SoylentNews is people
SoylentNews
SpaceX Won "rural" FCC Funding in Surprising Places, Like Major Airports
FCC Chairman Ajit Pai is "subsidiz[ing] broadband for the rich," according to the title of an analysis last week by Derek Turner, research director at advocacy group Free Press. Turner has a strong track record analyzing FCC broadband data and last year found major errors in Pai's broadband-deployment claims.
[...] SpaceX CEO Elon Musk has said Starlink is targeted at rural areas and "will serve the hardest-to-serve customers that telcos otherwise have trouble" reaching. While SpaceX did get FCC funding for plenty of rural areas, it also won "the right to serve a large number of very urban areas that the FCC's broken system deemed eligible for awards," Turner wrote. For example, Turner wrote that SpaceX won broadband subsidies in locations at or adjacent to major airports in Atlanta, Chicago, Denver, New York City, Seattle, Las Vegas, Newark, Miami, Boston, Minneapolis-Saint Paul, Fort Lauderdale-Hollywood, Detroit, and Philadelphia.
[...] The RDOF[*] and other universal service programs run by the FCC are paid for by Americans through fees imposed on phone bills. According to rules set by the FCC, the entire $9.2 billion must fund deployment only in census blocks where no ISPs report offering service with at least 25Mbps download and 3Mbps upload speeds.
But census blocks are small, and blocks that are counted as unserved "may be surrounded on all sides by fiber," Turner told Ars via email. "That's because of an important design flaw in the FCC's mapping system: ISPs are [required] to report the blocks where they currently offer service or could without extraordinary use of resources within a 10-day period. Thus a block can show up as 'unserved' even though it isn't any more expensive than any typical block to serve; it just means an ISP didn't claim the block."
SpaceX "appears to have played by the rules. But the FCC's rules created a broken system," Turner wrote in his post on the Free Press site. "By bidding for subsidies assigned to dense urban areas, Musk's firm and others were able to get potentially hundreds of millions in subsidies meant for people and businesses in rural areas that would never see broadband deployment without the government's help."
RDOF - Rural Digital Opportunity Fund
(Score: 3, Funny) by DannyB on Thursday December 17 2020, @04:13PM (4 children)
I think the plan is to make it up in volume.
Sell enough of them, the losses get big enough to wrap around into big positive numbers.
Young people won't believe you if you say you used to get Netflix by US Postal Mail.
(Score: 3, Interesting) by stormreaver on Thursday December 17 2020, @05:40PM (2 children)
Joking aside, the obvious business plan involves acquiring the customer with an initial loss. Then charge the customer a monthly fee that is greater than the unit cost to operate the service. The initial loss will turn into a profit in some acceptable time frame. There may even be some sliding loss windows, but the aggregate will be a nice profit.
(Score: 3, Interesting) by DannyB on Thursday December 17 2020, @05:48PM (1 child)
I seem to recall cell phones working that way about twenty years ago.
Young people won't believe you if you say you used to get Netflix by US Postal Mail.
(Score: 0) by Anonymous Coward on Friday December 18 2020, @06:37PM
Any cellphone contract that includes a 'free' phone works that way, even now.
(Score: 2) by krishnoid on Thursday December 17 2020, @08:07PM
And with Christmas coming up, there's also time to provide improved incentives to buy them [giantitp.com].