SpaceX Asks FCC To Wind Down $4.5bn Rural Broadband Support

SpaceX has asked the Federal Communications Commission to wind down roughly $4.5 billion a year in rural broadband support, arguing that Starlink and other low-Earth-orbit satellite networks have made the agency's High-Cost program obsolete.

Light Reading reported that the filing landed in the FCC's proceeding to modernize High-Cost, a Universal Service Fund program that subsidizes rural network deployment and maintenance through mechanisms including the Connect America Fund, the Alaska Plan and the Rural Digital Opportunity Fund.

The FCC approved its notice of proposed rulemaking in May, initial comments were due on August 4, and reply comments are due on September 3.

SpaceX wants the FCC to "wind down and sunset" High-Cost support on the grounds that the subsidies were created for an earlier market failure and now support legacy providers in areas where unsubsidized competition exists.

In its filing, the company said high-speed, low-latency broadband is available nationwide through next-generation satellite networks, with Starlink serving millions of Americans and Amazon Leo and other operators expected to add more LEO competition.

The company also urged the FCC to redirect resources toward Lifeline, the USF affordability program that the agency is separately considering making harder to access.

SpaceX said Lifeline receives roughly one-fifth as much funding as High-Cost programs, framing the proposal as both a market-competition issue and a consumer-affordability issue.

Rural broadband groups rejected the idea that satellite availability should make an area count as served.

NTCA-The Rural Broadband Association said no LEO operator can meet Section 254 universal service standards because current providers do not offer voice service, have not shown real-world capacity to serve all locations simultaneously at substantial adoption levels, and do not show consistent public speed-test performance at the median speeds Americans subscribe to today.

The National Rural Electric Cooperative Association said the FCC should not let existing LEO satellite access pre-empt High-Cost support for terrestrial networks offering symmetrical service of 100 Mbps or better and scalable capacity for future demand.

USTelecom also defended continued fiber support, arguing that terrestrial fiber remains the stronger long-term rural option on capacity, latency, reliability and economic benefit, while LEO satellite plays a complementary role in the most remote locations.

USTelecom asked the FCC to extend existing High-Cost programs through 2030 and avoid permanent policy decisions until the results of federal and private broadband investments are clearer.

New Street Research analyst Blair Levin, a former FCC official, wrote in June that SpaceX's advocacy under the current Trump administration has been largely successful, but he doubted Chairman Brendan Carr would move to eliminate all High-Cost programs without clearance from Republican congressional leadership.

Levin still saw a material chance that the FCC could reduce High-Cost spending before the end of the current administration, a shift that could benefit major carrier net payers while hurting rural telephone companies that rely on the fund.