FCC announces billions of dollars to provide rural areas with broadband access

The Federal Communications Commission on Monday awarded $9.2 billion in funding to help companies provide broadband internet service to millions of Americans without access to reliable service.

FCC Chairman Ajit Pai called the awards the “single largest step ever taken to bridge the digital divide.”

Among the big winners was Elon Musk’s SpaceX, which has been launching dozens of satellites at a time in an attempt to build a massive constellation in space that would help serve remote or rural areas. The company won $886 million from the FCC to help serve hundreds of thousands of customers in 35 states, a huge boost in its quest to pull off a feat even Musk has said had a high likelihood of failure.

The company has launched nearly 1,000 satellites as part of its Starlink constellation and has begun a pilot program in the northern United States and southern Canada that it calls “Better Than Nothing.”

The company has approval to launch some 12,000 satellites, and as the number increases, so will the reliability and speed of its service, the company has said. It plans to expand its beta service by early next year, “rapidly expanding to near global coverage of the populated world by 2021,” according to its website.

The funding gives SpaceX an even bigger lead over its competitors in the race to build the internet in space. Recently, OneWeb emerged from bankruptcy and appointed a new CEO. Jeff Bezos’s Amazon also intends to flood Earth’s orbit with its own satellites in a project it calls Kuiper that it has said would bring broadband to “unserved and underserved communities around the world.” (Bezos owns The Washington Post.)

In a statement, Pai said the awards would bring “welcome news to millions of unconnected rural Americans who for too long have been on the wrong side of the digital divide. They now stand to gain access to high-speed, high-quality broadband service.”

The announcement comes as Democrats and President-elect Joe Biden are pushing to increase funding for internet spending next year and help connect families and businesses that have been especially hurt during the coronavirus pandemic.

Biden has endorsed a relief bill that passed the House that included $4 billion for low-income Americans struggling to access the internet for work or school.

Rep. James Clyburn, D-S.C., who led a broadband task force, has said that he expected the issue to be one of the top priorities for the incoming administration and that Congress would act.

“Broadband in this century must be treated as electricity was in the 20th century,” he said.

The biggest winners of the FCC’s awards, which would be given out over 10 years, were LTD Broadband, Charter Communications and the Rural Electric Cooperative Consortium, each winning a little over $1 billion.

SpaceX finished near the top with a massive infusion of cash that could provide the financial underpinning its Starlink project needs. In the past, several companies tried and failed. Teledesic, a company founded by Bill Gates in the mid-1990s, collapsed after costs soared. Attempts by Iridium and Globalstar ended up in bankruptcy.

SpaceX has the advantage that it can launch its own satellites. And by using reusable rockets, the cost has come down dramatically.

Its most recent launch of 60 Starlink satellites last month, for example, was the seventh time that that particular Falcon 9 rocket had been used, a record.

Still, Musk has said he knows the difficulty in what he is trying to achieve, and in a call with reporters last year he said: “I do believe we will be successful, but it is far from a sure thing.”