SpaceX wins FCC funding battle but must prove it can deliver low latencies.
The Federal Communications Commission has reversed course on whether to let SpaceX and other satellite providers apply for rural-broadband funding as low-latency providers. But Chairman Ajit Pai said companies like SpaceX will have to prove they can offer low latencies, as the FCC does not plan to “fund untested technologies.”
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Pai’s original proposal classified SpaceX and all other satellite operators as high-latency providers for funding distribution, saying the companies haven’t proven they can deliver latencies below the FCC standard of 100ms. Pai’s plan to shut satellite companies out of the low-latency category would have put them at a disadvantage in a reverse auction that will distribute $16 billion from the Rural Digital Opportunity Fund (RDOF).
But SpaceX is launching low-Earth-orbit (LEO) satellites in altitudes ranging from 540km to 570km, a fraction of the 35,000km used with geostationary satellites, providing much lower latency than traditional satellite service. SpaceX told the FCC that its Starlink service would quickly clear the 100ms cutoff, and FCC Commissioner Michael O’Reilly urged Pai to let LEO companies apply in the low-latency tier.
The FCC voted to approve the updated auction rules yesterday. The final order isn’t public yet, but it’s clear from statements by Pai and other commissioners that SpaceX and other LEO companies will be allowed to apply in the low-latency tier. The satellite companies won’t gain automatic entry into the low-latency tier, but they will be given a chance to prove that they can deliver latencies below 100ms.
“I am grateful to the chairman for agreeing to expand eligibility for the low-latency performance tier and change language prejudicial to certain providers,” O’Reilly said at yesterday’s FCC meeting. “While a technology-neutral policy across the board may have been more effective in promoting innovation and maximizing the value of ratepayer investments, I recognize that a balancing act was necessary to reach the current disposition.”
Pai: FCC will apply “very close scrutiny.”
Pai said he agreed to the change “at the request of one of my fellow commissioners.” The final rules “don’t entirely close the door on low-Earth orbit satellite providers bidding in the low-latency tier,” Pai continued. “However, it is also important to keep in mind the following point: The purpose of the Rural Digital Opportunity Fund is to ensure that Americans have broadband access, no matter where they live. It is not a technology incubator to fund untested technologies. And we will not allow taxpayer funding to be wasted. New technology may sound good in theory and look great on paper. But this multi-billion-dollar broadband program will require ‘t’s to be crossed—not fingers. So any such application will be given very close scrutiny.”
When contacted by Ars today, Pai’s office confirmed that “the commission modified the draft to permit LEO service providers to apply to bid in the low-latency tier instead of limiting them to the high-latency tier, and staff will be closely reviewing all applications to ensure they can meet the FCC’s performance requirements for service providers.”
SpaceX aims to provide service later this year, and CEO Elon Musk has said the company is aiming for latency below 20ms.
Commissioner Geoffrey Starks supported the low-latency change in his statement:
I appreciate Commissioner O’Rielly’s work in revising this Public Notice to eliminate the categorical bar on low-Earth orbit satellite systems bidding in the low-latency tier, especially now that we have evidence in the record that those systems can meet the 100-millisecond latency standard. At the same time, I see no need for the Public Notice’s predictive judgments about the merits of short-form applications from low-Earth orbit satellite operators. As I have stated previously, next-generation satellite broadband holds tremendous technological promise for addressing the digital divide and is led by strong American companies with a lengthy record of success. Commission staff should evaluate those applications on their own merits.
Pai and O’Rielly are Republicans, while Starks is part of the FCC’s Democratic minority.
SpaceX was excluded from the gigabit tier.
The $16 billion in phone and broadband subsidies will be distributed in a reverse auction scheduled to begin on October 29. ISPs can seek funding in census blocks where no provider offers home-Internet speeds of at least 25Mbps downstream and 3Mbps upstream. The $16 billion will be distributed over 10 years, so ISPs that get funded will collect about $1.6 billion a year and face requirements to deploy broadband service to a certain number of homes and businesses.
Pai’s auction rules also shut SpaceX and other satellite operators out of applying for funding in the gigabit tier. SpaceX could still apply for financing in the 100Mbps-and-below categories, but the auction will prioritize applications in the gigabit category. SpaceX has said in the past that it would offer gigabit speeds, but the company seems to have only objected to the latency restriction.
The commissioners’ statements did not mention any change to the policy excluding all satellite providers from the gigabit tier. The gigabit tier requires 1Gbps download speeds and 500Mbps upload speeds, which may restrict the category primarily to fiber-to-the-home providers or cable companies that adopt full-duplex DOCSIS technology.
Pai said the FCC is allowing fixed-wireless and DSL providers to apply in the gigabit tier but noted that “commission staff will conduct a careful, case-by-case review of applications to ensure that bidders will be able to meet required performance obligations.” There’s still no allowance for LEO-satellite providers to bid in the gigabit tier.
Technology neutrality
O’Reilly said he wanted the FCC to let all types of providers apply for all speed tiers, with the requirement that they demonstrate their ability to deliver those speeds:
One of the key principles that I have sought to advance, in both the auction context and elsewhere, is the concept of technology neutrality… in the auction context, it involves crafting rules that offer a fair shot to innovators across all sectors and don’t unduly tilt the playing field toward particular providers. Therefore, I would have preferred an auction design without up-front technology restrictions; all interested providers should have the opportunity to demonstrate whether they can meet our speed and latency benchmarks at the short-form application stage. After all, the whole point of the auction is to support the deployment of broadband services that wouldn’t otherwise exist in the absence of subsidies.
Before Pai changed his mind, the draft plan said, “In the absence of a real-world example of a non-geostationary orbit satellite network offering mass market fixed service to residential consumers that is able to meet our 100ms round trip latency requirements, Commission staff could not conclude that such an applicant is reasonably capable of meeting the Commission’s low latency requirements, and so we foreclose such applications.”
SpaceX met with commission staff over the last few days of May, telling them that its broadband system “easily clears the commission’s 100ms threshold for low-latency services, even including its ‘processing time’ during unrealistic worst-case scenarios.” We contacted SpaceX today about the low-latency change and will update this story if we get a response.