SpaceX wins big share of $9.2B RDOF broadband subsidy

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WASHINGTON — SpaceX won $885.5 million of the $9.2 billion in broadband subsidies the FCC awarded providers Dec. 7 under its Rural Digital Opportunity Fund (RDOF) Phase 1 auction.

SpaceX’s share of the funding is one of the largest among the 180 winning bidders and dwarfs the nearly $1.3 million share going to Hughes Network Systems, the only other satellite provider to win RDOF Phase 1 dollars.

The FCC will distribute the $9.2 billion in RDOF funding over the next 10 years to help the winning providers bring broadband service to some 5.2 million unserved homes and businesses in rural parts of the United States.

Under SpaceX’s RDOF Phase 1 award, the company’s Starlink broadband constellation will provide high-speed internet service to nearly 643,000 homes and businesses in 35 states. The

SpaceX’s share is the fourth largest of any of the winning bidders. Only LTD Broadband, Charter Communications, and the Rural Electric Cooperative Consortium were awarded larger shares of funding, winning $1.1 billion to $1.3 billion each to bring service to nearly 2.2 million locations combined.

SpaceX’s subsidy works out to $1,134 per location over 10 years, about 20% more than the $951 per location that Charter, the second largest U.S. cable provider, can offer under RDOF.

FCC said 99.7% of the locations covered under all RDOF Phase 1 awards will receive broadband service with speeds of at least 100/20 Mbps. SpaceX has told Starlink’s early subscribers they can expect 50-100 Mbps downloads, with some beta customers reporting even faster connections.

In October, the Federal Communications Commission said that three satellite providers — SpaceX, Hughes Network Systems and Viasat — had qualified to bid for the first round of RDOF funds. SpaceX provides broadband from low Earth orbit from its recently launch Starlink service while Hughes and Viasat have long provided internet service from geostationary orbit.

Hughes, according to the FCC’s Dec. 7 announcement, was awarded $1.27 million to provide internet service to some 3,700 locations in a single state.

Viasat was not among the 180 announced awardees.

RDOF rollover

The FCC had set aside $16 billion for the RDOF Phase 1 auction but “vigorous competition” among the more than 300 qualified bidders resulted in the program being able to cover 5.2 million unserved locations with only $9.2 billion of that amount, the FCC said.

The uncommitted funding, some $6.8 billion, will be rolled over into a future RDOF Phase 2 auction now worth up to $11.2 billion. The FCC said the Phase 2 funds will be used to subside broadband internet in partially served areas as well as some  unserved areas that did not receive funding under Phase 1.