16 ms·

SpaceX gets $886M from FCC to subsidize Starlink in 35 states

288 points by samizdis 6y ago

mtgx 6y ago
Are there any caveats to these subsidies, like allowing the government to tap all Starlink connections for surveillance, etc? I mean the U.S. government already has such deals with other ISPs, and now the U.S. military wants to use Starlink, too, so I wouldn't be surprised if the DoD got involved in this FCC deal with SpaceX for more reasons than one.
lgats 6y ago
SpaceX has been awarded $885.51 million by the Federal Communications Commission to provide Starlink broadband to 642,925 rural homes and businesses in 35 states. That's $1376.52 in subsidies per customer
- smithza 6y ago
  There is nothing in the article about customers personally benefiting from this. SpaceX could take the money and put it towards ground infr., etc., customers only seeing reduced payments due to NRE/maintenance subsidies. It sounds like SpaceX has quite a bit of autonomy here.
- veilrap 6y ago
  My initial reaction agrees that does sound quite high. However, I wonder what the alternative strategy costs for rural broadband are. My guess is that laying a lot of cable to remote locations could possibly be even higher than the $1376.52 per customer cost? It seems like something like Satelite internet connections could be less to set up, but it's not clear to me the cost of the equipment, installations and upkeep are in that case? Also 1376 / 12 months averages out to only about $110 per month per customer for just one year. Which honestly doesn't sound too bad.
  - myself248 6y ago
    I wonder, what're the costs of providing fixed landline service, even in a city? From burying the lines or stringing them on poles, to wiring up each drop into each dwelling, all the splices and repeaters and what-not, to the central office building and equipment and power and stuff, and maintaining that entire physical plant for years, it's all got to add up. I'd imagine it's well within an order of magnitude.
    - maccam94 6y ago
      Don't forget that the poles are usually owned by an existing power or telecom company, and if they even let you use their poles, you have to pay rent on the pole. Same for conduits. Building new poles and conduits can also be legally difficult and expensive.
  - maccam94 6y ago
    The subsidy is spread over 10 years, so they only get $88.5M/year.
- baldeagle 6y ago
  It is also over 10 years... so maybe a set of free equipment and $8 off a month? Note: a traditional cable company got more than $1B is subsidies, so maybe the distributed model is actually cheaper. Depends on replacement costs and lifecycle (in both cases).
  - Tuna-Fish 6y ago
    The subsidy goes to SpaceX, in exchange for offering service at the required locations at the required performance. There is no requirement whatsoever for SpaceX to pass any of it on to the customers, and in fact doing so would be against the spirit of the offering. It's meant for incentivizing the buildout of infrastructure, not for passing on savings to consumers.
- deleted 6y ago
  [deleted]
- leecb 6y ago
  That's $11.47 per month, per customer. Slightly over 10% of current pricing. > Funding is distributed over 10 years, so SpaceX's haul will amount to a little over $88.5 million per year.
- xoa 6y ago
  The beta terminal cost is $500, and beta service is $100/month (at up to ~150 Mbps or so right now?). So the money would cover the terminal cost to those customers and then full freight 8 months of service at current pricing. Alternatively/in addition, and more similarly to traditional in-ground service, it may also simply help fun actual infrastructure in the form of more/faster deployment of ground stations and sats. SpaceX may also (and it seems likely) have more standard service tiers for full general release, so something at 25 Mbps for $25/month say, and then working their way up. If they use this money to cover the minimum tier and then let people choose to pay the difference for more if they desired, then that'd bump the coverage to close to 3 years. For the level of service they're offering that seems pretty reasonable honestly, and a much more efficient use of dollars than typical efforts (though WISPs might do even better in certain areas, they have different trade offs). Since it appears how the companies make use of the money is fairly flexible SpaceX will probably deploy it towards a few different metrics. The $500 upfront capex is probably the biggest impediment for a lot of people so getting that down is important, but if internally they had any issues with getting their sat shells filled out that'd be a good upfront usage too. This is also spread out over 10 years, so where the most bang for buck is delivered will probably vary over time, by 2025 let alone 2030 SpaceX's economics will certainly look quite different with Starship deployment and filled shells/done ground stations.
  - jjeaff 6y ago
    I don't believe the subsidies are meant to subsidize the customer. Rather they are subsidizing the upfront capital cost to build out infra. In other words, they get all the money, even if no one subscribes.
    - xoa 6y ago
      From the article: >FCC funding can be used in different ways depending on the type of broadband service. Cable companies like Charter and other wireline providers generally use the money to expand their networks into new areas that don't already have broadband. But with Starlink, SpaceX could theoretically provide service to all of rural America once it has launched enough satellites, even without FCC funding. >One possibility is that SpaceX could use the FCC money to lower prices in the 642,925 funded locations, but the FCC announcement didn't say whether that's what SpaceX will do. SpaceX is still in the painful bootstrapping phase of things, and their cost structure right now is still higher then what they ultimately hope for. But from the sound of it they've got a lot of flexibility in how they deploy this money so long as they ultimately meet service targets, and they're only one player amongst many even for this subsidy money. If they're satisfied with service people don't tend to casually switch providers, so there is real value in being first. I think therefore SpaceX may consider using some of the money at least to lower the bar of someone signing up and try to get currently underserved households onboard as customers faster. Additionally, don't forget this is only the first round, there is even more money available next time. Given the nature of bidding, I assume strategic calculations about how to win more next time will also play a role.
