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The FCC announced today that it wont award Elon Musks Starlink an $886 million subsidy from the Universal Service Fund for expanding broadband service in rural areas. The money would have come from the Rural Digital Opportunity Fund program (RDOF), but the FCC writes that Starlink wasnt able to demonstrate that it could deliver the promised service and that giving the subsidy to it wouldnt be the best use of limited Universal Service Fund dollars.

That was the same reason the FCC gave when it rejected Starlinks bid last year, which led to this appeal. SpaceX had previously won the bidding to roll out 100Mbps download and 20Mbps upload low-latency internet to 642,925 locations in 35 states, funded by the RDOF.

The FCC is tasked with ensuring consumers everywhere have access to high-speed broadband that is reliable and affordable, FCC Chairwoman Jessica Rosenworcel said. This applicant had failed to meet its burden to be entitled to nearly $900 million in universal service funds for almost a decade. FCC commissioner Brendan Carr dissented, writing that the FCC did not require and has never required any other award winner to show that it met its service obligation years ahead of time.

Christopher Cardaci, head of legal at SpaceX, writes in a letter to the FCC that Starlink is arguably the only viable option to immediately connect many of the Americans who live and work in the rural and remote areas of the country where high-speed, low-latency internet has been unreliable, unaffordable, or completely unavailable, the very people RDOF was supposed to connect.

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Starlink loses out on $886 million in rural broadband subsidies - The Verge