The Federal Communications Commission denied the application for subsidies to support rural broadband customers through the company's Starlink satellite internet network.
The FCC auctioned off $9.2 billion in December 2020 under the Rural Digital Opportunities Fund. In 35 states, the company sought funding to provide satellite internet.
The FCC wants to encourage broadband providers to bring service to areas that are hard to reach.
The FCC said in a press release that the providers failed to demonstrate that they could deliver the promised service.
As we move into a digital future that demands more powerful and faster networks, we need to put scarce universal service dollars to their best use. The FCC can't afford to subsidize ventures that aren't delivering the promised speeds or aren't likely to meet requirements.
Starlink is still developing and has a "real promise", according to Rosenworcel.
CNBC asked the company for comment, but they didn't immediately reply.
In order to deliver high-speed internet to anywhere on the planet, Starlink will have thousands of satellites. $2 billion was brought in by the company this year to fund the development of Starlink and its next- generation rocket.
The FCC's denial of Starlink from the RDOF program comes soon after a separate but crucial authorization for Space X to provide mobile Starlink internet service to boats, planes and trucks.
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