SpaceX’s Starlink satellite network wins a big contract to serve rural broadband

SpaceX’s Starlink satellite network has just won a big contract, worth $885.5 million in federal subsidies to boost high-speed internet service to rural Americans. Bringing internet to the unserved around the world has always been the main goal for the company and recently it has started testing internet service from its many small satellites and is ready for full roll-out.

This funding is to ensure that the company can quicken the rollout of their service. 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. More than 5.2 million homes and businesses are expected to benefit from the program, in which funds were allocated through a reverse auction.

There were more than 180 bidders who applied for the federal aid to improve internet access, and SpaceX received one of the biggest contracts. As you would imagine, the company will still need to adhere to certain conditions from the FCC in order to receive the subsidies.

Only one other satellite broadband received part of the funds, and that is Hughes Network Systems, who won only $1.8 million and will only serve the small state of Rhode Island. Three companies were awarded larger subsidies than SpaceX, but all of them are traditional broadband providers.

SpaceX Starlink will cover three dozen locations with the allocated subsidies, as per their application. It will take about 10 years to serve all the areas with internet.

“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. They now stand to gain access to high-speed, high-quality broadband service.”- said The FCC’s Chairman, Ajit Pai, said announcing the contract winners.

“We structured this innovative and ground-breaking 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.” – he added.

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