Biden drops contract to Musk firm, draws fire

U.S. President Joe Biden has been accused of unfairly penalizing political rival Elon Musk by dropping a Us$885-million contract awarded to his satellite company Starlink.

Republican official Brendan Carr attacked a decision by a Biden nominee to revoke the award to Starlink to provide internet connections to 650,000 rural homes. Carr, who works at the Federal Communications Commission (FCC), said the decision was “a clear error and plainly exceeds agency authority.”

Musk has been critical of the Democratic Party. In May, he said he could “no longer support them” and said he would vote Republican.

Starlink sells US$600 satellite dishes to consumers, which they use to connect to signals from its passing satellites. The US$885 million in subsidies were awarded in 2020 under Donald Trump’s administration.

But this month, the FCC, chaired by Biden nominee Jessica Rosenworcel, rejected the award, arguing that Starlink could not deliver the connections.

She said the FCC would not “subsidize its still developing technology for consumer broadband, which requires that users purchase a US$600 dish.” She said taxpayers would not give funds to services “not delivering the promised speeds.” The funds were part of US$9 billion the FCC was due to distribute to faster broadband projects.

The decision was publicly attacked by her FCC colleague Carr. The FCC is made up of political appointees from both Republican and Democratic parties. Carr, an appointee of Trump, said: “The agency’s decision here mirrors the administration’s broader set of infrastructure missteps by costing taxpayer dollars while leaving rural communities behind.”

The commissioner said though Starlink’s dishes cost hundreds of dollars, connecting remote homes using fibre lines is often more costly. Around 35 per cent of households currently have no access or can only access extremely low speeds.

The FCC did not respond to a request for comment.