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SpaceX’s Starlink satellite constellation subsidy is more pronounced than the material the company is utilizing

Although the Rural Digital Opportunity Fund (RDOF) for SpaceX’s Starlink broadband is enormous, the project’s effect will be moderate. The company gathered $885.5 million in the required $9.2 million that was supposed to be spread over ten years. This amount is huge, especially for a first-time company dealing with the US Federal Communications Commission. The amount awarded to this company ensures that it operates at 10 percent of the total RDOF funds that the FCC will be cashing towards the broadband service to facilitate internet connectivity to over 5 million households and commercial enterprises in the remote areas of the United States. 

SpaceX has illustrated that it understands Washington’s bureaucracy in the short time it has dealt with the FCC. Telecommunication organizations like CenturyLink, Windstream, and Frontier will continue to receive less RDOF funds even with their decades of contracting the FCC subsidy programs. Moreover, the geosynchronous broadband satellite operators, which should have commanded these funds’ largest share, fell short, with others receiving nothing in the allocation. Hughes Network Systems, which previously solicited $122 million from the FCC auction program held two years ago, only managed to garner $1.3 million with Viasat, a qualified operator in this industry, receiving nothing. 

Viasat made a public outcry over the biased latency requirements for satellites, which it termed the source of its failure in the auctions. SpaceX managed to persuade the FCC that it could provide low-latency internet at fast speeds. This persuasion gave the Starlink constellation a competitive advantage over the geosynchronous orbital services which operate outside the required range. Additionally, Starlink secured its deal with the FCC because its propensity to deliver 100 Mbps internet speeds beat the commission’s 25 Mbps suppressing any other metered or wireless connection on the commercial market. 

For ten years, $885.5 million appears insignificant for developing a 12000 satellite constellation and running it. The company explained that approximately $90 million would deliver four Falcon 9 deployments and not the 150 to 250 Starlink satellites that other rockets can host. The company stated that the RDOF fund is the irreducible minimum that cannot cover the upfront costs of the project. Moreover, the funding cannot entirely cover the hardware costs for developing the devices to link the households and businesses to the wireless internet that they intend to offer. Generally, SpaceX will be losing money on the dishes for the coming decade until the resources’ prices start dropping.

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