Small internet service providers say SpaceX's Starlink shouldn't get federal funds to expand internet access

The SpaceX Falcon 9 rocket takes off at the Kennedy Space Center on May 30, 2020 in Cape Canaveral, Florida.
Joe Raedle/Getty Images

Local internet service providers asked the FCC to look closely at winners of a fund to expand internet access.
The group says some, including SpaceX, are using "unproven" technology.
SpaceX is quickly deploying Starlink, a network of thousands of low-flying internet satellites.
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Local internet service providers are pressuring the US Federal Communications Commission to "aggressively" vet winning applications submitted by satellite and fixed wireless providers for federal funds that would aim to expand internet access across the country.

The Rural Digital Opportunity Fund is meant to help provide broadband access to millions of people in rural areas or regions that are costly to serve. The fund, which has awarded $9.2 billion, is expected to finance the extension of broadband to 49 states over 10 years. The FCC said that the funds would bring broadband to over 10 million rural Americans.

Among the 180 winning bidders was Elon Musk's SpaceX, which was awarded $885 million for its Starlink endeavor. Starlink's aim is to provide high-speed internet to nearly any location on Earth through a network of low-flying Seattleites. Starlink winning bid said it would bring broadband to over 600,000 US homes in 35 states.

A number of local electric cooperatives on Thursday questioned if some of the RDOF winners, like Starlink, can deliver what they have promised.

During a conference call Thursday, the National Rural Electric Cooperative Association, which represents over 900 local electric cooperatives, urged the FCC to look closely into the economic and technological viability of winning companies to decide if they are capable of delivering internet at the speed and reliability promised.

Though the winners have been chosen by the FCC, the firms still have to submit long-form applications to further detail their plans and qualifications, Ars Technica reported. The FCC could revoke funding if obligations aren't met, the publication said.

"Our concern really hinges on the fact that a number of bidders, they bid into higher speed categories with technologies that have not been proven to meet those speeds," said the association's CEO Jim Matheson. "A couple of examples SpaceX bid into the 100 down 20 megabits and up category, with their satellite program that's still in beta testing not a proven technology," Matheson said.

SpaceX didn't respond to a request for comment.

Last month it deployed 60 Starlink satellites ino space, bringing the total satellite internet constellation to 1,000 spacecraft. SpaceX has a goal of launching up to 42,000 Starlink satellites to provide superfast internet around the globe.

NRECA wants to make sure the technology will indeed reach those who struggle to access the internet. "Rural America has been left behind so many times in the past," Matheson said.

Matheson cited previous examples of companies that received millions of dollars in federal funds to expand broadband services to rural areas but failed to do so, including CenturyLink and Frontier Communications. Both companies recently announced that they failed to meet the deployment deadline set when they received the funds, according to Matheson.

Matheson and other critics on the call, including National Rural Telecommunications Cooperative, Midwest Energy & Communications in Michigan, and Choptank Electric Cooperative in Maryland, were also concerned that some of the locations that SpaceX is targeting for internet delivery are non-rural.

Starlink is expected to cover areas such as the Bronx in New York City and airports in Newark and Miami.

Separately, Russia may fine individuals or companies for using Starlink internet. The proposed law aims to prevent citizens from accessing the internet provided by Musk's satellites.

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