Elon Musk is revolutionizing how rural areas access the internet with Starlink's vast constellation of satellites that gives its customers high-speed internet without using cables or mobile towers. Starlink is indeed a game-changer in broadband internet connection.
More so, Business Insider reports that its profits help fund SpaceX's manufacturing expenses, enabling the company to build vast fleets of Starship rockets and fund the Mars mission. However, Musk's plans could be affected by the massive blow that just hit Starlink after the recent decision from the Federal Communications Commission (FCC) earlier this month.
Starlink Failed to Demonstrate It Could Deliver Promised Service
In a recent news release, FCC announced that it had rejected Starlink's bid to receive the $885.5 million subsidy through the Rural Digital Opportunity Fund. That means SpaceX's unit can no longer count on government aid to help expand its satellite internet service.
The FCC said that they decided because the broadband provider failed to demonstrate that it could deliver its promised service to rural areas, Engadget reported.
FCC chair Jessica Rosenworcel said that Musk's company had "real promise," but it could not justify the ten years of subsidies for developing a technology that needs a $600 satellite dish, noting that the commission needs to make the most of its limited funding for broadband expansion.
SpaceX first won the bid in December 2020 via an auction and promised that it would use the subsidies to serve 35 locations, as well as keep prices in sync with terrestrial broadband and meet the periodic service buildout requirements.
FCC's denial means that Starlink has to rely on funding to expand its outlined plans of sending thousands more satellites into low-Earth orbit. The commission's move also serves as a warning to other fund recipients. FCC is eager to improve internet access in rural areas and will scrutinize every proposal.
Will FCC's Decision Affects SpaceX From Sending Its Starhsip Rockets to Mars?
FCC's decision probably will not affect SpaceX from sending its fleet of Starship rockets to Mars. According to an article in Medium, Musk has the talent for making businesses profitable before anyone else can, just like Paypal and Tesla.
That is the same with Starlink, which has an estimated revenue of $500 million per month, and it could get bigger each year as it gains more customers worldwide as more countries slowly adapt to it.
Moreover, Starlink's internet connection is super reliable that can soon offer speeds of 10Gps in the coming years when it will become faster than the average internet speed even though its constellation of satellites is not yet complete. People would likely be happy to spend $40 a month on that.
Investors will also be looking at Starlink as the next Amazon with the potential to become profitable, which could easily be the next investment gold mine. That means Musk could get investment to cover the loss of FCC's subsidy to continue his projects.
But still, the decision of the FCC could affect the plans of SpaceX, and the company needs to raise funds from investors to pay for Starship development, that only has $2 billion in revenue for now. That means SpaceX probably could not afford to scale up Starlink for now.
Nonetheless, many believe that Musk could still find a solution to this problem, but this might mean that SpaceX and Starlink would miss a few deadlines.
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Check out more news and information on Starlink in Science Times.