- reportingsjr 6y ago
  Welcome to the US, where cities are constantly sucked dry of money to pay for people to move in to rural areas and destroy nature. Yay!
davidkuhta 6y ago
For the curious. > The 35 states where SpaceX won FCC funding are Alabama, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and Wyoming.
liquidise 6y ago
This headline is only part of the story, looks like ~10 ISP's were awarded sizable subsidies. While i am not a fan of subsidies in general, the ISP space is particularly tricky for free-market forces to ensure competition. The capital requirements are overwhelming in many cases for a traditional startups, leaving the only other option as local/municipal votes, which have been successful in some areas. Long-term, i could see internet access to receive utility status in the states. Until that happens, funding ISP competition, particularly in rural areas feels like a wise move.
- jjeaff 6y ago
  It does seem wise, except I believe that ISPs have already received large subsidies in the past and then never completed their end of the bargain. Without consequence, of course. I hope none of those companies received any more subsidy.
  - 1996 6y ago
    > never completed their end of the bargain. Without consequence, of course That's exactly why they need more money!! Because, maybe, this time they will? If not, give them a bit more!! Government subsidies at their finest! /s
- jseliger 6y ago
  I've worked on various broadband-related projects as a grant-writing consultant (https://seliger.com/2009/11/13/adventures-in-the-broadband/ https://seliger.com/2009/11/13/adventures-in-the-broadband/), SpaceX will definitely not be the worst of the bunch and will almost certainly be among the top quarter.
- Mountain_Skies 6y ago
  My recent employer was one of the ISP providing rural telecom service. These subsidies accounted for a hefty percentage of our income and the company was still perpetually on the edge of failure. Most of our competitors were in similar situations, loaded down with breathtakingly large amounts of debt and expensive to maintain decaying infrastructure, much of it purchased from the Baby Bells when they got out of the market. I can't say that the company was particularly well run but am certain that without the government subsidies, the business would collapse and large numbers of rural customers would be without telecom services, which extend beyond just internet access. Not sure what Starlink's existence is going to do to the company. Offering 25 Mbps aDSL with low reliability isn't going to compete very well if a customer can get 100 Mbsp service for a similar price and higher reliability. On the other hand, this might be justification the company can use to stop servicing the most expensive of the rural accounts to service while focusing on small town gigabit service that can compete with a reasonable expense to service.
juanbyrge 6y ago
If there is any corporate entity I'd happy giving public funding, it would be SpaceX. Their end goal is to settle Mars and potentially other bodies in the solar system. Compared with the absurd amounts of money wasted on defense contractors, I am perfectly happy with funding SpaceX in every way possible.
- sneak 6y ago
  SpaceX is also a defense contractor. https://spaceflightnow.com/2020/10/05/nro-reveals-plans-for-previously-undisclosed-launch-with-spacex-this-month/ https://spaceflightnow.com/2020/10/05/nro-reveals-plans-for-...
  - remarkEon 6y ago
    Good. They seem to be the first defense contractor in a long time, maybe ever, with a specific eye on controlling costs. It may not be this way forever, but for now the taxpayers should get the savings where they can.
    - vsareto 6y ago
      Maybe they can relax the work/life balance now
      - tF73d78kq8t3R6n 6y ago
        That’d cause their costs to skyrocket.
      - JumpCrisscross 6y ago
        > Maybe they can relax the work/life balance now Nobody should feel forced to work more than they want to. (The abjectly lazy aside.) But we should also be free to work as hard as we want. And to freely associate with those with similar preferences. I used to love burning both ends of the candle. It was invigorating. I didn't ruin my health for it. And it gave me life lessons I could not have learned any other way. The fruits of those years, as well as finding other interests, nudged me to a different preference. Which involved new (or changed) colleagues. I don't see why, to be satisfied with one arrangement, we must denigrate the other--they're just different solutions. Work and life don't balance on a scale. The dynamic is more like homeostasis. One's stable ratio depends on a variety factors, extrinsic and from within, and what makes one person happy will be ruinous or lethargic for another.
ogre_codes 6y ago
The government has been subsidizing rural ISPs for quite a while. This effort is much more reasonable than many similar efforts because unlike many of the people sucking up these subsidies, it actually reaches everyone. Most of the carriers who accepted subsidies to increase rural internet access just picked the low hanging fruit and often introduced new service in regions which were already covered by other services. My old house was stuck on 10GB service for years while ISPs bumped up subsidized service to many closer in/ semi rural areas. I have good access now, but just a few years ago I'd have loved the option of getting SpaceX's service at full price.
tzm 6y ago
I live in the Mission hills of SF Bay and pay $600 / mo for internet via mobile hotspot (LTE). HughesNet is terrible. Nothing else is available. I can't wait for Starlink beta!
- politelemon 6y ago
  > $600 / mo for internet via mobile hotspot (LTE). I'm not familiar with that area but my mind boggles at this amount. What kind of speeds do you get? Are that ISP able to offer a cheaper deal of some sort, eg 12 months? Why is it so much!? Wishing you well, I hope you get Starlink soon in your area, or any alternatives.
  - tw04 6y ago
    I would assume it's so expensive due to data usage. Anything over LTE I've seen has ridiculously low data caps. I think as part of this funding the FCC should have a mandatory requirement of no data caps, or a cap of something more reasonable like 10TB a month that increases 5TB every X number years.
