STATE OF ILLINOIS

ILLINOIS COMMERCE COMMISSION

Starlink Services, LLC : : Application for Designation as an Eligible : Telecommunications Carrier for the : 21-0005 Purpose of Receiving Federal Universal : Service Support pursuant to Section : 214(e)(2) of the Telecommunications Act : of 1996. :

PROPOSED ORDER

I. PROCEDURAL HISTORY On January 4, 2021, Starlink Services, LLC (“Applicant” or “Starlink”) filed with the Illinois Commerce Commission (“Commission”) a verified Application pursuant to Section 214(e)(2) of the Telecommunications Act of 1996 (“1996 Act”), 47 U.S.C. §151 et seq., and Section 54.201 of the Federal Communications Commission (“FCC”) rules requesting designation as an eligible telecommunications carrier (“ETC”) in the census blocks in which it was awarded Rural Digital Opportunities Fund (“RDOF”) support (the “Service Area”) under the provisions of Section 54.201(d) of the FCC rules. Applicant seeks an ETC designation in the Service Area in order to receive Universal Service Fund (“USF”) support from the federal RDOF. Pursuant to notice as required by law and the rules and regulations of the Commission, hearings were held in this matter before a duly authorized Administrative Law Judge (“ALJ”) of the Commission on January 27, 2021, March 18, 2021, April 7, 2021, April 12, 2021, April 15, 2021, and April 26, 2021. Applicant and Commission Staff (“Staff”) were each represented by counsel. There were no petitions to intervene. The evidentiary hearing took place on April 26, 2021. Applicant presented the testimony of Matthew Johnson, a Senior Business Operations Analyst employed by Space Exploration Technologies Corp. (“SpaceX”), the parent company of Applicant. Staff presented the testimony of David Sackett, an Economic Analyst in the Policy Division of the Public Utilities Bureau. The ALJ marked the record “Heard and Taken” at the conclusion of the April 26, 2021 hearing. Applicant and Staff each filed an Initial Brief and Reply Brief. II. BACKGROUND A. Universal Service and the Rural Digital Opportunity Fund The FCC provides several types of support through its USF programs. The two types of support available are Lifeline support and the RDOF support: Lifeline funds support the provision of voice and broadband services to low-income consumers by providing a discount, while the RDOF supports the development and provision of voice

21-0005 and broadband networks in high costs areas. The RDOF provides $20.4 billion in support nationwide to those areas of the country that are unserved by internet service providers, or where service is unavailable at 25/3 Mbps. The FCC has opted to transition from support of voice telephony services to the provision of broadband internet access services (“BIAS”) through both the Lifeline and RDOF programs. The FCC apportioned RDOF funding to high cost areas through a two- phase process. In RDOF Phase I, which targeted census blocks wholly unserved with broadband at speeds of 25/3 Mbps, the FCC implemented an Auction (“Auction 904”) which allowed any pre-qualified provider to bid on projects in designated census blocks. Bidders were required to bid for specific service levels related to both speed and latency. The bids were capped based on that model. Auction 904 was successful in awarding more than nine billion dollars of RDOF funding over a 10-year timeline. The FCC released information about the amounts bid and the support awarded to each winner on December 7, 2021. Phase II will include all locations that were not awarded in Phase I as well as those areas that are partially served currently. The budget for phase II will be $4.4 Billion plus all funds not awarded in Phase I. The FCC requires each provider awarded RDOF Phase I (“RDOF I”) support to offer voice and BIAS and to provide Lifeline service in the area within Illinois for which the winner was awarded that support. See 47 C.F.R. §54.805. Prior to receiving support, winners be must designated as ETCs in each state for which they were awarded support. There were 19 winners awarded RDOF I support in Illinois through Auction 904 for a total of $369 million over 10 years. The FCC requires that all winners submit proof of designation as ETCs by the appropriate regulatory body within 180 days from that notice; this deadline is June 7, 2021. There is no provision in Auction 904 to reassign any funds that do not get paid out to a winning bidder that fails to get ETC designation within the specified timeframe. Thus, failure of a winning bidder to receive ETC designation from the Commission will result in the winning bidder losing the entire amount of support awarded, with funds going back to the RDOF, as such funds will not be re-awarded to any other bidder at this time. B. Applicant, Service, and the Requested Service Area Applicant is a limited liability company formed in 2020 under the laws of Delaware authorized to conduct business in Illinois. Applicant is a wholly-owned subsidiary of SpaceX, which is also a Delaware corporation with its principal office located in Hawthorne, California. SpaceX is a private American company founded in 2002 by Elon Musk. SpaceX participated in the RDOF Phase I auction. The FCC awarded SpaceX $885 million in support to provide broadband and standalone voice services in 35 states. This includes $8,325,104 awarded to provide broadband and standalone voice services to the census blocks in Cook, DuPage, and Lake Counties, Illinois listed in Exhibit 2 to the Application. On December 22, 2020, pursuant to the processes established by the FCC, SpaceX assigned its winning bids to Applicant. SpaceX designs, manufactures, and launches advanced rockets, spacecraft, and satellites, and offers broadband service over the world’s largest satellite constellation. SpaceX has over 8,000 employees in the United States at its Hawthorne, California

