SpaceX is urging the Federal Communications Commission to phase out its High Cost subsidy program, arguing that the rapid expansion of Starlink and other low-Earth-orbit satellite networks has reduced the need for federal subsidies to build and maintain rural broadband infrastructure.

The FCC launched a rulemaking in May to reconsider portions of the High Cost Program, which supports broadband and voice networks in rural and other high-cost areas. Several of the mechanisms under review are scheduled to expire in 2026 and 2028, and the commission is examining how the growing availability of satellite broadband should affect future eligibility for support.

FCC data cited in the proceeding show that about 9% of broadband serviceable locations in the areas covered by the review lacked terrestrial service offering at least 100/20 megabits per second as of mid-2025. More than 99% of those locations were listed as having access to a low-Earth-orbit satellite provider offering at least those speeds.

The High Cost Program is part of the federal Universal Service Fund and provides roughly $4.5 billion annually through multiple programs supporting rural telecommunications infrastructure. The FCC's current review specifically includes legacy rate-of-return and Alternative Connect America Cost Model mechanisms.

SpaceX has argued that continued subsidies can become unnecessary where an unsubsidized competitor such as Starlink already provides service. Rural telecommunications groups, however, have argued that satellite availability does not eliminate the need for terrestrial networks and have raised concerns involving capacity, reliability and affordability.

The FCC has not decided whether to continue, reduce, or eliminate the support mechanisms under review. Any changes will have to go through the commission's ongoing rulemaking process.