    - google234123 6y ago
      1TB sounds more reasonable than 10. 10 is way over the top
      - tw04 6y ago
        I assume you don't have kids stuck at home during covid. I have friends that are burning through 1TB of data a month like it's nothing. Between zoom/webex meetings all day for everyone in the family, and netflix in the evenings because they can't really go play with other friends, 1TB is a joke. Heck, Cyberpunk 2077 is a 70GB download ALONE - that's 7% of your cap gone from you or your kid installing one game.
        google234123 6y ago
        That game will provide you plenty of content for that data. Anyway, just because a few people use ~1TB of data doesn't mean every LTE plan should provide 10TB. You are asking for a 500x increase in the typical LTE data plan.
iptrans 6y ago
Riddle me this, would SpaceX not have built out Starlink if they didn't get this subsidy? Since they already put Starlink satellites in orbit without any guarantees of subsidies, was this good use of government funds?
- rictic 6y ago
  Two more questions: Can the subsidy be used to accelerate making the service available to more users sooner, and at higher quality? Most likely yes, because with the design of Starlink, more satellites gives better service. A related question: Were early subsidies into solar power a big help in climbing the learning curve while solar power had uncompetitive performance/$, or did advancements in related disciplines like chip manufacturing carry most of the weight?
  - aaronblohowiak 6y ago
    Why should rural lifestyle be subsidized ?
    - baq 6y ago
      Because dense urban is unsustainable without sparse rural providing food?
    - giantg2 6y ago
      Why should any lifestyle be subsidized? Subsidies happen for rural and urban individuals.
    - stetrain 6y ago
      Because not everyone has full freedom in deciding where to live, and access to broadband is a positive factor for financial mobility and economic activity.
    - serf 6y ago
      (playing devils' advocate) City/population-center living is wildly inefficient for a host of reasons, and a dollar of urban development towards a major metropolis goes much less far than a dollar of urban development for a rural community. We deal with the inadequacies of living in such big population dense areas because we want to; not because it's efficient. Turns out it's not efficient to stack up as many people vertically as possible. It over-burdens local municipal systems to the point of skyrocketing economic costs, creates more job scarcity due to sheer population and high real-estate costs, and creates untenable situations during times where population density is a net-negative, like during a pandemic. Rural living has major problems too; lack of access to high quality services and travel come to mind -- but these are things that can be improved upon, and by every metric these things are improving. There is no such game-plan for dealing with the burdens of heavy density populations mid-city; it's considered to be a fact of life.
elihu 6y ago
I read a theory once that one of the reasons why so many Boomers were able to buy land or houses cheaply that later appreciated substantially in value was the interstate highway system built during WWII. Suddenly, a lot of real estate was in easy driving range of employers, and so there was a period of over-supply of highly desirable real estate. I wonder if Starlink (and changes in work expectations due to the pandemic) will have a similar effect; a lot of rural land that people might have been inclined to move to if only they had some way to do their work remotely is now suddenly a realistic option.
- pkaye 6y ago
  What percent of workers do work that can be done remotely?
  - oedoedxef 6y ago
    Currently, or 5 years from now? Anyone working in the "services" industry, which is most of the United States, can work from home. And if the laws ever change for restaurants and auto-repair shops, I suspect you might see that being done from home as well.
    - 0xffff2 6y ago
      What kind of restaurant job do you see being done from home?
      - elihu 6y ago
        I'd guess that user oedoedxef is referring to running a customer-facing business (a diner, an auto repair shop, or whatever) out of a primary residence, whether that means living in a commercially-zoned property or doing commerce in a residentially-zoned property or perhaps eliminating the distinction entirely.
        0xffff2 6y ago
        That's my guess as well, but that's a very, very strange definition of working from home.
grecy 6y ago
For fun, highest to lowest: Etheric: $3,857/home CentryLink: $3,396/home Frontier: $2,916/home Windstream: $2,715/home LTD Broadband: $2,500/home Connect Everyone: $2,484/home Resound: $2,443/home AMG: $2,082/home GeoLinks: $1,831/home Rural Electric: $1,779/home SpaceX: $1,377/home Comcast: $1,151/home Even just 5 years ago who would have guessed satellite internet would be the cheapest... EDIT: Sorry for the ordering mistake - Comcast are "cheapest", SpaceX 2nd.
- ars 6y ago
  In your table Comcast ($1,151) is cheaper than SpaceX ($1,377).
- kevin_thibedeau 6y ago
  Subsidies for Frontier are pretty galling. I have an urban home in their original core market and they wouldn't bother fixing a phone line that went from 4Mb to 2Mb after switching to a new pair when the original went bad. They are pocketing everything and disinvesting in their wires.
- bryanlarsen 6y ago
  Most of the others are providing gigabit versus Starlink's 100Mbit.
  - wmf 6y ago
    Gigabit at ~$3,000 seems like a bad tradeoff compared to 100 Mbps for $1,377.
ccorda 6y ago
This was a reverse auction, where the goal was to minimze cost to government to get high speed internet in rural areas. Starlink bid in the Above Baseline tier, meaning ≥ 100/20 Mbps (with data cap of ≥ 2 TB). According to the FCC [1], 99.7% of locations are at that tier or higher, and 85%+ in the highest Gigabit (1000/500) tier. So it looks like the auction funded gigabit where there was a provider bidding at that tier, and the rest went heavily to SpaceX. One question I have is whether these gigabit deployments actually happen, or if Starlink will pick off legacy business so quickly (full launch nationwide next year) such that rural providers aren't able to take the subsidies and actually implement the new offerings. [1] https://mobile.twitter.com/matthewberryfcc/status/1335978529457115143 https://mobile.twitter.com/matthewberryfcc/status/1335978529...
