The U.S. Federal Communications Commission (FCC) allocated $9.2 billion in December this year to help about 10 million rural residents bridge the digital divide. Among them, Elon Musk's SpaceX became one of the largest beneficiaries of the Rural Digital Opportunity Fund (RDOF), winning $885.51 million for its Starlink service, but this decision immediately sparked fierce controversy.

Critics and industry experts have expressed concerns about Starlink's cost and its ability to deliver on its promises. Despite skepticism, satellite internet technology still holds promise in alleviating the digital divide that has plagued rural America for years.

"The innovation here is deploying a large-scale network and making it serve millions of consumers," said Tyler Cooper, editor-in-chief of BroadbandNow, an internet comparison and research company. "That part, I wouldn't say is unproven, but it certainly hasn't reached the scale SpaceX expects."

Amazon and SpaceX's Double Bet

SpaceX has set ambitious goals for its Starlink project. The company says it plans to deploy up to42,000 low Earth orbit (LEO) satellites, and as of January, it had deployedmore than 1,000 satellites. SpaceX says its rockets can launch up to 60 satellites at a time.

In regulatory filings with the FCC, SpaceX said the technology can provide speeds exceeding 100 megabits per second (Mbps), including in rural areas traditionally overlooked by internet companies. This speed can meet the regular usage needs of up to five users simultaneously.

However, SpaceX is not the only company deploying LEO satellite internet. Amazon is also competing through its Project Kuiper, which has been approved to deploy3,236 satellites, and has committed to investing over $10 billion to build the network.

Users need to install antennas, satellite dishes, or other receivers at home. These devices communicate with satellites in space via radio waves, connecting satellite signals to home modems. In higher orbits, data transmission can sometimes experience latency; LEO satellites can significantly reduce such delays. The satellites communicate with each other and share the connection load in orbit, forming a mesh network that provides users with more stable internet service.

"In an ideal world, we would push for universal fiber access, and that would be great. But unfortunately, that's not realistic."

— Tyler Cooper, Editor-in-Chief of BroadbandNow

A Viable Option for Rural Areas

Analysts believe rural residents will benefit the most from satellite internet, especially where existing operators cannot lay fiber to homes due to lack of commercial viability.

"In an ideal world, we would push for universal fiber access, and that would be great," Cooper said. "But unfortunately, that's not realistic, especially in a country like the U.S. with vast differences in population density and diverse terrain. Fiber construction is extremely costly, especially in rural communities, because we have to consider return on investment."

During the COVID-19 pandemic, this technology also gained more attention, as the pandemic highlighted thesignificant digital divide. Unlike fiber, satellite technology has become a more viable option as technology advances and service reliability improves, with past issues of bad weather affecting satellite connections having improved.

"We're seeing satellite services that are more robust and able to penetrate weather and clouds," said Ryan Johnston, federal projects policy advisor for the advocacy group Next Century Cities. "Early satellite services often couldn't receive signals on cloudy days. But now, we're seeing satellite services in higher spectrum bands that can more easily penetrate clouds."

Doubts About the Technology and Its Cost

Despite the potential of satellite internet, there are still many concerns about the technology and the FCC's decision to award funds to SpaceX to provide service in 35 states. For internet equity advocates, a major barrier is the cost of service, which could be a hurdle for many potential customers.

SpaceX's Starlink service charges customers a $499 initial equipment fee during the beta phase, followed by a monthly fee of$99. Johnston said this cost could be prohibitive for many rural Americans. Amazon, meanwhile, says its custom antennas for Project Kuipercustom antennaswill enable it to "offer small, economical customer terminals."

"Many of those using these services are low-income rural Americans," Johnston said. "If they have to pay $100 a month, that could mean they either pay the broadband bill or buy groceries. Saying this is the only option is a serious problem."

However, not all experts share the cost concerns. BroadbandNow says that if Starlink and Project Kuiper deliver on their promises, adding LEO satellite internet options could save Americans over $30 billion by improving competition and lowering prices.

Additionally, many experts remain skeptical of the technology itself, calling it "unproven." At a virtual press conference hosted by the National Rural Electric Cooperative Association (NRECA) in February, opponents raised concerns. NRECA represents groups involved in rural broadband deployment and has submittedwritten comments。

to the FCC. "We're using public funds in the RDOF auction, and the program is designed to deploy proven technologies, not to fund R&D experiments for technologies that may not connect Americans with real broadband," NRECA CEO Jim Matheson said at the press conference.

