August 10, 2022 – The Federal Communications Commission (FCC) has announced it has rejected Starlink Services, LLC’s long-form application to receive Rural Digital Opportunity Fund (RDOF) auction support.

The announcement was made in an FCC News Release, which includes a statement from FCC Chair Jessica Rosenworcel.[1] The official decision denying Starlink’s RDOF application can be found in a Public Notice issued by the FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics.[2]

Starlink RDOF Background

Space Exploration Technologies Corp. d/b/a SpaceX applied to participate in the FCC’s RDOF auction as a Low Earth Orbit Satellite Operator using its Starlink satellite broadband network. The FCC qualified SpaceX to bid in the Above Baseline and Low Latency service tiers in all 50 states. The Above Baseline tier requires an RDOF winning bidder to provide broadband service at speeds of at least 100 Mbps downstream and 20 Mbps upstream. The Low Latency tier requires 95% or more of all peak period measurements of network round trip latency be at or below 100 milliseconds.

Ultimately, SpaceX was one of the biggest winners in the RDOF Phase I auction.[3] SpaceX won a total of $885,509,638.40 in 10-year support to provide service to 642,925 locations in 35 states (approximately $1,377.31 per location). Pursuant to the FCC’s RDOF regulations, SpaceX assigned all of its winning bids to its subsidiary Starlink.

FCC Review & Decision

RDOF winning bidders who chose to assign some or all of their winning bids to related entities were required to do so by December 22, 2020, using the FCC’s Divide RDOF Winning Bids process. RDOF winning bidders were then required to submit a post-auction long-form application for support (FCC Form 683) no later than January 29, 2021. So, FCC staff reviewed and investigated Starlink’s RDOF long-form application for a period of time lasting more than 550 days. Presumably, there was some back-and-forth question and answer dialogue between the parties.

Nevertheless, following this extensive review of Starlink’s long-form application, the FCC concluded Starlink has “failed to demonstrate that [it] could deliver the promised service.”[4]

In the Public Notice denying Starlink’s RDOF long-form application, the FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics provide the following paragraph explaining why they did what they did:

The Bureau has concluded its review of LTD Broadband’s (LTD) and Starlink’s long form applications. LTD proposes to deploy gigabit fiber to 475,616 estimated locations in 11 states. Starlink, relying upon a nascent LEO satellite technology and the ability to timely deploy future satellites to manage recognized capacity constraints while maintaining broadband speeds to both RDOF and non-RDOF customers, seeks funding to provide 100/20 Mbps low latency service to 642,925 estimated locations in 35 states. The Bureau has determined that, based on the totality of the long-form applications, the expansive service areas reflected in their winning bids, and their inadequate responses to the Bureau’s follow-up questions, LTD and Starlink are not reasonably capable of complying with the Commission’s requirements. The Commission has an obligation to protect our limited Universal Service Funds and to avoid extensive delays in providing needed service to rural areas, including by avoiding subsidizing risky proposals that promise faster speeds than they can deliver, and/or propose deployment plans that are not realistic or that are predicated on aggressive assumptions and predictions. We observe that Ookla data reported as of July 31, 2022 indicate that Starlink’s speeds have been declining from the last quarter of 2021 to the second quarter of 2022, including upload speeds that are falling well below 20 Mbps. Accordingly, we deny LTD’s and Starlink’s long-form applications, and both are in default on all winning bids not already announced as defaulted. Because LTD has defaulted on its remaining winning bids, we also dismiss as moot LTD’s petition for reconsideration of the Bureau’s denial of its request for additional time to obtain an ETC designation in Nebraska and North Dakota.[5]

FCC Chairwoman Jessica Rosenworcel Statement

The News Release announcing the FCC is rejecting the long-form applications of both LTD Broadband and Starlink contains the following statement from FCC Chairwoman Jessica Rosenworcel on the decision:

“After careful legal, technical, and policy review, we are rejecting these applications. Consumers deserve reliable and affordable high-speed broadband,” said Chairwoman Rosenworcel. “We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks. We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.”

“Starlink’s technology has real promise,” continued Chairwoman Rosenworcel. “But the question before us was whether to publicly subsidize its still developing technology for consumer broadband – which requires that users purchase a $600 dish – with nearly $900 million in universal service funds until 2032.”

FCC Commissioner Carr Disagrees

FCC Commissioner Brendan Carr released the following statement on the decision to reject Starlink’s RDOF long-form application:

“I am surprised to find out via a press release – while I am on a work trip to remote parts of Alaska – that the FCC has made this significant decision. I will have more to say because we should be making it easier for unserved communities to get service, not rejecting a proven satellite technology that is delivering robust, high-speed service today. To be clear, this is a decision that tells families in states across the country that they should just keep waiting on the wrong side of the digital divide even though we have the technology to improve their lives now.”[6]

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[1] FCC Rejects Applications Of Ltd Broadband And Starlink For Rural Digital Opportunity Fund Subsidies, Applicants Failed To Meet Program Requirements And Convince FCC To Fund Risky Proposals, FCC News Release (Aug. 10, 2022) (News Release), https://docs.fcc.gov/public/attachments/DOC-386140A1.pdf.

[2] Rural Digital Opportunity Fund Support For 80 Winning Bids Ready To Be Authorized; Bid Defaults Announced; Listed Auction 904 Long-Form Applicants Must Submit Letters Of Credit And Bankruptcy Code Opinion Letters By August 24, 2022, AU Docket No. 20-34, WC Docket No. 19-126, WC Docket No. 10-90, Public Notice, DA 22-848 (Aug. 10, 2022) (Public Notice), https://docs.fcc.gov/public/attachments/DA-22-848A1.pdf.

[3] Rural Digital Opportunity Fund Phase I Auction (Auction 904) Closes; Winning Bidders Announced; FCC Form 683 Due January 29, 2021, AU Docket No. 20-34, WC Docket 19-126, WC Docket No. 10-90, Public Notice, DA 20-1422, (Dec. 7, 2020), https://docs.fcc.gov/public/attachments/DA-20-1422A1.pdf. There were 180 winning bidders, with the 10-year support amount totaling $9.23 billion and covering 5,220,833 locations in 49 states and one territory. Bidding concluded on November 25, 2020.

[4] News Release at p. 1.

[5] Public Notice at p. 9.

[6] Carr Responds to FCC Decision to Reject Starlink RDOF Bids, FCC Commissioner Statement (Aug. 10, 2022), https://docs.fcc.gov/public/attachments/DOC-386146A1.pdf.