<story><title>SpaceX gets $886M from FCC to subsidize Starlink in 35 states</title><url>https://arstechnica.com/tech-policy/2020/12/spacex-gets-886-million-from-fcc-to-subsidize-starlink-in-35-states/</url></story><parent_chain><item><author>Mountain_Skies</author><text>My recent employer was one of the ISP providing rural telecom service. These subsidies accounted for a hefty percentage of our income and the company was still perpetually on the edge of failure. Most of our competitors were in similar situations, loaded down with breathtakingly large amounts of debt and expensive to maintain decaying infrastructure, much of it purchased from the Baby Bells when they got out of the market. I can&amp;#x27;t say that the company was particularly well run but am certain that without the government subsidies, the business would collapse and large numbers of rural customers would be without telecom services, which extend beyond just internet access.&lt;p&gt;Not sure what Starlink&amp;#x27;s existence is going to do to the company. Offering 25 Mbps aDSL with low reliability isn&amp;#x27;t going to compete very well if a customer can get 100 Mbsp service for a similar price and higher reliability. On the other hand, this might be justification the company can use to stop servicing the most expensive of the rural accounts to service while focusing on small town gigabit service that can compete with a reasonable expense to service.</text></item><item><author>liquidise</author><text>This headline is only part of the story, looks like ~10 ISP&amp;#x27;s were awarded sizable subsidies.&lt;p&gt;While i am not a fan of subsidies in general, the ISP space is particularly tricky for free-market forces to ensure competition. The capital requirements are overwhelming in many cases for a traditional startups, leaving the only other option as local&amp;#x2F;municipal votes, which have been successful in some areas.&lt;p&gt;Long-term, i could see internet access to receive utility status in the states. Until that happens, funding ISP competition, particularly in rural areas feels like a wise move.</text></item></parent_chain><comment><author>nevdka</author><text>The infrastructure those companies have built already exists, and the subsidies are mostly going to pay debt. If the subsidies stopped, the companies would go bankrupt. Their assets would be sold to another company, likely at a price less than the debt. The new company could therefore have a lower debt burden, and wouldn&amp;#x27;t necessarily need the subsidies to provide the same level of service. The subsidies are stopping the market from efficiently allocating capital.</text></comment>
<story><title>SpaceX gets $886M from FCC to subsidize Starlink in 35 states</title><url>https://arstechnica.com/tech-policy/2020/12/spacex-gets-886-million-from-fcc-to-subsidize-starlink-in-35-states/</url></story><parent_chain><item><author>Mountain_Skies</author><text>My recent employer was one of the ISP providing rural telecom service. These subsidies accounted for a hefty percentage of our income and the company was still perpetually on the edge of failure. Most of our competitors were in similar situations, loaded down with breathtakingly large amounts of debt and expensive to maintain decaying infrastructure, much of it purchased from the Baby Bells when they got out of the market. I can&amp;#x27;t say that the company was particularly well run but am certain that without the government subsidies, the business would collapse and large numbers of rural customers would be without telecom services, which extend beyond just internet access.&lt;p&gt;Not sure what Starlink&amp;#x27;s existence is going to do to the company. Offering 25 Mbps aDSL with low reliability isn&amp;#x27;t going to compete very well if a customer can get 100 Mbsp service for a similar price and higher reliability. On the other hand, this might be justification the company can use to stop servicing the most expensive of the rural accounts to service while focusing on small town gigabit service that can compete with a reasonable expense to service.</text></item><item><author>liquidise</author><text>This headline is only part of the story, looks like ~10 ISP&amp;#x27;s were awarded sizable subsidies.&lt;p&gt;While i am not a fan of subsidies in general, the ISP space is particularly tricky for free-market forces to ensure competition. The capital requirements are overwhelming in many cases for a traditional startups, leaving the only other option as local&amp;#x2F;municipal votes, which have been successful in some areas.&lt;p&gt;Long-term, i could see internet access to receive utility status in the states. Until that happens, funding ISP competition, particularly in rural areas feels like a wise move.</text></item></parent_chain><comment><author>kevin_thibedeau</author><text>I&amp;#x27;d love to get 25Mb DSL but you can&amp;#x27;t get that in the US where you&amp;#x27;re lucky to have anything above 4Mb. Not all of us need 100Mb+ internet access.</text></comment>