FCC Rejects Applications of SpaceX and LTD Broadband for $2.2 Billion in Rural Digital Opportunity Fund Subsidies

Applicants Failed to Meet Program Requirements and Convince FCC to Fund Risky Proposals

WASHINGTON, August 10, 2022 (FCC PR) —The Federal Communications Commission today announced that it is rejecting the long-form applications of LTD Broadband and Starlink to receive support through the Rural Digital Opportunity Fund program.  The Commission determined that these applications failed to demonstrate that the providers could deliver the promised service.  Funding these vast proposed networks would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the United States, the Commission concluded.

“After careful legal, technical, and policy review, we are rejecting these applications.  Consumers deserve reliable and affordable high-speed broadband,” said Chairwoman [Jessica] 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.”

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FCC Plans to Better Scrutinize RDOF Funding After Free Press Investigation Exposed Questionable and Wasteful Subsidies

Former FCC Chairman Ajit Pai

WASHINGTON (Free Press PR) — On Monday, the Federal Communications Commission announced its intention to authorize an initial round of more than $311 million in funding for new broadband deployments. The original series of federal subsidies, based on the lowest bids broadband providers submitted in the auction phase of the Rural Digital Opportunity Fund (RDOF), came under heavy scrutiny after Free Press published a six-part investigation. The Free Press reports included exposés of several questionable applicants that sought to bring connectivity to unoccupied parking lots, storage tanks and traffic islands, as well as urban areas that other providers already served.

In response, the FCC has sent letters to 197 winning bidders from 2020, giving each the opportunity to withdraw its funding requests should the money be applied to building out broadband to places already served or “where significant questions of waste have been raised.”

Among recipients of these letters is Elon Musk’s Starlink, the satellite-internet company that won RDOF awards nationwide, including in many densely populated urban areas. The FCC has also denied all funding for AB Indiana, and rejected LTD Broadband’s application to serve in California, Kansas and Oklahoma — representing more than $271 million of the $1.3 billion awarded to the company — due to a failure to secure necessary state-level certifications in a timely fashion.

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