Regional ISPs Are Skeptical That SpaceX’s Starlink Can Deliver On Its Internet Promises

A SpaceX rocket carrying Starlink satellites a few seconds after launch on June 3, 2020.

A SpaceX rocket carrying Starlink satellites a few seconds after launch on June 3, 2020.
Photo: SpaceX

Some regional internet service providers are urging the FCC to reexamine the recent rural broadband auction process that awarded unproven companies like SpaceX’s Starlink hundreds of millions of dollars to provide reliable broadband access to people in rural areas of the U.S.

Following last week’s call from members of Congress to properly vet Rural Digital Opportunity Fund (RDOF) auction winners’ ability to actually provide internet in the areas they promised, several rural electric co-op trade group leaders are continuing to put pressure on the FCC. Some of these electric co-ops provide both electricity and internet service to the area that they serve.

The trade group leaders today expressed concern about the RDOF bidding processes, exposing potential flaws in how the bidding process itself works and why it’s so important that federal dollars go toward ISPs who can actually roll out broadband services in areas they promise to.

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“Some of the largest winners in this RDOF auction prevailed despite submitting bids that use unproven technologies to accomplish the goal of connecting rural communities. That is troubling,” Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA), said during a Thursday call with press. “We’re here to call for [the FCC] to…make sure that [ISPs] are not at risk of not being able to deliver on the promises.”

According to Matheson, a number of RDOF bidders in the higher speed categories, like gigabit, bid into those categories with technologies that have not been proven to meet those speeds. SpaceX’s Starlink, for example, bid into the 100/20 Mbps category even though its network is still in beta testing, and won $885 million to deliver internet to rural communities.

National Rural Telecommunications Cooperative CEO Tim Bryan said his electric co-op has heard anecdotal evidence that not all Starlink beta customers are getting great service. Some can’t even maintain a 4 Mbps connection, which is nowhere near the FCC-defined broadband minimum of 25/3 Mbps.

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Midwest Energy & Communications, which has been around since 1980s, used to provide geostationary satellite service to its customers. But according to President and CEO Bob Hance, the co-op quickly moved to a wired broadband solution once it became apparent that “broadband service using satellites could not and would not live up to its promise.” In 2014, MEC started moving toward offering fiber broadband services incorporated with its smart grid efforts. Today, MEC has 2,400 miles of fiber lines providing service to over 15,000 customers, starting at 50 Mbps and going up to symmetrical gigabit speeds.

“Like many others, MEC contends that the blocks were lost to other bidders that cannot and will not be able to deliver the service level claimed in the tier they bid,” Hance said. “MEC further contends that it seems possible that some blocks were bid down for less than ethical reasons.”

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Hance said that the residents of the 30 census blocks MEC lost to other bidders will likely receive inferior service from other ISPs for the next several years.

On Feb. 1, the NRECA wrote to the FCC, asking the agency to undertake a “comprehensive review of the detailed business plans and technical showings in the long-form applications submitted by winning bidders proposing Gigabit tier fixed wireless and hybrid fixed wireless solutions.” The NRECA is also advocating for an in-depth review of winning bidders who proposed low-earth-orbit satellites bidding at the 100/20 Mbps tier, like SpaceX’s Starlink.

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“We’re using the public’s money in the RDOF auction, and it’s designed to be a deployment program for proven technologies, not a research and development experiment for technology that may or not be capable of connecting millions of rural Americans,” Matheson said.

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When ISPs like CenturyLink and Frontier repeatedly fail to meet FCC-mandated broadband rollout deadlines, rural electric co-ops and other small internet providers begin seriously questioning the effectiveness of the RDOF bidding processes. There are clearly some holes in the process, but it remains to be seen if the FCC’s new head, Acting Chairwoman Jessica Rosenworcel, will properly vet every RDOF auction winner to ensure federal funds are being used the way they should be: to close America’s widening digital divide.

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