SpaceX Hangar Florida
SpaceX doesn't plan to participate in the Connect America Fund II program, despite originally complaining that the FCC's rules precluded its participation. Credit: SpaceX

WASHINGTON — SpaceX says it will not go after any of the $2 billion in rural broadband subsidies the U.S. Federal Communications Commission will begin doling out this summer under its Connect America Fund II program.

The FCC invited telecommunications providers — including satellite operators — to bid July 24 for Connect America subsidies meant to make it financially worthwhile for companies to build out broadband networks to rural and remote areas otherwise too expensive to cover. The subsidies will be paid over 10 years using Universal Service Fund fees U.S. telcos routinely collect from customers.

SpaceX complained last fall that its planned Starlink broadband satellite constellation would not have a fair chance at the subsidies because the FCC’s Connect America rules penalized all satellites as “high latency” even though non-geostationary satellite systems like Starlink won’t suffer the same signal lag as satellites in much higher orbits.

SpaceX says its Starlink satellites, which will orbit between 1,100 to 1,300 kilometers, will need just 25 to 35 milliseconds to bounce signals to the ground and back, meeting the FCC’s 100-milliseconds-or-less threshold for being classified as “low latency” under the Connect America rules. In contrast, geostationary satellite links can take 500 milliseconds or longer to complete their 36,000-kilometer round trip.

While SpaceX ultimately convinced the FCC not to lump Starlink and other non-geostationary orbit satellite systems with higher latency orbits, the company formally notified the FCC earlier this month that it still won’t be seeking Connect America funding for Starlink.

“SpaceX believes that it is more effective to leverage advanced technology and smart private sector infrastructure investment to reach America’s unserved and underserved population, rather than seek Government subsidization for this effort,” SpaceX’s Vice President of Satellite Government Affairs, Patricia Cooper, wrote in a May 8 letter to FCC Chairman Ajit Pai.

Cooper thanked the FCC for revising the Connect America auction rules, but said systems like Starlink won’t need government funding to connect rural and other remote areas.

“Innovation in space and ground technology will drive the cost of connectivity downward, ultimately reducing the need for taxpayer involvement in ongoing broadband expansion,” she wrote.

SpaceX launched two prototype Starlink satellites in February on a Falcon 9 mission that first deployed the Paz radar satellite for Spanish operator Hisdesat. In March, the FCC authorized SpaceX to provide broadband in the United States.

SpaceX is not alone in snubbing the Connect America program. OneWeb founder Greg Wyler criticized subsidies last fall when he testified alongside Cooper at a congressional hearing on satellite broadband constellations.

“All this talk of subsidies is confusing for me as an entrepreneur … I think we are taking the subsidy as a given as opposed to saying ‘maybe we should have technologies that don’t need it’ and focus on that,” he said.

OneWeb is building a low-Earth-orbit constellation of hundreds — and possibly thousands — of satellites to bring global internet access. The FCC has authorized OneWeb for 720 satellites. OneWeb has asked for that number to be expanded to 1,980. The company’s first 10 satellites launch late this year on an Arianespace Soyuz rocket.

Caleb Henry is a former SpaceNews staff writer covering satellites, telecom and launch. He previously worked for Via Satellite and NewSpace Global.He earned a bachelor’s degree in political science along with a minor in astronomy from...