Musk’s $886m web service subsidy in danger as critics cry foul | Web Information

The US Federal Communications Commission is under pressure from rural Internet service providers to deny Elon Musk’s SpaceX a proposed $ 886 million subsidy for broadcasting broadband to underserved areas from space.

Even before SpaceX won a competition for funds, SpaceX had set up its service and started launching satellites. More than 1,000 of the Starlink vehicles are now in the air offering service for trial subscribers. The company says its system is “uniquely positioned to provide high quality broadband service to the hardest-to-reach rural Americans.”

That hasn’t stopped complaining, however, that a competition for subsidies was won from the FCC Rural Digital Opportunity Fund, partly because the service was built without the help and is not limited to rural areas. The planned awards for Space Exploration Technologies Corp., as it is officially known, and for other companies, leave lawmakers asking questions about the entire $ 9.2 billion program.

SpaceX is “still in beta testing – not a proven technology,” said Jim Matheson, chairman of the National Rural Electric Cooperative Association, whose members vied for funding.

The federal program is designed to advance network building and is “not a research and development experiment on technologies that may not be able to connect millions of rural Americans to true broadband,” Matheson said at a press conference Thursday

“We’re really asking the Federal Communications Commission to do its job,” Matheson said. “We want you to actively, aggressively, and thoughtfully consider grant applications from SpaceX and others.” Considerations should include technological skills, he said.

Elon Musk [Brendan Smialowski/AFP]SpaceX put 60 more satellites into orbit on Thursday, according to the company’s Twitter feed. Another batch is scheduled to start on Friday from a plant in Florida. Regardless, the company defended its service in a file.

“Starlink’s performance is neither theoretical nor experimental,” the company said in the file published on the FCC website on Thursday. “Over 10,000 users in the US and abroad are using the service today.”

SpaceX has not previously responded to emails requesting comment.

The Rural Digital Opportunity Fund is at the heart of the federal effort to connect millions of people without home broadband, many in sparsely populated areas that are expensive to service – a need underscored by the Covid-19 pandemic. The fund is ready to distribute public money for broadband expansion in 49 countries over a period of 10 years.

In December, winning auctions were announced for 180 companies and bidding groups, most of which offer broadband over more established technologies such as cable or cellular services.

SpaceX has been approved for its plan to service 642,925 locations in 35 states. However, consumer representatives say these locations include parts of New York City and airports in Newark and Miami – locations that do not fit the program’s goal of providing services to rural populations beyond the reach of broadband networks.

The decisions were made when the Trump administration officials were still in control of the FCC and the agency is now run by Biden officials who could cut off candidates it believes were dubious. Last month, 160 members of the House and Senate urged the FCC to examine the recipients, also because it takes time to build a network. “We fear that we will not know whether the funds have not been properly spent in the coming years,” said the legislature.

There is a need for a proper pre-assessment, South Carolina Representative Jim Clyburn, the No. 3 House Democrat, said in an email. He said many applicants claim they can service new customers faster than current subscribers do.

Some of the bidders have promised ultra-fast gigabit speeds that they haven’t offered before. Others missed earlier deadlines for setting up subsidized networks or promised low-cost network construction.

The review falls to the FCC’s incumbent chair Jessica Rosenworcel, who said last year the program moved too quickly when Republican chairman Ajit Pai led the elections “fast at the door”.

Defending the timeline, Pai said during the chairmanship that unserved Americans “cannot afford to wait for duty”.

The FCC declined to comment.

Starting in October, the FCC held an auction to determine how to split the pot of rural money funded by phone bill charges from consumers. The agency named discreet areas without service and requested offers. The companies that offered broadband construction at the lowest price emerged as winners of subsidies.

Winners announced in December included three more than $ 1 billion in pledged subsidies: cable company Charter Communications Inc., the 95-cooperative Rural Electric Cooperative Consortium, and a company called LTD Broadband, which has a 1.3 The largest grant winner was for the service in 15 states.

Charter said Monday that it would use its $ 1.2 billion subsidy in a $ 5 billion project to provide fast Internet service to more than 1 million underserved homes and businesses in 24 states.

LTD Broadband was founded in 2011 and, according to its website, offers broadband wirelessly distributed from 2,100 tower locations in Iowa, Minnesota, Nebraska and South Dakota. The company will deliver on its commitments with fiber optic connections, which generally offer faster speeds than wireless connections.

“We’ve seen a lot of say no from competitors,” said Corey Hauer, president of LTD Broadband, in an email. “We take our commitment very seriously and we will not disappoint the rural dwellers who have been waiting for broadband services.”

SpaceX selected locations include two splinters on the Harlem River in the Bronx. Other spots selected by SpaceX are the terminals at Newark Liberty International Airport and Miami International Airport. This is the result of research by the Policy Group Free Press.

“The FCC should never have allowed SpaceX to participate,” said S. Derek Turner, Research Director of Free Press, in an interview. “They will serve those customers who request service with or without an FCC grant.”

Free Press calculated that Starlink’s $ 111 million grant came from urban operations. More than $ 700 million of the total of $ 9.2 billion in subsidies was given for the use of broadband in non-rural areas, the political group said.

The FCC announced when it announced the results that the funding would provide broadband to more than 10 million rural Americans.

It could be difficult to enforce network building commitments, said Blair Levin, an analyst at New Street Research.

“While there are indications of political success,” the FCC “may need to address a variety of issues,” Levin said in a note.

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