SpaceX has just won a key grant worth nearly $1bn from the Federal Communications Commission (FCC) to bring its low-Earth orbit Starlink satellite broadband service to people in 35 US states.
Elon Musk's space transportation services company has scooped a sizable chunk of the FCC's first round of support under the Rural Digital Opportunity Fund (RDOF). The first phase is worth $9bn, but the total amount allocated to the fund to patch up rural America's patchy internet is funded to the tune of $16bn over 10 years.
SpaceX has been launching about 60 Starlink satellites a month and currently has just under 1,000 orbiting above Earth at an altitude of 500km, or 330 miles.
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The company has frequently promoted its Starlink missions with Falcon 9 rockets with reusable components. FCC chairman Ajit Pai initially expressed doubt whether SpaceX's Starlink could meet its requirements for a service with a latency below 100ms for a mass-market service.
SpaceX's beta service – which opened in October and only services northern parts of the US and southern Canada – has consistently shown it can deliver download speeds from 50Mbps to 150Mbps and latency from 20ms to 40ms. Those speeds and latency beat what's available to business and residents in rural and remote areas of the US.
The Starlink public beta service costs $100 a month plus a $499 setup fee for the user terminal, tripod and Wi-Fi router. It's not known what the cost of the service will be when it's generally available.
The RDOF grant will be good news for SpaceX. Elon Musk in May said rocket launches had been reduced to $1m a pop, but noted that the cost of deploying and supporting end-user terminals was the biggest unsolved challenge for Starlink.
The states the FCC granted the most money to deliver SpaceX's satellite broadband service are Washington with $80m, Montana $73m, Virginia $62m, Pennsylvania $63m, Oregon $58m, Alabama $54m, Idaho $54m, Mississippi $44m, Colorado $40m, Maine $34m, Florida $33m, and Georgia $27m.
SpaceX appears to be the only low-Earth satellite provider that was awarded a grant. The only other low-Earth orbit bidder was Hughes Network Systems, a traditional satellite provider, which invested $50m in a UK government-backed consortium to save financially strapped Starlink rival OneWeb.
Last month, the FCC granted OneWeb licenses to access the US market for low-Earth orbit broadband satellite services.
The FCC announced SpaceX's grants as part of the first round of the RDOF, valued at $9.2bn over 10 years. RDOF aims to provide high-speed broadband internet services to 5.2 million unserved homes and businesses.
The remaining $6.8bn of the $16bn fund will be rolled over into a second auction, the FCC said.
Ajit Pai, the FCC chairman, who was appointed by outgoing US president Donald Trump, said the auction will be welcome news to millions of unconnected rural Americans.
"We structured this innovative and groundbreaking auction to be technologically neutral and to prioritize bids for high-speed, low-latency offerings," he said.
"This auction was the single largest step ever taken to bridge the digital divide."