SpaceX’s Starlink satellite network — which relies on hundreds of spacecraft built in Redmond, Wash. — has been awarded $885.5 million in federal subsidies to boost high-speed internet service to rural Americans.
The awards are part of a $9.2 billion allocation made under the terms of the Federal Communications Commission’s Rural Digital Opportunity Fund Phase I auction.
In all, 180 bidders won subsidies that are to be paid out over the next 10 years. Only one other satellite broadband provider is on the FCC list: Hughes Network Systems, which will receive $1.3 million to serve rural sites in Rhode Island.
The FCC said the RDOF program will provide $222.8 million to support broadband service to rural communities in Washington state. SpaceX is due to get the biggest share of those subsidies, amounting to $80.4 million. Washington also leads the state-by-state list for SpaceX subsidies.
More than 5.2 million homes and businesses are expected to benefit from the program, in which funds were allocated through a reverse auction.
“I’m thrilled with the incredible success of this auction, which brings welcome news to millions of unconnected rural Americans who for too long have been on the wrong side of the digital divide,” FCC Chairman Ajit Pai said today in a news release. “They now stand to gain access to high-speed, high-quality broadband service.”
The FCC could have allocated as much as $16 billion for Phase I, which targeted unserved communities. The unused $6.8 billion can be rolled over to the Phase II auction, which will focus on partially served rural areas as well as the few areas that didn’t receive Phase I funding. As much as $11.2 billion will be available for Phase II.
Most of the RDOF Phase I subsidies are going to terrestrial broadband service providers, led by LTD Broadband with an award of $1.32 billion. CCO Holdings, a subsidiary of Charter Communications, is due to serve 1.05 million sites around the country, leading the list for that metric.
The FCC said 85% of the 5.2 million sites to be served would get gigabit-speed broadband. SpaceX is due to serve nearly 643,000 sites with download speeds of 100 megabits per second or more.
SpaceX’s Starlink satellite development and manufacturing operation has been headquartered in Redmond since 2015. Each month, the Redmond factory turns out about 120 satellites, which are typically launched in batches of 60 by SpaceX’s Falcon 9 rockets.
Nearly 900 Starlink satellites are currently in operation. SpaceX has begun offering broadband through a beta test program that’s expected to expand early next year.
Some of Washington state’s rural communities have already gotten a preview. This summer, SpaceX made Starlink service available to the fire-ravaged community of Malden, to emergency teams fighting wildfires near Bonney Lake, and to the Hoh Tribe on the Olympic Peninsula.
“The last eight years, I feel like we’ve been paddling upriver with a spoon, and almost getting nowhere with getting internet to the reservation,” Melvinjohn Ashue, the tribe’s vice chair, said in a video produced by the Washington State Department of Commerce.
“It seemed like out of nowhere, SpaceX just came up and just catapulted us into the 21st century,” Ashue said. “Our youth are able to do education online, participate in videos. Telehealth is no longer going to be an issue.”
