SpaceX wins $885 Mn federal subsidies to expand its Starlink project

SpaceX wins $885 Mn federal subsidies to expand its Starlink project

SpaceX has recently won over $885 million in federal subsidies allocated by the Federal Communications Commission for its Starlink satellite-internet project. It has been reported that the money comes from the Rural Digital Opportunity Fund which is a $20.4 billion initiative for delivering high-speed internet across America.

The FCC program which is funded by small fees tagged with cell phone bills, has been designed to attract internet service providers to make broadband services accessible to those parts of the US that lack appropriate or no web services.

Recently, the FCC posted its list of 180 winners, which included SpaceX. Apparently, these consortiums and companies will gain access to $9.23 billion supporting 5.2 million businesses and homes across 49 states and a US territory, accounting for average subsidies of $1,768 per internet connection.

Further, in a public notice, the FCC stated that 99.7% of winning locations are likely to bring minimum 100 Megabits per second download speeds, sufficient for streaming uninterrupted video conferencing and high-quality movies. With this, nearly 85% of the locations are anticipated to receive minimum 10 times faster service.

As per credible sources, the FCC has bifurcated the project in two reverse auctions, namely Phase I, which is valued at up to $16 billion, as well as Phase II, which was valued at up to $4.4 billion. Apparently, the bidding for coverage areas in Phase I were conducted from October 29 through November 25, where the bids for higher-speed and lower-latency service were of higher value as compared to the service with lower-speed, higher-latency.

Speaking of the Starlink project, SpaceX intends to deploy around 42,000 Starlink satellites into the orbit as a part of its goal of providing high-speed internet to any location on Earth and generate an annual revenue of $30 billion to $50 billion. Further, Musk views Starlink as an economic flywheel for funding SpaceX missions related to moon and Mars, a planet where he desires to establish a permanent settlement for humans.

SpaceX has apparently won bids for locations spread across 35 states with the largest wins by total amount being for Washington state, where it won $80.38 million covering more than 52,000 locations. However, SpaceX won't have immediate access to all the money it won as every winning bidder has to clear several steps with the FCC, such as submission of a long-form application due by June 7. Besides, the bidder must also meet timing deadlines and performance parameters.

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.