Hardware

SpaceX snags $885M from FCC to serve rural areas with Starlink

Comment

Image Credits: SpaceX

The FCC has just published the results of its Rural Digital Opportunity Fund Phase I auction, which sounds rather stiff but involves distributing billions to broadband providers that bring solid internet connections to under-served rural areas “on the wrong side of the digital divide.” Included is $885 million earmarked for SpaceX, whose Starlink satellite service could be a game-changer for places where laying fiber isn’t an option.

Only three other companies garnered more funds: Charter with $1.22 billion; Minnesota and Iowa provider LTD Broadband with $1.32 billion; and utility collective Rural Electric Cooperate Consortium, with $1.1 billion. Those are all traditional wireline-based broadband, and a quick perusal of the list of grantees suggests no other satellite broadband provider made the cut (180 bidders were awarded support in total).

The $9.2 billion auction (though the specifics of the process itself are not relevant) essentially asks for bids on how much a company can provide service to a given area for, ideally with a 100 megabit downstream and 20 up. Local companies can collect the hundred grand necessary to fund a fiber line where there’s now copper, and big multi-state concerns may promise to undertake major development projects for hundreds of millions of dollars.

SpaceX’s Starlink has the advantage of not requiring any major construction projects to reach people out in the boonies. All that’s needed is a dish and for their home to be in the area currently covered by the rapidly expanding network of satellites in low-Earth orbit. That means the company can undercut many of its competitors — in theory anyway.

Starlink puts towns devastated by wildfires online for disaster relief workers

Starlink has not had any major rollout yet, only small test deployments, which, according to SpaceX, have gone extremely well. The first wave of beta testers for the service will be expected to pay $99 per month plus a one-time $500 installation fee, but what the cost of the commercial service would be is anyone’s guess (probably a bit lower).

In order to secure the $885 billion in the FCC’s auction, SpaceX would need to demonstrate that it can provide solid service to the areas it claims to for a reasonable price, so we can expect the costs to be in line with terrestrial broadband offerings. No other satellite broadband provider operates in that price range (Swarm offers IoT connection for $5/month, but that’s a totally different category).

SpaceX’s Starlink asks potential service testers for addresses, says private beta starts this summer

The FCC doesn’t just knock on Elon Musk’s door with a big check, though. The company must demonstrate “periodic buildout requirements” at the locations it’s promised, at which point funds will be disbursed. This continues for a period of several years, and should help the fledgling internet provider stay alive while undergoing the rigors and uncertainties of launch. By the time the FCC cash dries up the company will ideally have several million subscribers propping it up.

This is “Phase I” of the auction, targeting the areas most in need of new internet service; Phase II will cover “partially-served” areas that perhaps have one good provider but no competition. Whether SpaceX will be able (or want) to make a push there is unclear, though the confidence with which the company has been approaching the market suggests it may make a limited play for these somewhat more hardened target markets.

The push for expanding rural broadband has been a particular focus for outgoing FCC Chairman Ajit Pai, who had this to say about its success so far:

We structured this innovative and groundbreaking auction to be technologically neutral and to prioritize bids for high-speed, low-latency offerings.  We aimed for maximum leverage of taxpayer dollars and for networks that would meet consumers’ increasing broadband needs, and the results show that our strategy worked. This auction was the single largest step ever taken to bridge the digital divide and is another key success for the Commission in its ongoing commitment to universal service. I thank our staff for working so hard and so long to get this auction done on time, particularly during the pandemic.

You can read the full list of auction winners at the FCC’s press release here.

FCC Chairman Ajit Pai will step down to make way for the Biden administration

More TechCrunch

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

16 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies