SpaceX's Starlink receives $886 million from FCC to improve rural internet

The FCC is giving SpaceX’s satellite internet service, Starlink, $886 million as part of an effort to bring high-speed broadband to rural America. 

The money will come from a $9.2 billion fund the FCC created to subsidize expanding high-speed internet to underserved rural areas across the U.S. On Monday, the regulator announced the results of an auction in which telecom providers pledged to provide service to an area at a given performance tier and latency.

Ultimately, the agency awarded the money to 180 bidders. SpaceX was among the big winners; over the next decade, it’ll receive $886 million to supply broadband to 642,925 locations in 35 states. However, Charter Communications will receive the most funding: $1.2 billion to bring high-speed internet to over 1.05 million locations in 24 states.  

The fund is designed to improve internet speeds for 5.2 million homes and businesses used by over 10 million Americans. More than 85 percent of the destinations will receive gigabit-speed broadband, according to the FCC. The remainder should get download speeds of least at 100Mbps and uploads at 20Mbps. 

“We structured this innovative and groundbreaking auction to be technologically neutral and to prioritize bids for high-speed, low-latency offerings,” said outgoing FCC Chairman Ajit Pai. “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.”

To receive the funding, the participating companies had to commit to supplying broadband in each location at a certain speed and latency. The winning bids were then given to providers that offered the best performance.

According to the FCC’s rules, the resulting internet service plans must also be priced similar to what Americans pay for in urban areas. In addition, the winning bidders must begin supplying the high-speed internet to 40 percent of the required number of locations at the end of the third year during the funding cycle.

In SpaceX’s case, the company has already been offering the Starlink service to invited beta users for $99 a month and a $499 upfront fee. The satellite internet network can currently run at over 100Mbps and higher, but the eventual goal is to offer 1Gbps internet speeds. 

Currently, the Starlink beta is only available to users based in the northern U.S. However, the company plans on expanding the trial to more states early next year. Interested customers can go to Starlink.com to sign up for the email newsletter, which has been handing out beta invites.