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SpaceX wins $885.5m to connect rural America

FCC awards the funding as part of $9.2 billion broadband war chest

Elon Musk's SpaceX venture has won $885.5 million in funding for rural broadband from the Federal Communications Commission (FCC).

The win will enable the company to connect rural Americans across 35 states and help close the digital divide.

The money is part of a $9.2 billion funding program to give rural Americans broadband access in 49 states. Called the Rural Digital Opportunity Fund (RDOF), it allocated the funds via a reverse auction among 300 potential suppliers, 180 of which won bids. Auction winners included cable companies, incumbent telcos, and fixed wireless providers.

Altogether, the auction winners will serve over 5.2 million homes without broadband with speeds of at least 100 Mbps download and 20 Mbps upload, said the FCC. Most of these areas (85%) will get Gigabit speeds.

SpaceX must serve 642,925 locations within the next six years under its funding.

Musk's company didn't get the most money for serving rural areas. That went to LTC Broadband, which won $1.3 billion to serve 15 states. Charter Communications scooped up $1.2 billion to serve locations in 24 states, and the Rural American Broadband Consortium got $1.1 billion to serve 618,476 locations across 22 states. Satellite competitor Hughes Network Systems got just $1.27 million to serve areas in a single state.

The FCC launched the RDOF in February as a two-phase program, following a $1.5 billion second-phase auction in 2018 for its Connect America Fund. The Commission had set aside $16 billion for phase one of the RDOF, but the competitive bidding process saved it $6.8 billion in funds to roll into phase two of the project. That will focus on partially served areas, it added.

Announced in 2015, SpaceX's Starlink initiative began its launches with 60 satellites this May. The units, which orbit at 342 miles, feature four antennas, a single solar array, and ion thrusters. The company has been rapidly launching rockets since and had flown over 950 of them by the end of October. It already had FCC approval to launch 12,000 satellites and filed paperwork this fall for another 30,000.

SpaceX has already offered satellite-based internet services to customers under a beta test program priced at $99 per month along with a $499 charge for the connection hardware, say reports. It offered 50-150 Mbps speeds and 20-40 ms latency. It also announced a partnership with Microsoft to connect its Azure cloud computing network to its space-based infrastructure.

Amazon is following in Starlink's wake with its Project Kuiper initiative, which would also put broadband satellites around the Earth. The company gained FCC approval for its deployment in 2019 and must launch its equipment by 2029.

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