The Federal Communications Commission had earmarked the funds for SpaceX’s Starlink internet service. The company was slated to receive a total of $856 million, one of the largest chunks of the $9 billion that was auctioned off. Three out of five people say access to high-speed internet is still a pressing issue.

FCC says it cannot afford to subsidize ventures that are not delivering the promised speeds. SpaceX has said that it already has more than 400,000 customers across the globe. It’s already launched nearly 3,000 satellites, which work in tandem to beam internet access to the ground.

LTD Broadband failed to obtain proper status and approvals for service in seven states, the FCC says. That's a far different approach than traditional high-speed internet, which relies on underground fiber optic cables. The FCC also said it’s denying a $1.3 billion award earmarked for LTD Broadband.

Rosenworcel cited the cost of Starlink as part of the reason for the denial. “Starlink’s technology has real promise,” she said. Traditional telecommunications companies and some broadband advocates argued that SpaceX's Starlink network was too new and unproven.

The FCC’s $9 billion subsidy package was funded by fees that are routinely taken from internet customers in the United States. The idea is to siphon funds from urban areas where connectivity is plentiful and use that to subsidize the hefty costs of expanding internet infrastructure into more remote locations.
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