- madamelic 6y ago
  >One question I have is whether these gigabit deployments actually happen, No. Every time the US gives money to telecoms to roll out fiber, the telecoms play a shell game and disappear the money or use it to fight against municipalities that try to build their own infrastructure. https://nationaleconomicseditorial.com/2017/11/27/americans-fiber-optic-internet/ https://nationaleconomicseditorial.com/2017/11/27/americans-...
  - myself248 6y ago
    Thank you for that link. I remember the disappearance of the Project Pronto money in the 90s, and it's bothered me ever since. It's nice to know I didn't dream the whole thing.
  - mtalantikite 6y ago
    Verizon signed a contract with NYC in 2008 to pull fiber to New Yorkers by 2014 and I still can't get fiber here in Williamsburg, Brooklyn. At this point I've really given up hope that I'll ever get fiber into the home on a reasonable time scale.
    - grecy 6y ago
      In such a litigious society it's amazing Verizon can't be held to account for this, and at the very least be forced to pay back the money.
nikolay 6y ago
Elon Musk is no Iron Man. All his companies are built with taxpayer money. When did I sign up to be irradiated by his satellites?!
- stetrain 6y ago
  Those darn radio waves! Hold on I gotta take this call on my iPhone.
  - nikolay 6y ago
    Well, I may want to go to a refuge without any electronics.
    - AveryEm 6y ago
      What are satellites up in orbit stopping you from not using electronics?
      - nikolay 6y ago
        I mean, a refuge w/o radio pollution, including that from my own devices.
    - stetrain 6y ago
      If you find a spot on Earth with no radio waves let us know. AM goes pretty far, even amateur radio can travel across continents in the right atmospheric conditions. GPS Satellite TV Every other civilian and military Comsat since we started launching things. Starlink isn’t the problem if you are worried about being “irradiated”, the nuclear fusion reactor at the center of our solar system is likely of greater concern.
      - nikolay 6y ago
        GPS and Satellite TV are different, plus, your way of thinking is flawed - just because there are precedents, it doesn't mean we should continue to add on top of them! In addition to light pollution, radio pollution is worse than ever. After Starlink setting a brew type of precedent, more will try doing the same.
mempko 6y ago
All of Musk's endeavors are subsidized by public funds. He is the master of getting public money to develop his products.
- ceejayoz 6y ago
  As a taxpayer, I'm quite pleased with the SpaceX ROI for getting "my" astronauts and satellites up. Especially when you compare what Orion or paying the Russians for a ride to the ISS has cost.
  - mempko 6y ago
    What was the cost we paid to SpaceX to get the Astronauts up? Development + per launch?
    - bryanlarsen 6y ago
      $2.5B for development, and $270M per launch for 4 astronauts. cf. shuttle costs of $1.5B per launch.
deleted 6y ago
[deleted]
partiallypro 6y ago
I don't have a terrible issue with this, it's actually not very much money and could have good benefits that have an economic impact much larger than $886M. I am against wasteful spending, but I believe on an economic/GDP basis this will more than pay for itself in the long run.
spullara 6y ago
Once you buy Starlink does it work from anywhere or does it have to remain where you buy it?
- grecy 6y ago
  Currently the beta is geo-locked to within about 35 miles of there address you signed up for it. Elon has said multiple times it will work perfectly well on a yacht crossing the pacific, a moving train, etc., so we have to assume the "stay in one place" restriction will go away. Country borders will be interesting though, I assume many want to tightly control how you communicate with sats.
  - FrojoS 6y ago
    With the current satellites it can’t work in the middle of the ocean due to a lack of ground stations.
    - grecy 6y ago
      Right, but it will in the future.
- FrojoS 6y ago
  Currently (beta) it only works at the registered address (30mile radius I believe). However, this is certainly not a technological limitation, since SpaceX has demonstrate use in airplanes already.
cprayingmantis 6y ago
I really hope this benefits the area of the country where my parents live. They pay $60 a month for 5M service (from a local Co-op that's the only game in town) which just isn't fast enough for my mom's dream of a work from home job.
techelite 6y ago
Take from the 99.9% give to the 0.001%.
- pensatoio 6y ago
  This is basically the exact opposite of what you describe. The top 1% pay an overwhelming amount of the taxes, and these programs exist to provide broadband everywhere. Not saying I agree with this use of my tax dollars, but reality simply isn’t the way you’re framing it.
  - techelite 6y ago
    Uh... This is false. Do you mean as a percentage of income? Didn't the FCC give AT&T to lay Fiber, that they never did, and customers would be paying for? Elon apologist?
mountainboy 6y ago
Danger, Will Robinson! Years from now when humanity finally wakes up (or worse, does not), let it not be said we were not warned. International Appeal -- Stop 5G on Earth and in Space: https://www.5gspaceappeal.org/ https://www.5gspaceappeal.org/ Podcast -- The Shocking Truth About Electricity & EMFs: https://www.westonaprice.org/podcast/272-the-shocking-truth-about-electricity-emfs-with-arthur-firstenberg/ https://www.westonaprice.org/podcast/272-the-shocking-truth-... Book: "The Invisible Rainbow: A history of electricity and life". Planetary Emergency: https://www.radiationresearch.org/news/planetary-emergency/ https://www.radiationresearch.org/news/planetary-emergency/ Deadly Rainbow: https://www.nationofchange.org/2020/07/07/deadly-rainbow-will-5g-precipitate-the-extinction-of-all-life-on-earth/ https://www.nationofchange.org/2020/07/07/deadly-rainbow-wil... Restoring a Vibrant, Living Planet: https://www.creationsmagazine.com/2020/06/26/restoring-a-vibrant-living-planet-by-arthur-firstenberg-santa-fe-nm/ https://www.creationsmagazine.com/2020/06/26/restoring-a-vib... Satellite Radiation: http://radiationdangers.com/satellite-radiation/ http://radiationdangers.com/satellite-radiation/

