Doug Dawson from CCG Consulting reports…

SpaceX has now told the FCC multiple times that the agency should begin the process of phasing down and eliminating all rural high-cost subsidies from the Universal Service Fund. The company filed comments asking for the end of subsidies in FCC Docket 26-96, which is looking at reforming the High-cost fund for an all IP Future, and in Docket 10-90 that was looking at Universal Service Fund reform. In both filings, SpaceX says that its proliferation of low-orbit satellites means that rural subsidies are obsolete and are no longer needed. The company characterizes anybody who disagrees with it as a “subsidy-dependent incumbent”. SpaceX goes on to argue that the money currently spent on rural subsidies should be redirected to programs that lower the cost of broadband for low-income families.

Doug looks at many aspects of the issue, I’ll just add one…

I think the SpaceX request raises multiple policy questions. First, is satellite really providing broadband? Earlier this decade the FCC declared that Starlink was not providing broadband when the agency canceled the $885 million award Starlink had won in the RDOF reverse auction. At the beginning of this year, Ookla said that only 45% of Starlink customers were meeting the FCC’s definition of broadband at 100/20 Mbps. But Starlink’s speeds have been slowly improving, and will be boosted over the next five years as the company replaces the current V2 satellites with the new V3 satellites that provide 10 times more download capacity and 22 times more upload capacity.