US rejects $900 million in subsidy for Musk’s cheaper internet service

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The Federal Communications Commission (FCC) in the US has announced not to award Elon Musk’s Starlink nearly $900 million subsidy for expanding broadband service in rural areas, based on its failure to meet the basic programme requirements. The ‘Universal Service Fund’ programme, which uses funding collected from consumers, sought to expand access to broadband networks in rural areas.

“The FCC followed a careful legal, technical and policy review to determine that this applicant (Starlink) had failed to meet its burden to be entitled to nearly $900 million in universal service funds for almost a decade,” said FCC Chairwoman Jessica Rosenworcel. The agency qualified Starlink at the short-form stage, but at the long-form stage, the Commission determined that Starlink failed to demonstrate that it could deliver the promised service. “Funding these vast proposed networks would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the US,” the Commission noted.

The programme authorised more than $6 billion in funding to bring primarily fibre gigabit broadband service to over 3,458,000 locations in 49 states and the Northern Mariana Islands. With support from this programme, hundreds of carriers deployed these future-proof networks to connect unserved areas. In Starlink’s case, it was determined last summer that it was a “still developing technology” that required the user to purchase a dish, priced at $600.

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