Elon Musk Objects to Biden Administration's Rural Internet Subsidies

Criticism from FCC Commissioner

The announcement by the Biden administration was met with criticism from FCC Commissioner Brendan Carr, who was appointed by President Trump. Carr pointed out that the new investment would cost $5,125 per location, whereas renewing SpaceX's subsidies from the Rural Digital Opportunity Fund would have cost an estimated $1,377 per household.

However, it is important to note that Starlink, SpaceX's internet service, requires expensive satellite equipment that starts at $599, as well as future upgrades. President Biden emphasized that "fiber-optic cable is being laid in the ground" in the rural areas, which eliminates the need for such equipment.

Musk joined Carr in criticizing the administration's decision, describing it as "insane" and highlighting Starlink's superior bandwidth capabilities compared to the FCC's definition of high-speed broadband.

Starlink's Subsidies and Cost Estimation

SpaceX was previously awarded $885,509,638.40 in subsidies in 2020 for their bid to bring high-speed internet to 642,925 locations in 35 states. FCC Commissioner Carr estimated the cost per household in North Carolina based on this figure. However, it is unclear if North Carolina was among the states SpaceX had bid to work on.

Tyler Cooper, the editor-in-chief of BroadbandNow, emphasized that no single internet provider can cater to the entire rural population, including North Carolina. Cooper stated that fiber internet is the only technology capable of meeting the future bandwidth requirements of the nation. While Starlink is a great option for rural areas, Cooper believes federal funding should prioritize investments in fiber infrastructure.

It is important to note that SpaceX's contract with the federal government was rejected due to the company's failure to meet program requirements for funding. Carr alleged that the contract was canceled after President Biden's authorization to target Elon Musk, following his purchase of Twitter. Carr further explained that providing high-speed fiber lines to rural areas without SpaceX's assistance could cost the government around $3 billion.

Biden's Rural Internet Plan

President Biden's announcement of the $82 million investment in rural internet is just a small part of a larger plan to increase high-speed internet access for millions in rural areas across the country. This expansion is a part of the Affordable Connectivity Plan, which has already brought savings of approximately $440 million to over 880,000 households in North Carolina. The fiber-optic cable being installed in North Carolina will be manufactured domestically by companies like Corning and CommScope, creating manufacturing jobs in the state.

Elon Musk's objections to the subsidies for rural internet highlight the ongoing debate between different technologies and approaches to achieve widespread connectivity. While Starlink offers innovative satellite-based internet, critics argue that fiber infrastructure remains the most reliable and future-proof solution.