288 points by samizdis 6y ago

mtgx 6y ago

Are there any caveats to these subsidies, like allowing the government to tap all Starlink connections for surveillance, etc? I mean the U.S. government already has such deals with other ISPs, and now the U.S. military wants to use Starlink, too, so I wouldn't be surprised if the DoD got involved in this FCC deal with SpaceX for more reasons than one.

lgats 6y ago

SpaceX has been awarded $885.51 million by the Federal Communications Commission to provide Starlink broadband to 642,925 rural homes and businesses in 35 states. That's $1376.52 in subsidies per customer

smithza 6y ago
There is nothing in the article about customers personally benefiting from this. SpaceX could take the money and put it towards ground infr., etc., customers only seeing reduced payments due to NRE/maintenance subsidies. It sounds like SpaceX has quite a bit of autonomy here.
veilrap 6y ago
My initial reaction agrees that does sound quite high. However, I wonder what the alternative strategy costs for rural broadband are. My guess is that laying a lot of cable to remote locations could possibly be even higher than the $1376.52 per customer cost? It seems like something like Satelite internet connections could be less to set up, but it's not clear to me the cost of the equipment, installations and upkeep are in that case? Also 1376 / 12 months averages out to only about $110 per month per customer for just one year. Which honestly doesn't sound too bad.
- myself248 6y ago
  I wonder, what're the costs of providing fixed landline service, even in a city? From burying the lines or stringing them on poles, to wiring up each drop into each dwelling, all the splices and repeaters and what-not, to the central office building and equipment and power and stuff, and maintaining that entire physical plant for years, it's all got to add up. I'd imagine it's well within an order of magnitude.
  - maccam94 6y ago
    Don't forget that the poles are usually owned by an existing power or telecom company, and if they even let you use their poles, you have to pay rent on the pole. Same for conduits. Building new poles and conduits can also be legally difficult and expensive.
- maccam94 6y ago
  The subsidy is spread over 10 years, so they only get $88.5M/year.
baldeagle 6y ago
It is also over 10 years... so maybe a set of free equipment and $8 off a month? Note: a traditional cable company got more than $1B is subsidies, so maybe the distributed model is actually cheaper. Depends on replacement costs and lifecycle (in both cases).
- Tuna-Fish 6y ago
  The subsidy goes to SpaceX, in exchange for offering service at the required locations at the required performance. There is no requirement whatsoever for SpaceX to pass any of it on to the customers, and in fact doing so would be against the spirit of the offering. It's meant for incentivizing the buildout of infrastructure, not for passing on savings to consumers.
deleted 6y ago
[deleted]
leecb 6y ago
That's $11.47 per month, per customer. Slightly over 10% of current pricing. > Funding is distributed over 10 years, so SpaceX's haul will amount to a little over $88.5 million per year.
xoa 6y ago
The beta terminal cost is $500, and beta service is $100/month (at up to ~150 Mbps or so right now?). So the money would cover the terminal cost to those customers and then full freight 8 months of service at current pricing. Alternatively/in addition, and more similarly to traditional in-ground service, it may also simply help fun actual infrastructure in the form of more/faster deployment of ground stations and sats. SpaceX may also (and it seems likely) have more standard service tiers for full general release, so something at 25 Mbps for $25/month say, and then working their way up. If they use this money to cover the minimum tier and then let people choose to pay the difference for more if they desired, then that'd bump the coverage to close to 3 years. For the level of service they're offering that seems pretty reasonable honestly, and a much more efficient use of dollars than typical efforts (though WISPs might do even better in certain areas, they have different trade offs). Since it appears how the companies make use of the money is fairly flexible SpaceX will probably deploy it towards a few different metrics. The $500 upfront capex is probably the biggest impediment for a lot of people so getting that down is important, but if internally they had any issues with getting their sat shells filled out that'd be a good upfront usage too. This is also spread out over 10 years, so where the most bang for buck is delivered will probably vary over time, by 2025 let alone 2030 SpaceX's economics will certainly look quite different with Starship deployment and filled shells/done ground stations.
- jjeaff 6y ago
  I don't believe the subsidies are meant to subsidize the customer. Rather they are subsidizing the upfront capital cost to build out infra. In other words, they get all the money, even if no one subscribes.
  - xoa 6y ago
    From the article: >FCC funding can be used in different ways depending on the type of broadband service. Cable companies like Charter and other wireline providers generally use the money to expand their networks into new areas that don't already have broadband. But with Starlink, SpaceX could theoretically provide service to all of rural America once it has launched enough satellites, even without FCC funding. >One possibility is that SpaceX could use the FCC money to lower prices in the 642,925 funded locations, but the FCC announcement didn't say whether that's what SpaceX will do. SpaceX is still in the painful bootstrapping phase of things, and their cost structure right now is still higher then what they ultimately hope for. But from the sound of it they've got a lot of flexibility in how they deploy this money so long as they ultimately meet service targets, and they're only one player amongst many even for this subsidy money. If they're satisfied with service people don't tend to casually switch providers, so there is real value in being first. I think therefore SpaceX may consider using some of the money at least to lower the bar of someone signing up and try to get currently underserved households onboard as customers faster. Additionally, don't forget this is only the first round, there is even more money available next time. Given the nature of bidding, I assume strategic calculations about how to win more next time will also play a role.
reportingsjr 6y ago
Welcome to the US, where cities are constantly sucked dry of money to pay for people to move in to rural areas and destroy nature. Yay!

