SpaceX Still Pushing to Slash High Cost Fund
The satellite company recovered its Starship rocket after a July test flight, and is looking to acquire some extra spectrum
WASHINGTON, Aug. 28, 2026 – SpaceX is still pushing federal regulators to slash a broadband subsidy that supports rural ISPs it’s increasingly competing with for subscribers.
On Wednesday three SpaceX attorneys, satellite policy chief Joseph Bissonnette, met with staff from the Federal Communications Commission to press their case.
The SpaceX representatives said that the agency’s High Cost program, which spends $4.5 billion on rural networks annually, should be wound down and replaced with an affordability subsidy. They spoke with top advisors to FCC Commissioner Anna Gomez, the agency’s lone Democrat.
“Consistent with the Commission’s long-standing commitment to avoiding waste and inefficiency in universal service funding, the Commission should chart a path to wind down outdated and redundant High-Cost programs that now clearly provide diminished — or even negative — returns and redirect these resources to an enhanced affordability program that will deliver clear and impactful benefits to consumers,” Bissonnette wrote in a filing posted Friday.
The FCC voted in May to open an inquiry into the program and ask about whether it should be altered given the proliferation of satellite broadband and what to do about some sunsetting legacy funding. Satellite ISPs are currently ineligible for funding under the program.
SpaceX had the same response to that inquiry earlier this month, saying its satellite service had effectively solved the market failure the program is trying to address.
Participants in the program and rural ISP trade groups uniformly disagreed. They generally argued spectrum capacity issues made satellite slower and less reliable than terrestrial fiber.
In its annual review of broadband deployments earlier this month, the FCC included estimates both including and excluding satellite, which is offered nearly everywhere. SpaceX sometimes institutes congestion pricing for new customers if capacity is running low.
“As acknowledged by industry, service reliability may decline during periods of congestion and actual speeds could depend on location, time of day, and type of service plan,” the agency wrote.
SpaceX recovered from the Indian ocean Thursday the massive Starship rocket it test launched last month. The rocket will be necessary for the company's plans to launch bigger fixed broadband satellites aimed at providing higher speeds.
Spectrum acquisition
SpaceX is also looking to acquire a bit of additional spectrum to support its direct-to-device service, as first reported this week by Light Reading.
On July 17, the FCC sought comment on the company’s application to acquire unpaired AWS-3 licenses from Tristar License Group.
SpaceX is already buying unpaired AWS-3 spectrum from EchoStar, and the Tristar licenses would expand its coverage with those airwaves. The licenses cover 62 counties in eight states and about 4 percent of the U.S. population, the FCC said.
“Indeed, by expanding the footprint of unpaired AWS-3 spectrum available to SpaceX, this transaction will also simplify the provision of satellite D2D services and enhance spectral efficiency by eliminating areas that SpaceX's system would otherwise have to work around,” the companies wrote in their application.
SpaceX executives said on the company’s first earnings call that they plan to deploy terrestrial assets, tiny small cells on stands already supporting the company’s fixed broadband dishes, and compete directly with the major wireless carriers.
Analysts were almost uniformly skeptical of the plan. It would be in addition to the 15,000 satellites the company is asking the FCC to launch to support direct-to-device, which SpaceX said in the application it plans to start launching in late 2027 with approval.
Iridium opposition
SpaceX dominates the low-Earth orbit satellite space, partly because it has its own in-house, highly effective rocket launch arm. Securing launch capacity has incredibly become an issue for other companies deploying constellations.
It’s also securing exclusive direct-to-device spectrum from EchoStar, meaning it won’t have to rely on carrier partnerships in the future (phone manufacturers would also have to add support for the bands).
Other companies, namely Amazon and AST SpaceMobile, are also trying to snag usage rights to exclusive D2D spectrum in an effort to compete in the space. Rocket launcher Rocket Lab is also trying to buy Iridium, a satellite company with its own L-band spectrum.
That would create a company similarly vertically integrated to SpaceX, although at a smaller scale.
SpaceX submitted a letter throwing cold water on the deal Thursday. The company said it didn’t oppose the deal, but accused Iridium of trying to prevent SpaceX and others from accessing spectrum and said the FCC should “carefully evaluate” the transaction.
Iridium did not immediately respond to a request for comment.
