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SpaceX wins nearly $900 million in federal aid to boost internet access

The FCC is aiming to serve rural areas with Starlink internet service

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Photo (c) Andrei Stanescu - Getty Images
The Federal Communications Commission plans to give SpaceX, Elon Musk’s space company, nearly $900 million dollars in federal aid to boost high-speed internet service in rural areas of the country. 

The government wants SpaceX to provide high-speed broadband internet to over $5.2 million unserved homes and businesses in rural America with its Starlink internet service.

The government aid was awarded as part of the first phase of its Rural Digital Opportunity Fund auction. SpaceX was one of the biggest winners of the auction. The company competed against more traditional broadband companies, including Charter Communications and CenturyLink.

SpaceX's Starlink service, which is currently in beta testing, utilizes a swarm of roughly 1,000 satellites in low orbit around earth. They travel around the planet at more than 17,000 miles per hour, beaming broadband to antennas on consumers’ homes. 

With the subsidies it will receive over the next decade, SpaceX is expected to cover 35 underserved locations. The company will be required to stick to the terms of certain conditions in order to secure the funding. Specifically, it will have to prove that it can provide broadband services to unserved rural areas for costs in line with terrestrial broadband offerings and adhere to “periodic buildout requirements” in the 35 locations.

Closing the digital divide

In a statement, FCC Chairman Ajit Pai said the allocation of the funds will help advance the agency’s mission of closing the digital divide.

“I’m thrilled with the incredible success of this auction, which brings welcome news to millions of unconnected rural Americans who for too long have been on the wrong side of the digital divide. They now stand to gain access to high-speed, high-quality broadband service,” he said. 

“We structured this innovative and groundbreaking auction to be technologically neutral and to prioritize bids for high-speed, low-latency offerings. We aimed for maximum leverage of taxpayer dollars and for networks that would meet consumers’ increasing broadband needs, and the results show that our strategy worked. This auction was the single largest step ever taken to bridge the digital divide and is another key success for the Commission in its ongoing commitment to universal service. I thank our staff for working so hard and so long to get this auction done on time, particularly during the pandemic.”

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