davidkuhta 6y ago

For the curious. > The 35 states where SpaceX won FCC funding are Alabama, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and Wyoming.

liquidise 6y ago

This headline is only part of the story, looks like ~10 ISP's were awarded sizable subsidies. While i am not a fan of subsidies in general, the ISP space is particularly tricky for free-market forces to ensure competition. The capital requirements are overwhelming in many cases for a traditional startups, leaving the only other option as local/municipal votes, which have been successful in some areas. Long-term, i could see internet access to receive utility status in the states. Until that happens, funding ISP competition, particularly in rural areas feels like a wise move.

jjeaff 6y ago
It does seem wise, except I believe that ISPs have already received large subsidies in the past and then never completed their end of the bargain. Without consequence, of course. I hope none of those companies received any more subsidy.
- 1996 6y ago
  > never completed their end of the bargain. Without consequence, of course That's exactly why they need more money!! Because, maybe, this time they will? If not, give them a bit more!! Government subsidies at their finest! /s
jseliger 6y ago
I've worked on various broadband-related projects as a grant-writing consultant (https://seliger.com/2009/11/13/adventures-in-the-broadband/ https://seliger.com/2009/11/13/adventures-in-the-broadband/), SpaceX will definitely not be the worst of the bunch and will almost certainly be among the top quarter.
Mountain_Skies 6y ago
My recent employer was one of the ISP providing rural telecom service. These subsidies accounted for a hefty percentage of our income and the company was still perpetually on the edge of failure. Most of our competitors were in similar situations, loaded down with breathtakingly large amounts of debt and expensive to maintain decaying infrastructure, much of it purchased from the Baby Bells when they got out of the market. I can't say that the company was particularly well run but am certain that without the government subsidies, the business would collapse and large numbers of rural customers would be without telecom services, which extend beyond just internet access. Not sure what Starlink's existence is going to do to the company. Offering 25 Mbps aDSL with low reliability isn't going to compete very well if a customer can get 100 Mbsp service for a similar price and higher reliability. On the other hand, this might be justification the company can use to stop servicing the most expensive of the rural accounts to service while focusing on small town gigabit service that can compete with a reasonable expense to service.

juanbyrge 6y ago

If there is any corporate entity I'd happy giving public funding, it would be SpaceX. Their end goal is to settle Mars and potentially other bodies in the solar system. Compared with the absurd amounts of money wasted on defense contractors, I am perfectly happy with funding SpaceX in every way possible.

sneak 6y ago
SpaceX is also a defense contractor. https://spaceflightnow.com/2020/10/05/nro-reveals-plans-for-previously-undisclosed-launch-with-spacex-this-month/ https://spaceflightnow.com/2020/10/05/nro-reveals-plans-for-...
- remarkEon 6y ago
  Good. They seem to be the first defense contractor in a long time, maybe ever, with a specific eye on controlling costs. It may not be this way forever, but for now the taxpayers should get the savings where they can.
  - vsareto 6y ago
    Maybe they can relax the work/life balance now
    - tF73d78kq8t3R6n 6y ago
      That’d cause their costs to skyrocket.
    - JumpCrisscross 6y ago
      > Maybe they can relax the work/life balance now Nobody should feel forced to work more than they want to. (The abjectly lazy aside.) But we should also be free to work as hard as we want. And to freely associate with those with similar preferences. I used to love burning both ends of the candle. It was invigorating. I didn't ruin my health for it. And it gave me life lessons I could not have learned any other way. The fruits of those years, as well as finding other interests, nudged me to a different preference. Which involved new (or changed) colleagues. I don't see why, to be satisfied with one arrangement, we must denigrate the other--they're just different solutions. Work and life don't balance on a scale. The dynamic is more like homeostasis. One's stable ratio depends on a variety factors, extrinsic and from within, and what makes one person happy will be ruinous or lethargic for another.

ogre_codes 6y ago

The government has been subsidizing rural ISPs for quite a while. This effort is much more reasonable than many similar efforts because unlike many of the people sucking up these subsidies, it actually reaches everyone. Most of the carriers who accepted subsidies to increase rural internet access just picked the low hanging fruit and often introduced new service in regions which were already covered by other services. My old house was stuck on 10GB service for years while ISPs bumped up subsidized service to many closer in/ semi rural areas. I have good access now, but just a few years ago I'd have loved the option of getting SpaceX's service at full price.

tzm 6y ago

I live in the Mission hills of SF Bay and pay $600 / mo for internet via mobile hotspot (LTE). HughesNet is terrible. Nothing else is available. I can't wait for Starlink beta!

politelemon 6y ago
> $600 / mo for internet via mobile hotspot (LTE). I'm not familiar with that area but my mind boggles at this amount. What kind of speeds do you get? Are that ISP able to offer a cheaper deal of some sort, eg 12 months? Why is it so much!? Wishing you well, I hope you get Starlink soon in your area, or any alternatives.
- tw04 6y ago
  I would assume it's so expensive due to data usage. Anything over LTE I've seen has ridiculously low data caps. I think as part of this funding the FCC should have a mandatory requirement of no data caps, or a cap of something more reasonable like 10TB a month that increases 5TB every X number years.
  - google234123 6y ago
    1TB sounds more reasonable than 10. 10 is way over the top
    - tw04 6y ago
      I assume you don't have kids stuck at home during covid. I have friends that are burning through 1TB of data a month like it's nothing. Between zoom/webex meetings all day for everyone in the family, and netflix in the evenings because they can't really go play with other friends, 1TB is a joke. Heck, Cyberpunk 2077 is a 70GB download ALONE - that's 7% of your cap gone from you or your kid installing one game.
      - google234123 6y ago
        That game will provide you plenty of content for that data. Anyway, just because a few people use ~1TB of data doesn't mean every LTE plan should provide 10TB. You are asking for a 500x increase in the typical LTE data plan.