Participants on the media call said the service provided by LEO satellites is unreliable and questioned whether connection speeds could reach promised levels. Tim Bryan, CEO of the National Rural Telecommunications Cooperative (NRTC), questioned whether the satellite network and spectrum are robust enough to handle the expected number of users.

"My concern is mainly about capacity—not one or two users, but what happens when you get to 20,000, 30,000, 40,000, or 50,000 users, because obviously the whole country has to share the same constellation," Bryan said at the NRECA press conference.

A SpaceX spokesperson declined to comment on the criticisms, instead pointing to recent social media posts praising Starlink service, including one from the Washington State Emergency Management Division mentioning its provision of internet to a town rebuilding after wildfires, and a post from the Hoh Tribe in Washington.

"Great to have @SpaceX Starlink internet support as emergency workers help residents of Malden, Washington, rebuild their town after it was destroyed by wildfires earlier this month. #wawildfire"

— Washington State Emergency Management Division (@waEMD), September 28, 2020

Given that SpaceX is still refining its proof of concept, Johnston believes the FCC was too hasty in allocating funds to the company. "While this funding absolutely needs to be deployed, I think the FCC was too quick to hand it over to a satellite provider," he said. "The way SpaceX markets its product is fairly untested. Their approach to the problem is very limited."

FCC spokesperson Anne Veigle dismissed criticisms of the RDOF auction process, saying the commission "took a technology-neutral approach, allowing companies to use different technologies to provide broadband to unserved areas." Veigle noted that the next phase requires all winning bidders to submit long-form applications outlining their service plans. "No funds will be disbursed until the commission determines that the long-form applications are complete and meet all program requirements," she said in an email.

Not a Panacea

For now, whether satellite internet can help close the digital divide remains to be seen. In fact, the FCC, in arecent report on internet availability, noted that "data may overstate the availability of satellite service." The report said: "While satellite coverage may allow providers to offer service to large portions of the country, overall satellite capacity may limit the number of consumers who can subscribe to satellite service simultaneously."

Past false promises to bridge the digital divide have also raised concerns. In 2015, the FCC awarded $789 million to CenturyLink and Frontier to expand rural broadband coverage. But both companies recently announced they missed deployment deadlines, a development Matheson called "troubling."

For local governments, there are opportunities to partner with satellite companies to build infrastructure such as ground stations. But Jane Coffin, senior vice president of internet growth at the advocacy group Internet Society, said the only way to get good internet is to promote competition and let local communities invest in their own networks. A survey by the Broadband Equity Partnership echoed this view: of more than 120 respondents across 18 states, 70% said local economic development agencies can play a key role in encouraging locally owned networks and infrastructure, rather than relying on large companies that may lack financial viability.

"You can't just rely on existing carriers," Coffin said. "Small, medium, and large networks need to be available and interconnected to ensure the network can carry traffic... Some small community networks can backhaul traffic to satellites, or upload connections and emails via ground stations to satellites, transmitting to another satellite in seconds, then downlinking to another country."

"I don't think any single technology can solve the digital divide, because the problem involves so many aspects."

— Ryan Johnston, Federal Projects Policy Advisor at Next Century Cities

Francella Ochillo, executive director of Next Century Cities, said the goal of getting every household to 25 Mbps—which the FCC defines as thebaseline broadband speed—is noble, but given the increasing importance of the internet, it's not forward-looking enough. With the proliferation of Internet of Things devices in the coming years, she said this will put more strain on networks.

"It's very important that we keep thinking ahead, always looking for ways to connect people, but at speeds needed for the future," Ochillo said. "We need to think about what speeds we'll actually need five or ten years from now."

Experts also warn that solving the digital divide requires more than deploying new technologies like LEO satellites. The FCCestimated last yearthat just under 18 million people lack broadband, although broadband mapping has been criticized for failing to show the full picture of the digital divide. Estimates of the cost to connect everyone to broadband vary. When House Democratsreintroducedthe Leading Infrastructure for Tomorrow's America (LIFT America) Act, they pledged nearly $94 billion to reduce the digital divide.

Johnston said a holistic approach is needed, not only introducing new solutions but also helping people acquire the skills to fully utilize them. "I don't think any single technology can solve the digital divide, because the problem involves so many aspects," he said. "There are accessibility issues, affordability issues, and digital literacy issues. So even if we can provide the best satellite service and connect everyone in the country, we still need to address all the other issues before we can say the digital divide has been bridged."