Los Angeles (USA) – The U.S. Federal Communications Commission (FCC) announced Tuesday that it will not award Starlink an $886 million grant to expand broadband service in rural areas because Elon Musk’s company did not demonstrate it was capable of providing the service.
“The FCC has conducted a thorough legal, technical and policy review to determine that this applicant has not met its obligation,” said FCC Chairwoman Jessica Rosenworcel, who added that awarding it the grant would not be “the best use” of the Universal Service Fund from which the funding comes.
In addition, the FCC cited among its reasons SpaceX’s failure to launch its Starship rocket, which the commission said could affect its ability to “meet” its obligations.
This was the same reason why the company’s funding – founded as a spin-off project from SpaceX – was terminated last year, and the decision was appealed by the aerospace company itself.
SpaceX had previously won the bid to deploy internet with a speed of 100 megabits per second download and 20 megabits per second upload in more than 640,000 locations located in 35 different states.
“This applicant had not lived up to its commitment to be eligible for nearly $900 million in funding for nearly a decade,” Rosenworcel detailed.
SpaceX said it was “deeply disappointed and perplexed” by the FCC’s decision, and its legal counsel, Christopher Cardaci, sent a letter arguing that “Starlink is arguably the only viable option to immediately connect many Americans” living in remote areas of the country, and whom Biden promised to connect when he took office in 2021.
“It doesn’t make sense – Starlink is the only company that actually solves rural broadband at scale!” posted Musk regarding the decision.
The two Republican commissioners of the five-member FCC disagreed with the commission’s verdict and pointed out that the ruling could be due to disagreements between the current U.S. administration and the tech mogul.