iptrans 6y ago

Riddle me this, would SpaceX not have built out Starlink if they didn't get this subsidy? Since they already put Starlink satellites in orbit without any guarantees of subsidies, was this good use of government funds?

rictic 6y ago
Two more questions: Can the subsidy be used to accelerate making the service available to more users sooner, and at higher quality? Most likely yes, because with the design of Starlink, more satellites gives better service. A related question: Were early subsidies into solar power a big help in climbing the learning curve while solar power had uncompetitive performance/$, or did advancements in related disciplines like chip manufacturing carry most of the weight?
- aaronblohowiak 6y ago
  Why should rural lifestyle be subsidized ?
  - baq 6y ago
    Because dense urban is unsustainable without sparse rural providing food?
  - giantg2 6y ago
    Why should any lifestyle be subsidized? Subsidies happen for rural and urban individuals.
  - stetrain 6y ago
    Because not everyone has full freedom in deciding where to live, and access to broadband is a positive factor for financial mobility and economic activity.
  - serf 6y ago
    (playing devils' advocate) City/population-center living is wildly inefficient for a host of reasons, and a dollar of urban development towards a major metropolis goes much less far than a dollar of urban development for a rural community. We deal with the inadequacies of living in such big population dense areas because we want to; not because it's efficient. Turns out it's not efficient to stack up as many people vertically as possible. It over-burdens local municipal systems to the point of skyrocketing economic costs, creates more job scarcity due to sheer population and high real-estate costs, and creates untenable situations during times where population density is a net-negative, like during a pandemic. Rural living has major problems too; lack of access to high quality services and travel come to mind -- but these are things that can be improved upon, and by every metric these things are improving. There is no such game-plan for dealing with the burdens of heavy density populations mid-city; it's considered to be a fact of life.

elihu 6y ago

I read a theory once that one of the reasons why so many Boomers were able to buy land or houses cheaply that later appreciated substantially in value was the interstate highway system built during WWII. Suddenly, a lot of real estate was in easy driving range of employers, and so there was a period of over-supply of highly desirable real estate. I wonder if Starlink (and changes in work expectations due to the pandemic) will have a similar effect; a lot of rural land that people might have been inclined to move to if only they had some way to do their work remotely is now suddenly a realistic option.

pkaye 6y ago
What percent of workers do work that can be done remotely?
- oedoedxef 6y ago
  Currently, or 5 years from now? Anyone working in the "services" industry, which is most of the United States, can work from home. And if the laws ever change for restaurants and auto-repair shops, I suspect you might see that being done from home as well.
  - 0xffff2 6y ago
    What kind of restaurant job do you see being done from home?
    - elihu 6y ago
      I'd guess that user oedoedxef is referring to running a customer-facing business (a diner, an auto repair shop, or whatever) out of a primary residence, whether that means living in a commercially-zoned property or doing commerce in a residentially-zoned property or perhaps eliminating the distinction entirely.
      - 0xffff2 6y ago
        That's my guess as well, but that's a very, very strange definition of working from home.

grecy 6y ago

For fun, highest to lowest: Etheric: $3,857/home CentryLink: $3,396/home Frontier: $2,916/home Windstream: $2,715/home LTD Broadband: $2,500/home Connect Everyone: $2,484/home Resound: $2,443/home AMG: $2,082/home GeoLinks: $1,831/home Rural Electric: $1,779/home SpaceX: $1,377/home Comcast: $1,151/home Even just 5 years ago who would have guessed satellite internet would be the cheapest... EDIT: Sorry for the ordering mistake - Comcast are "cheapest", SpaceX 2nd.

ars 6y ago
In your table Comcast ($1,151) is cheaper than SpaceX ($1,377).
kevin_thibedeau 6y ago
Subsidies for Frontier are pretty galling. I have an urban home in their original core market and they wouldn't bother fixing a phone line that went from 4Mb to 2Mb after switching to a new pair when the original went bad. They are pocketing everything and disinvesting in their wires.
bryanlarsen 6y ago
Most of the others are providing gigabit versus Starlink's 100Mbit.
- wmf 6y ago
  Gigabit at ~$3,000 seems like a bad tradeoff compared to 100 Mbps for $1,377.

ccorda 6y ago

This was a reverse auction, where the goal was to minimze cost to government to get high speed internet in rural areas. Starlink bid in the Above Baseline tier, meaning ≥ 100/20 Mbps (with data cap of ≥ 2 TB). According to the FCC [1], 99.7% of locations are at that tier or higher, and 85%+ in the highest Gigabit (1000/500) tier. So it looks like the auction funded gigabit where there was a provider bidding at that tier, and the rest went heavily to SpaceX. One question I have is whether these gigabit deployments actually happen, or if Starlink will pick off legacy business so quickly (full launch nationwide next year) such that rural providers aren't able to take the subsidies and actually implement the new offerings. [1] https://mobile.twitter.com/matthewberryfcc/status/1335978529457115143 https://mobile.twitter.com/matthewberryfcc/status/1335978529...

