FCC denies Elon Musk’s Starlink nearly $900M in subsidies

Republican critics raged after the Federal Communications Commission rejected nearly $900 million in subsidies for Elon Musk’s Starlink internet service – a move they decried as a vindictive play by the Biden administration.

Musk’s SpaceX had appealed an earlier move by the FCC in 2022 to deny the firm access to some $886 million in subsidies as part of a government program to boost rural internet service.

The five-member FCC, led by Democrat-appointed chairwoman Jessica Rosenworcel, affirmed that decision on Tuesday, finding that Starlink had “failed to demonstrate that it could deliver the promised service.”

Republican FCC Commissioner Brendan Carr dissented with the decision, asserting that “President Biden gave federal agencies a greenlight to go after” Musk after the billionaire bought Twitter for $44 billion last year.

In August, the Justice Department sued SpaceX for allegedly discriminating against refugees and asylees in its hiring practices. SpaceX fired back, arguing the feds’ case is unconstitutional.

Carr said the FCC’s rejection of subsidies “certainly fits the Biden Administration’s pattern of regulatory harassment.”

Another GOP Commissioner, Nathan Simington, concurred with Carr’s take, arguing that his FCC colleagues had improperly held SpaceX to 2025 performance benchmarks three years ahead of time.

“What good is an agreement to build out service by 2025 if the FCC can, on a whim, hold you to it in 2022 instead?” Simington said.

When the FCC originally rejected SpaceX’s bid for subsidies, Musk’s firm had already won approval to provide its high-speed, satellite-based broadband internet service to approximately 642,000 rural locations in 35 US states. At the time, Rosenworcel cited concerns that Starlink internet was falling short of the “promised speeds.”

This week, the agency pointed in part to concerns about the recent failure of SpaceX’s Starship, which exploded shortly after launch last month.

“The FCC followed a careful legal, technical and policy review to determine that this applicant had failed to meet its burden to be entitled to nearly $900 million in universal service funds for almost a decade,” Rosenworcel said in a statement.

Musk personally blasted the FCC’s decision, writing on X that Starlink “is the only company actually solving rural broadband at scale!”

“What actually happened is that the companies that lobbied for this massive earmark (not us) thought they would win, but instead were outperformed by Starlink, so now they’re changing the rules to prevent SpaceX from competing,” Musk said.

Musk has frequently clashed with the Biden administration since the president took office in 2020. The billionaire has referred to Biden as a “damp sock puppet” and accused the president of snubbing Tesla despite its leading role in the development of electric vehicles – a technology the administration supports.

Meanwhile, Musk’s business is facing several federal probes – including an ongoing National Highway Traffic Safety Administration investigation of its Autopilot assisted-driving technology.

On Wednesday, Tesla issued a massive recall of two million vehicles over concerns that it lacked sufficient safeguards to “prevent driver misuse.”