Topline
President Biden announced an $82 million investment in high speed internet in rural North Carolina, drawing criticism from SpaceX CEO Elon Musk, who recently lost a nearly $900 million U.S. contract to provide internet service through Starlink.
Key Facts
The Biden administration’s announcement on Friday drew heavy criticism from FCC Commissioner Brendan Carr, a Republican appointed by President Trump, who noted the new investment cost $5,125 per location—compared to an estimated lower cost of $1,377 per household the government would have spent if they renewed SpaceX’s subsidies from the Rural Digital Opportunity Fund.
However, Starlink also requires expensive satellite equipment that starts at $599, and will require upgrades in the future, according to the company’s specifications.
Discussing the new investment at an event in Raleigh, Biden said that “fiber-optic cable is being laid in the ground as we speak,” which would not require the equipment investment Starlink needs to function.
Musk jumped on Carr’s criticism, calling the Biden administration’s decision “insane” and noting Starlink’s bandwidth capabilities “exceed” the FCC’s definition of high speed broadband.
Big Number
$885,509,638.40. That’s the total amount in subsidies SpaceX was awarded in 2020 after a “short-form” application to access subsidies from the Rural Digital Opportunity Fund. The company’s original bid would have brought high speed internet to 642,925 locations in 35 states. This is how Carr estimated the per household cost of Starlink in the North Carolina homes. It is unclear through public records if North Carolina was one of the states SpaceX had bid to work on. SpaceX has not returned a request for comment from Forbes.
Chief Critic
Tyler Cooper, the editor-in-chief of BroadbandNow, an independent research organization that compares internet providers for consumers, told Forbes that the spat between Starlink and the government was “missing the forest for the trees,” as no one single internet provider will be able provide service for all of North Carolina, let alone other rural parts of the country currently lagging in internet access. “The fact is, fiber internet is the only technology we know of today that is capable of meeting the projected bandwidth requirements of the nation 10+ years from now,” Cooper told Forbes in an email. “It’s the only connectivity poised to fully support nascent technologies like AR/VR, smart cities, distributed local AI, and more, making the deployment of that infrastructure vital to our future.” Cooper said Starlink was still a “fantastic option” for rural America, but said federal funding should always prioritize investment in fiber.
Key Background
SpaceX’s contract with the federal government was formally rejected in December, two years after their “short-form” application was accepted. According to the FCC, the company was unable to meet program requirements for funding. Carr issued a dissent on the decision in December, alleging the FCC only canceled the contract after President Biden “gave federal agencies a greenlight to go after” Elon Musk in November 2022, after he purchased Twitter. Carr also insisted the cancellation will cost the government a “magnitude more money” to provide rural areas with high speed internet. “Extending high-speed fiber lines to these same areas will likely cost somewhere in the neighborhood of $3 billion based on past bidding patterns and analysis—more once you start accounting for inflation,” Carr wrote in his dissent. The White House has not commented on the FCC decision in December.
Tangent
Biden’s announcement on Friday was only a small part of the President’s rural internet plan, which is intended to increase high speed internet access for millions in rural areas across the country. The 16,000 homes announced on Friday is only the most recent expansion of the Affordable Connectivity Plan, which has already brought an estimated $440 million in savings to over 880,000 households in North Carolina, according to the White House. At a fundraiser in Raleigh, Biden said the fiber-optic cable being installed in North Carolina will be manufactured at home, coming from two factories operated by Corning and CommScope in the city of Hickory. The companies promised to invest over $550 million in North Carolina, bringing another 650 manufacturing jobs back to the state.
Further Reading
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Tyler Fields is your internet guru, delving into the latest trends, developments, and issues shaping the online world. With a focus on internet culture, cybersecurity, and emerging technologies, Tyler keeps readers informed about the dynamic landscape of the internet and its impact on our digital lives.
