SpaceX Will Compete in FCC Auction for $16 Billion in Funding

wagnerap

SpaceX will be able to compete in the FCC's auction for $16 billion in funding for global satellite networking.

SpaceX is making strides as it attempts to secure FCC funding for its global satellite internet broadband business, according to the Motley Fool.

SpaceX has launched nine batches of "Starlink," and now has around 540 satellites in orbit around Earth. Elon Musk is attempting to put 800 satellites in Earth orbit to deliver moderate internet coverage around the globe. SpaceX's official goal is to put 42,000 satellites in orbit, but this is a start. Once 800 are in orbit, it will prove that the satellite internet system works.

This is important to SpaceX for two reasons. The first is because the company expects the revenue from Starlink will outpace the revenue it receives from launching other satellites. Estimates show that as early as next year satellite internet service could comprise more than 50 percent of total SpaceX revenue. By 2025, the company expects to get 85 percent of its money from internet service. Second, SpaceX hopes to win part of a $16 billion Rural Digital Opportunity Fund (RDOF) that will be distributed by the Federal Communications Commission.

The RDOF attempts to bring internet service to unserved rural areas of America. Comcast, CenturyLink, and Amazon.com's Project Kuiper are also competing for funding. The FCC plans to distribute the funds over 10 years to the winners of the auction.

The FCC has doubts about SpaceX's ability to offer low-latency service. SpaceX has stated that its internet service won't have as much lag as competitors since its satellites orbit closer to Earth. In a statement, FCC Chairman Ajit Pai promised he would apply "very close scrutiny" to SpaceX's claims, and said the FCC will not allocate money "to fund untested technologies." However, he stated, "LEO service providers [such as SpaceX can] apply to bid in the low-latency tier instead of limiting them to the high-latency tier." SpaceX will be able to compete in the auction.

SpaceX needs to get more satellites in orbit so that the company is able to display the results of Starlink at the auction. The company plans to begin beta testing of the Starlink network "later this summer, followed by public beta testing" later this year. The auction is scheduled to begin October 29, so if everything remains on schedule SpaceX should have no issue.

View the Full Story Here.

Comments

Economics, Finance and Investing

FEATURED
COMMUNITY