service in areas where private companies have previously found it too expensive or remote. The $885 million was first set aside for Starlink in 2020, in response to the company’s bid to provide how much connectivity to which regions and at what cost.

The FCC explained that this initial application is high-level and short-term, and those who qualify will be subject to close scrutiny. For example, one organization that was allocated more than $1 billion in funding turned out to be a regional effort that was unable to scale as hoped.

In Starlink’s case, last summer’s proposal for satellite internet showed promise, but it turned out to be a “developing technology” that would require users to purchase a $600 dish. Most people wouldn’t pay that much for a year’s internet bill. Therefore, given the target audience of under-resourced people, this should be seriously considered. (In fact, the FCC considered not allowing orbital carriers to apply, but decided to let them compete on their own merits.)

This was in addition to “numerous financial and technical deficiencies” that authorities identified in the proposal and the company’s operations. This is not to say that this is a poorly run company that provides excellent service to some, but for the purpose of this auction and winning bid, there were serious questions:

After reviewing all information submitted by Starlink, the Bureau ultimately determined that Starlink would have a network of the scope, size, and scale necessary to serve 642,925 model locations in 35 states. We concluded that the company had not demonstrated a reasonable ability to meet RDOF’s requirements to deploy. That was the winning bidder.

Starlink called for a review of the decision, arguing among other things that the decision was made on the basis of “inappropriately burdensome criteria,” as is their right in this situation. (Apparently, the relevant parts have been edited in the latest version) order) claimed that although short-term tests showed a drop in speed and other metrics, the company has plans to launch more satellites and will be able to expand its network as claimed. It also relied on the promise of SpaceX’s super-heavy rocket Starship as proof of its claims.

However, the FCC notes that:

At the time of the station’s decision, Starship had not yet been launched.Certainly even today [i.e. over a year later], Starship has not yet been successfully launched. All attempted launches failed. Based on Starlink’s previous claims regarding plans to launch second-generation satellites via Starship and the information available at the time, [Wireline Competition] In making prospective judgments regarding Starlink’s ability to meet its RDOF obligations, the Secretariat necessarily considered the inability to continue to successfully launch Starship rockets.

A footnote notes that it was only after the denial was issued that SpaceX announced it would not use Starship after all for the second generation of Starlink satellites.

Fundamentally, they recognized the benefits of this approach, but were not 100% convinced that this was the best use of the lion’s share of $1 billion. Probably in the next fund.

Two Republican FCC commissioners, Brendan Carr and Nathan Symington, opposed the decision. Simington is probably correct in pointing out that “many RDOF recipients never deployed service at any speed or in any location,” while Starlink had service to 500,000 subscribers at the time of its rejection. many of which were in areas not served by other broadband options. He dismissed the launch issue as a ploy of the agency’s “motivated reasoning.”

Carr calls this politics. “After Elon Musk took over Twitter and used it to express his political and ideological views without filter, President Biden gave federal agencies the green light to pursue him… Elon Musk I became a ‘progressive enemy.’” No. 1. Today’s decision certainly fits the Biden administration’s pattern of regulatory harassment. ”

Of course, Starlink’s denial was made long before its acquisition and subsequent downfall of Elon Musk (what was he doing?), and the FCC is here today to reaffirm its case. It is not a new announcement. That’s quite a factual error.

Both prove that their faith in Starlink may or may not be misplaced. But given that $885 million is at stake, the FCC’s decision to err on the side of caution makes sense if it does so at all. Funds will be donated to other applicants and programs.

Although this money did not actually go to Starlink, the loss of income (or whatever such awards are classified as monetary) is not easy to endure. However, the company probably knows that the appeal of this decision will be difficult and has not counted on this funding for quite some time.

Although the company is not profitable, it recently reached what CEO Elon Musk calls “breakeven cash flow.” True, its revenues have soared (from about $222 million to $1.4 billion), but the significant operational costs of building and launching the satellites needed to serve thousands of new customers It took. The company, which has missed predictions for several years that it would be in the billions of dollars by now, has at least convincingly demonstrated its capabilities both at home and in war.

Maybe they don’t need that $885 million after all. The Pentagon’s money is just as green.