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President Biden’s slow rollout of a $42.5 billion rural internet program has raised new criticism of the administration’s decision to yank federal funding for Elon Musk’s Starlink broadband service, which proponents say could provide faster, cheaper internet access to areas with little or no connectivity.
Mr. Musk criticized the federal program in response to a Washington Times story detailing the yearslong process of administering the massive tranche of funds and getting homes connected.
“Your tax dollars for nothing,” Mr. Musk posted on his social media site, X.
The Broadband Equity Access and Deployment Program, or BEAD, has yet to connect a single rural home to high-speed internet service, years after Mr. Biden signed the funding into law in November 2021.
At the current pace of distributing the funds, it will take until 2030 to connect high-speed internet to most of the rural areas intended to benefit from the BEAD program. None of the projects will begin until 2025 or 2026, according to the Commerce Department, which is in charge of it.
Mr. Musk’s SpaceX is excluded from the BEAD federal subsidies because the money is reserved for companies deploying fiber-optic cable, which the government views as a more proven technology.
During the Trump administration, SpaceX was on track to receive $885.5 million from a different federal program aimed at providing internet to rural locations. But Mr. Biden’s Democratic-led Federal Communications Commission canceled the SpaceX award in 2022.
The money, administered under the Rural Digital Opportunity Fund, would have helped SpaceX provide high-speed internet service to 640,000 rural locations in 35 states using Starlink, a constellation of small satellites in low Earth orbit.
The FCC rescinded the funds in August 2022, citing questions about Starlink’s internet speed and “the uncertain nature” of SpaceX’s Starship launches.
Some have blamed the cancellation on the Biden administration’s apparent disdain for Mr. Musk, who has been critical of the president using his perch on X, formerly Twitter.
The Biden administration has launched multiple investigations of Mr. Musk and his business. In November 2022, Mr. Biden said Mr. Musk’s “technical relationships” with other countries “is worthy of being looked at,” and when asked for details, told reporters, “There are a lot of ways” to investigate him.
FCC Commissioner Brendan Carr, a Republican appointee, said the commission’s decision to revoke the subsidies for Starlink internet “certainly fits the Biden administration’s pattern of regulatory harassment” of Mr. Musk.
SpaceX, meanwhile, has been successfully deploying new low-orbit satellites that the company said will continue to broaden the availability and increase the speed of Starlink internet.
SpaceX launched 20 new Starlink satellites from California on June 18. According to SpaceX, there are now more than 6,000 operational satellites in the Starlink “megaconstellation.”
Homes can be hooked up quickly with a receiver that provides internet with download speeds of 25-220 Mbps, or megabits per second, according to the company.
The BEAD program limits federal subsidies to companies that will install high-speed internet with fiber optic cable, which provides consistently faster speeds — up to 1000 Mbps — and is considered more reliable.
Installing fiber-optic cable is far more costly, however, and takes much longer to deploy, particularly in rural areas without internet service that the BEAD program is intended to target. Cost estimates for laying fiber-optic cable range from more than $12 per foot in rural areas with soft ground to $20 per foot — which is $105,600 per mile — in rocky terrain.
Mr. Carr said Starlink was on track to install the infrastructure for high-speed internet using government subsidies at a much faster pace and at a lower cost.
SpaceX said it could hook up rural areas at a cost of $1,377 per location, Mr. Carr said. The federal subsidies would have been used to add ground stations and reserve the satellite capacity needed to provide service to the targeted rural areas.
By comparison, $82 million in federal funds awarded in January to North Carolina are expected to connect 16,000 rural homes to the internet via fiber-optic cable, which amounts to a cost of more than $5,000 per home.
“For $42 billion they could have bought Starlink dishes for 140 million people,” influential tech blogger Scott Woods posted on X.
None of the federal funding is intended to pay for monthly service or home equipment, although Commerce Department officials are demanding BEAD funding recipients provide low-cost options for consumers.
Starlink for homes requires the purchase of a satellite dish and Wi-Fi-router kit that cost between $299 and $599, depending on location. The cheapest plan costs $120 per month for download speeds of 20 to 100 Mbps and unlimited data. Fiber internet costs around $50 per month, with higher costs for unlimited data.
The biggest difference may be the wait. While many rural areas won’t connect to high-speed internet for years under Mr. Biden’s BEAD program, Starlink offers same-day delivery of its installation equipment, which can be set up in a couple of hours.
Mr. Musk appealed the decision to revoke the federal subsidies for Starlink, but the FCC rejected it, saying the company had not proved it could provide internet speeds of a minimum of 100 Mbps.
In a letter sent earlier this year to House lawmakers who questioned the decision to revoke the funding, FCC Commissioner Jessica Rosenworcel cited a multitude of reasons, including Starlink’s high startup and monthly costs for rural consumers.
Ms. Rosenworcel said Starlink also refused to remove urban areas from their funding bid, among them Newark International Airport and the Chicago Loop.
“Starlink continues to make its service available to consumers, and nothing in the Commission’s decision on Starlink’s application prevents consumers from choosing Starlink if it meets their needs,” Ms. Rosenworcel wrote.
SpaceX, which reports more than 1.3 million Starlink subscribers in the U.S., did not respond to a media inquiry.
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