Satellite Companies Can Bid for $9 Billion in Mobile Wireless Subsidies
by Douglas Messier
Managing Editor
Satellite companies will be able to bid for up to $9 billion in subsidies over the next decade under the Federal Communications Commission’s (FCC) 5G Fund for Rural America if they can meet a high standard for 5G mobile wireless service.
“We believe that adopting a round-trip latency requirement of 100 milliseconds or better for all areas better achieves our goal of ensuring access to services reasonably comparable to those in urban areas,” the FCC said. “One of the key benefits of 5G over other mobile technologies is reduced latency.”
“The Order also requires 5G Fund winning bidders to deploy networks providing 5G mobile broadband at speeds of a least 35/3 Mbps and meet interim deployment milestones beginning at the three-year mark and a final deployment milestone at the end of the sixth year,” the FCC said.
“Moreover, starting next year, carriers receiving legacy mobile high cost support must begin spending an increasing portion of their $382 million in support to bring 5G to rural, high cost areas,” the commission added.
The subsidies will be distributed in two separate auctions. Phase I will target up to $8 billion of support nationwide, with $680 million set aside to serve tribal lands.
“Phase II will provide at least an additional $1 billion, along with any unawarded funds from Phase I, to specifically target the deployment of technologically innovative 5G networks that facilitate precision agriculture,” the commission added.
Last month, three satellite broadband providers — Hughes, SpaceX and Viasat — were among 386 companies that qualified to bid on $20.4 billion in broadband subsidies under the FCC’s separate Rural Digital Opportunity Fund.
2 responses to “Satellite Companies Can Bid for $9 Billion in Mobile Wireless Subsidies”
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From what I understand, 5g speeds and low latency require a much denser installation of towers. Even with a subsidy, is this even economic in rural areas? Will the service cost be low enough and will there be enough money to maintain the system? I’m not seeing the value in spending tax money to subsidize the project. The money would be better spent making sure there is broader service coverage in rural areas at a “good enough” speed or even just a low speed where there was none before.
Given that SpaceX’s incremental cost per subscriber is essentially zero, I suspect it will be able to underbid pretty much every terrestrial wireless or wireline provider.