SpaceX wins $885 million for Starlink broadband service

The win provides new funding to Starlink, which recently provided free public testing in limited areas of the northwestern United States and Canada. The money also will help Starlink move toward bringing better-quality and faster Internet service to rural areas.

Elon Musk's company has more than 900 Starlink communications satellites in orbit and intends to launch hundreds more.

SpaceX won bids to provide broadband in 35 states, more states than any of the 180 companies that bid in the recent auction, which covered 49 states.

The contracts are a significant win for SpaceX, said Shagun Sachdeva, who has worked as an analyst covering large satellite constellations and recently founded her own consulting company, France-based Kosmic Apple.

"If SpaceX manages to get government and military contracts for Starlink, as they seem to be successfully doing so far, they can keep the commercial costs low enough to gain a decent market share," Sachdeva said.

The FCC funding and recent public testing mean SpaceX is "most definitely one of the front runners now" in providing broadband service, she said.

The companies that won more funding than SpaceX were LTD Broadband, which operates in the Upper Midwest, at $1.32 billion; Connecticut-based Charter Communications, $1.22 billion; and Rural Electric Cooperation Consortium, a nationwide collection of rural utilities, at $1.1 billion.

SpaceX Starlink satellites operate at roughly 340 miles above the Earth, which is considered a low-Earth orbit, and travel at 17,500 mph, according to SpaceX.

Winning bids in the auction allows SpaceX to submit formal applications for contract Internet service in rural areas. SpaceX has advertised Starlink at $99 a month after the purchase of a satellite dish receiver for $499, but the FCC funding is to be used partly to lower those costs for rural areas.