SpaceX is eligible to qualify for subsidies that will be awarded by the U.S Federal Communications Commission (FCC). The subsidies, worth $20.4 billion, are part of the Rural Digital Opportunity Fund (RDOF).
On October 13, the FCC published a communique that listed out the “qualified bidders” for the RDOF funds. The list includes SpaceX alongside 385 other telecom providers.
What are the FCC Funding Program Details?
The FCC is the federal agency that regulates communications by radio, television, wire, satellite and cable across the United States. The agency is responsible for granting regulatory approval for SpaceX to deploy their Starlink satellite constellation.
On October 29, the FCC will initiate Phase 1 of the RDOF auction so bidders can present their propositions. The auction will be divided into two phases.
Phase I will award up to $16 billion in support over 10 years for the deployment of fixed broadband networks to homes and businesses across rural america. The FCC is expected to award the remaining $4.4 billion during Phase II, to target partially served areas.
To qualify for the bid, telecom providers needed to demonstrate a service latency less than 100 milliseconds.
Latency refers to how much time it takes for a signal to travel to its destination and back. When referring to internet connections, the destination is usually the Internet Service Provider’s (ISP) servers.
SpaceX was able to do just that. Last September, the company sent a memo to the FCC that disclosed its latest speed updates about its Starlink beta service. The tests, conducted via Ookla’s Speedtest platform, have resulted in download speeds of over 100 Mbps (ovr 12.5 MB/s), and upload speeds of 40 Mbps more-or-less (around 5MB/s). More importantly, round-trip latency times varied between 40 and 50, well below the 100 ms threshold.
How does FCC Funding eligibility help SpaceX?
Provided that the aerospace company submits a successful bid and qualifies for the RDOF, this would spell great news.
The program will constitute a very important revenue stream for SpaceX to continue funding their ever-increasing Starlink constellation.
Additionally, SpaceX is able to prove their doubters wrong. One of the most prominents skeptics was the FCC Chairman himself, Mr. Ajit Pai.
Last May, Pai proposed to classify SpaceX and all other Low-Earth Orbit (LEO) providers as high-latency providers. Pai eventually backed-off that claim but said that companies will have to prove they can offer low latencies, which SpaceX did.
Elon Musk’s company looks well on its way to submit a successful bid!