Pai just called out Musk’s play for government subsidies by labeling his Starlink satellite network high latency:

The Federal Communications Commission is not convinced that SpaceX’s Starlink broadband network will be able to deliver the low latencies promised by CEO Elon Musk. As a result, FCC Chairman Ajit Pai is proposing limits on SpaceX’s ability to apply for funding from a $16 billion rural-broadband program.

While traditional satellite broadband generally suffers from latency of about 600ms, Musk says that Starlink will offer “latency below 20 milliseconds, so somebody could play a fast-response video game at a competitive level.”

Everyone expects Starlink to offer much lower latency than traditional satellites because SpaceX satellites are being launched in low Earth orbits ranging from 540km to 570km. By contrast, geostationary satellites used for broadband orbit at about 35,000km.

“SpaceX claims that because its low-Earth orbit satellite system operates at ‘an altitude of 550 kilometers,’ it can deliver roundtrip latency at less than 50ms,” according to a public draft of Pai’s proposed rules for the $16 billion Rural Digital Opportunity Fund distribution. But the FCC plans to classify SpaceX and all other satellite operators as high-latency providers for purposes of the funding distribution, saying the providers haven’t proven they can deliver low-latency broadband.

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SpaceX and other satellite operators are also being ruled ineligible for a gigabit tier. Both the latency and gigabit decisions would put SpaceX at a disadvantage. As Pai said in an announcement, his plan “prioritizes bids offering to provide even faster speeds (up to a gigabit) and lower latency by giving those bids greater weight in the auction and awarding support to the bidder offering the best combination of speed and latency in each area.”

SpaceX has made demonstrations, but they are breadboards conducted under optimum conditions.

Once Starlink is in service, and is serving customers in the real world, that decision can be revisited, but my guess is that the claims of high bandwidth and low latency will be as much of an illusion as Tesla’s claims of self driving cars being just around the corner.