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FCC Clears Way for SpaceX to Vie for Rural Broadband Subsidies

Todd Shields

(Bloomberg) -- The Federal Communications Commission changed course and voted to let satellite providers such as Elon Musk’s SpaceX vie for a piece of $20 billion in federal subsidies aimed at spreading broadband in the rural U.S.

The agency, after insisting satellite companies wouldn’t be eligible to bid in much of the auction, inserted language opening the door to their participation, FCC Chairman Ajit Pai said Tuesday during a news conference conducted by telephone.

“We did accommodate a request from a commissioner to include potential low-earth orbit satellite competitors that might wish to participate in the auction,” Pai said. He said the agency will review applications to ensure that a proposed technology “is able to do what it says it’s going to do.”

Space Exploration Technologies Corp., with a fleet of communications satellites, has pushed at the FCC to be eligible for the auction. It made little visible progress as recently as three weeks ago when the agency published its tentative rule. The document proposed to prohibit satellite providers from participating in important categories in an auction starting in October.

A sticking point was latency, or delay, built into a network. Satellites have a built-in disadvantage because signal must travel from the ground to the orbiter and back.

SpaceX has launched eight batches of roughly 60 satellites each to orbit to date; another launch is slated for June 12. The company’s “Starlink” website says it is targeting service in the northern US and Canada this year.

SpaceX’s Starlink satellites orbit close to the Earth, a factor that helps to reduce the lag time of their signals.

“SpaceX has asked only that it have the same opportunity to participate in the auction and be subject to the same auction procedures as all other potential bidders,” the company said in an April 10 filing. It argued against “artificial and unsupported limits on auction eligibility” that would “thwart competition” and undermine the goal of connecting “the hardest-to-serve Americans.”

FCC Commissioner Michael O’Rielly said he had proposed the language opening the way for satellite providers as a way to promote having more broadband providers taking part in the auction.

“We tried to finesse the language and modify it to remove some of the, I would call it, the prohibitions/harsh treatment of satellite services,” O’Rielly said.

“It’s still problematic. It’s not a technology-neutral approach. It’s better than it once was,” O’Rielly said. “Whether the satellite providers are able to take full advantage of it is unclear.”

The FCC didn’t immediately release the language that was inserted.

Closely held SpaceX didn’t immediately respond to a request for comment emailed to a media inbox.

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