SpaceX Tells FCC to Kill $3 Billion High Cost Broadband Subsidies

SpaceX wants the Federal Communications Commission to eliminate a subsidy program that distributes more than $3 billion every year, calling the agency's High Cost universal support mechanism "corporate welfare programs, not broadband programs."

The satellite internet provider filed its argument with the FCC on October 29, pressing the regulator to retire the program and redirect the money toward consumers or other broadband initiatives. SpaceX contends the subsidies fund networks that private companies would build anyway, and that the money does little to improve broadband availability or subscription rates.

The filing followed a round of face-to-face lobbying. SpaceX Principal of Satellite Policy Joseph Bissonnette met with FCC officials on October 27 and 28, and then sat down with staff for Democratic Commissioner Anna Gomez on October 30 to walk through the proposal.

What evidence does SpaceX cite?

The company leaned on an October analysis from the Technology Policy Institute, a research body whose findings cut against the core rationale for federal deployment subsidies. The study found that the Rural Digital Opportunity Fund, one of the FCC's flagship programs, accelerated broadband deployment by less than a year on average for two-thirds of the locations that received funding.

The same research concluded that subsidies actively discouraged deployment by providers that were not receiving federal support — a crowding-out effect that, in SpaceX's reading, undermines the program's entire premise.

SpaceX broke down where the money goes:

• More than $3 billion annually flows through legacy High Cost funding mechanisms
• The list includes High Cost Loop Support and the Connect America Fund Broadband Loop Support, among other programs
• Many of these mechanisms lack measurable deployment requirements or defined expiration dates
• The result, SpaceX argued, is ongoing payments to incumbent telecommunications carriers with no clear exit

Why does SpaceX say the money is no longer needed?

The company pointed to market change. Cable, fixed wireless, and satellite providers — a category that includes SpaceX's own Starlink service — are expanding broadband into rural communities without federal support.

The numbers back the argument, according to the filing. Legacy subsidy areas now account for just 5 percent of U.S. broadband serviceable locations. Consumers in those areas do not show significantly higher broadband subscription rates than consumers in comparable areas that receive no subsidies at all.

SpaceX also flagged a policy contradiction inside the federal government. The Trump administration has positioned the Broadband Equity, Access, and Deployment program as the final federal broadband deployment subsidy program. Continuing the FCC's legacy funding mechanisms, SpaceX argued, sits uneasily with that stated endpoint.

Where would the money go instead?

SpaceX suggested the billions spent annually on High Cost subsidies would work harder on the affordability side of the ledger. It singled out Lifeline, the program that helps low-income consumers pay for service, as an underfunded initiative that could absorb redirected dollars.

The recommendation aligns with the company's commercial position: if deployment no longer needs subsidy, affordability support widens the pool of consumers who can pay for services such as Starlink.

What is the regulatory context?

The filing lands at a moment of legal instability for the Universal Service Fund. The Fifth Circuit recently ruled against the FCC's delegation of authority to the Universal Service Administrative Company, the body that administers the fund. That ruling has raised questions about how — and by whom — the fund can be run at all.

SpaceX framed the uncertainty as an opening rather than a problem. The legal turbulence, the company argued, gives the FCC a natural opportunity to reconsider its universal service programs and wind down High Cost subsidies on its own terms.

Whether the commission takes that invitation is an open question. Killing a program that incumbent carriers have counted on for decades would require the FCC to overrule entrenched interests, reconcile its approach with the BEAD program's future, and navigate a court fight over the fund's administration — all while SpaceX waits to see whether its argument converts subsidy dollars into Lifeline budgets or new customers.

The FCC has not set a timeline for responding to the proposal.