The Federal Communications Commission (FCC) backtracked on plans to award SpaceX millions of dollars in subsidies to deliver rural broadband coverage, as doubts over the company’s ability to meet minimum quality requirements re-emerged.

SpaceX was awarded $885.5 million of the $9.2 billion Rural Digital Opportunity Fund (RDOF) pot in late 2020 despite FCC reticence to include the company in an auction process due to concerns over its ability to deliver low-latency broadband services from its Starlink satellites.

The programme aims to close a digital divide in the US by funding deployments of high-speed broadband in unserved areas. SpaceX’s award involved 642,925 locations in 35 states.

In a statement announcing the rejection, FCC chair Jessica Rosenworcel questioned SpaceX’s consumer business model.

The FCC also ruled LTD Broadband was now ineligible to participate in the programme. The operator was set to be the biggest beneficiary of the funding programme.

Rosenworcel added the regulator could not affort to subsidise ventures which were not delivering the “promised speeds or are not likely to meet programme requirements”.

Ookla data showed Starlink’s average US downlink data rate stood at 90.55Mb/s in Q2, with upload at 9.33Mb/s.