madamelic 6y ago
>One question I have is whether these gigabit deployments actually happen, No. Every time the US gives money to telecoms to roll out fiber, the telecoms play a shell game and disappear the money or use it to fight against municipalities that try to build their own infrastructure. https://nationaleconomicseditorial.com/2017/11/27/americans-fiber-optic-internet/ https://nationaleconomicseditorial.com/2017/11/27/americans-...
- myself248 6y ago
  Thank you for that link. I remember the disappearance of the Project Pronto money in the 90s, and it's bothered me ever since. It's nice to know I didn't dream the whole thing.
- mtalantikite 6y ago
  Verizon signed a contract with NYC in 2008 to pull fiber to New Yorkers by 2014 and I still can't get fiber here in Williamsburg, Brooklyn. At this point I've really given up hope that I'll ever get fiber into the home on a reasonable time scale.
  - grecy 6y ago
    In such a litigious society it's amazing Verizon can't be held to account for this, and at the very least be forced to pay back the money.

nikolay 6y ago

Elon Musk is no Iron Man. All his companies are built with taxpayer money. When did I sign up to be irradiated by his satellites?!

stetrain 6y ago
Those darn radio waves! Hold on I gotta take this call on my iPhone.
- nikolay 6y ago
  Well, I may want to go to a refuge without any electronics.
  - AveryEm 6y ago
    What are satellites up in orbit stopping you from not using electronics?
    - nikolay 6y ago
      I mean, a refuge w/o radio pollution, including that from my own devices.
  - stetrain 6y ago
    If you find a spot on Earth with no radio waves let us know. AM goes pretty far, even amateur radio can travel across continents in the right atmospheric conditions. GPS Satellite TV Every other civilian and military Comsat since we started launching things. Starlink isn’t the problem if you are worried about being “irradiated”, the nuclear fusion reactor at the center of our solar system is likely of greater concern.
    - nikolay 6y ago
      GPS and Satellite TV are different, plus, your way of thinking is flawed - just because there are precedents, it doesn't mean we should continue to add on top of them! In addition to light pollution, radio pollution is worse than ever. After Starlink setting a brew type of precedent, more will try doing the same.

mempko 6y ago

All of Musk's endeavors are subsidized by public funds. He is the master of getting public money to develop his products.

ceejayoz 6y ago
As a taxpayer, I'm quite pleased with the SpaceX ROI for getting "my" astronauts and satellites up. Especially when you compare what Orion or paying the Russians for a ride to the ISS has cost.
- mempko 6y ago
  What was the cost we paid to SpaceX to get the Astronauts up? Development + per launch?
  - bryanlarsen 6y ago
    $2.5B for development, and $270M per launch for 4 astronauts. cf. shuttle costs of $1.5B per launch.

deleted 6y ago

[deleted]

partiallypro 6y ago

I don't have a terrible issue with this, it's actually not very much money and could have good benefits that have an economic impact much larger than $886M. I am against wasteful spending, but I believe on an economic/GDP basis this will more than pay for itself in the long run.

spullara 6y ago

Once you buy Starlink does it work from anywhere or does it have to remain where you buy it?

grecy 6y ago
Currently the beta is geo-locked to within about 35 miles of there address you signed up for it. Elon has said multiple times it will work perfectly well on a yacht crossing the pacific, a moving train, etc., so we have to assume the "stay in one place" restriction will go away. Country borders will be interesting though, I assume many want to tightly control how you communicate with sats.
- FrojoS 6y ago
  With the current satellites it can’t work in the middle of the ocean due to a lack of ground stations.
  - grecy 6y ago
    Right, but it will in the future.
FrojoS 6y ago
Currently (beta) it only works at the registered address (30mile radius I believe). However, this is certainly not a technological limitation, since SpaceX has demonstrate use in airplanes already.

cprayingmantis 6y ago

I really hope this benefits the area of the country where my parents live. They pay $60 a month for 5M service (from a local Co-op that's the only game in town) which just isn't fast enough for my mom's dream of a work from home job.

techelite 6y ago

Take from the 99.9% give to the 0.001%.

pensatoio 6y ago
This is basically the exact opposite of what you describe. The top 1% pay an overwhelming amount of the taxes, and these programs exist to provide broadband everywhere. Not saying I agree with this use of my tax dollars, but reality simply isn’t the way you’re framing it.
- techelite 6y ago
  Uh... This is false. Do you mean as a percentage of income? Didn't the FCC give AT&T to lay Fiber, that they never did, and customers would be paying for? Elon apologist?

mountainboy 6y ago

Danger, Will Robinson! Years from now when humanity finally wakes up (or worse, does not), let it not be said we were not warned. International Appeal -- Stop 5G on Earth and in Space: https://www.5gspaceappeal.org/ https://www.5gspaceappeal.org/ Podcast -- The Shocking Truth About Electricity & EMFs: https://www.westonaprice.org/podcast/272-the-shocking-truth-about-electricity-emfs-with-arthur-firstenberg/ https://www.westonaprice.org/podcast/272-the-shocking-truth-... Book: "The Invisible Rainbow: A history of electricity and life". Planetary Emergency: https://www.radiationresearch.org/news/planetary-emergency/ https://www.radiationresearch.org/news/planetary-emergency/ Deadly Rainbow: https://www.nationofchange.org/2020/07/07/deadly-rainbow-will-5g-precipitate-the-extinction-of-all-life-on-earth/ https://www.nationofchange.org/2020/07/07/deadly-rainbow-wil... Restoring a Vibrant, Living Planet: https://www.creationsmagazine.com/2020/06/26/restoring-a-vibrant-living-planet-by-arthur-firstenberg-santa-fe-nm/ https://www.creationsmagazine.com/2020/06/26/restoring-a-vib... Satellite Radiation: http://radiationdangers.com/satellite-radiation/ http://radiationdangers.com/satellite-radiation/