IT Home reported on December 13 that yesterday, the Federal Communications Commission (FCC) decided to reject SpaceX's StarLink satellite Internet service subsidy application, citing the failure of the Starship test flight.
The FCC also cited data shared by SpaceX that the company failed to fully meet the subsidy's performance targets.
The subsidy is a long-term subsidy for the Rural Digital Opportunity** (RDOF) program, which SpaceX has previously received. To qualify for the RDOF subsidy, SpaceX must submit two applications – an initial short-term application and a final, long-term application.
SpaceX's previous short-term application earned it an 8$5.5 billion (IT House Note: Currently about 61.)RMB 3.9 billion) to provide satellite internet service to 642,925 locations in 35 U.S. states.
After SpaceX won the bid, it delegated the submission of its long-term application to its subsidiary Starlink. The FCC rejected the application after multiple competitors questioned whether SpaceX would use Starship rockets to build the second phase of the constellation, and then SpaceX asked the FCC to reverse the decision and re-examine it, but the FCC announced yesterday that it would uphold the decision.
The FCC said it disagreed with SpaceX's argument that the committee had ruled out the possibility that it would be able to meet the RDOF requirements because it had already been approved in the first phase.
The FCC believes that Starlink is unable to meet the RDOF requirements for two main reasons: the first is the performance of the service, the second is the Starship rocket, and a key point of contention between the two sides is also Starlink's performance data.
The FCC presented data from Ookla, which describes Starlink's performance in 2021 and 2022, and concluded that it did not reflect Starlink's ability to perform well when the RDOF program began to cover it in 2025.
On appeal, SpaceX argued that Ookla data is not representative of Starlink's performance in 2025, while the FCC argues that Ookla data is the only data to rely on due to the lack of comparable systems.
The second reason for the FCC's decision to uphold the original verdict was SpaceX's Starship project. According to the FCC, the bureau relied on information about Starship in its assessment, which led to a relatively lack of confidence in Starship's ability to launch second-generation Starlink satellites.
In fact, SpaceX initially had two possible launch plans for Starlink, either using the Falcon 9 or Starship, but this decision drew criticism from competitors, and later the company decided to rely entirely on Starship for the launch.
SpaceX expressed disappointment with the FCC's decision, emphasizing that Starlink is the "most likely" best option to provide RDOF coverage. Although they considered the move to be too "arbitrary", the company eventually expressed its willingness to cooperate with the commission and to provide services to areas that were not covered.