2 21-0005 headquarters and at facilities across the country. Applicant will rely on the significant managerial and technical expertise of SpaceX in delivering service to consumers. SpaceX is leveraging its track record of rapid innovation and experience building rockets and spacecraft to deploy a space-based broadband internet system capable of providing truly low-latency, high-throughput service in even the most remote areas of the country. The constellation of satellites providing this service is called Starlink. This service is ideal for bringing broadband and voice over internet protocol (“VoIP”) to underserved rural areas in the United States. Since the grant of its FCC satellite authorization in 2018, SpaceX has successfully deployed the largest satellite constellation in history and demonstrated its ability to deliver high-quality internet to thousands of users. The FCC authorized SpaceX in 2018 to deploy and operate Starlink, which consists of more than 4,400 Non-Geostationary Orbit (“NGSO”) satellites in low Earth orbit. The FCC based its decision on the ability of SpaceX “to bring high-speed, reliable, and affordable broadband service to consumers in the United States and around the world, including areas underserved or currently unserved by existing networks.”1 Applicant asserts that it and SpaceX bring to bear SpaceX’s successful history of design innovation, manufacturing capability, and ability to operationalize complex space and ground systems in order to create a U.S.-based manufacturing capability for Starlink satellites, consumer premises equipment, and ground station antennas. The result is the creation of a comprehensive ground network that currently communicates with over 900 Starlink satellites deployed, enabling SpaceX to commence beta service with thousands of users across multiple states and in some international locations. Applicant states that Starlink’s technical maturity and inherent capacity to support high-throughput, low-latency broadband service to underserved communities in even the most remote and rural areas of the United States promises to materially contribute to closing the digital divide. With more than 900 satellites deployed, Applicant relays that SpaceX has launched sufficient satellites in volume to provide continuous coverage to large parts of the United States and is expanding the size of its constellation rapidly to provide coverage over the entire country. SpaceX has already deployed ground equipment to support initial broadband operations in desired locations. SpaceX is currently offering select users beta consumer-grade broadband service in Idaho, Maine, Michigan, Minnesota, Montana, North Dakota, Oregon, Washington, and Wisconsin. Currently, Starlink beta users are selected to validate technical, operational, and business system readiness ahead of a broader public beta service roll-out. Applicant is seeking an ETC designation in each of the states in which SpaceX received support to provide broadband and standalone voice services through the RDOF. In addition to receiving an ETC designation from each relevant state authority (or from the FCC if the state disclaims jurisdiction) by June 7, 2021,2 all RDOF winning bidders

1 In re Space Exploration Holdings, LLC Application for Approval of Orbital Deployment and Operating Authority for the SpaceX NGSO Satellite System, Memorandum Opinion, Order and Authorization, 33 FCC Rcd, 3391, ¶ 1 (2018). 2 Rural Digital Opportunity Fund Phase I Auction Scheduled for October 29, 2020; Notice and Filing Requirements and Other Procedures for Auction 904, Public Notice, AU Docket No. 20-34, WC Docket

3 21-0005 are required to commercially offer voice and broadband service consistent with certain milestones and speed and latency requirements. RDOF recipients must offer service to 40% of the awarded locations statewide by the end of the third full calendar year following funding authorization, and 20% each year thereafter, resulting in 100% deployment to funded locations by the end of the sixth calendar year.3 Cost-effective, reusable launch services—a capability SpaceX has developed and maintains in-house—has enabled SpaceX to deploy a space-based system at the scale necessary to match the capabilities of terrestrial broadband providers, meeting current demand with high throughput and low-latency broadband that can address the full range of internet use cases, particularly for underserved areas. As of January 4, 2021, SpaceX has conducted 16 Starlink launches deploying more than 900 satellites. Applicant reports that SpaceX can comfortably rely on its current authorization from the FCC to operate its NGSO constellation consisting of 4,408 satellites, which provides broadband service using Ku- and Ka-band spectrum. SpaceX has launched a sufficient number of satellites to provide uninterrupted coverage to the northern United States. SpaceX has sufficient parts on hand and launches on manifest to deploy the remaining satellites needed for uninterrupted coverage over the majority of the United States in the coming months. SpaceX aims to achieve total coverage of the contiguous United States and Hawaii in 2021. Applicant plans to leverage these achievements, the Starlink constellation, and associated ground equipment to provide service to end users. Applicant explains that it will use the Starlink satellites to provide Internet Protocol (“IP”) connectivity between customer premises equipment (over its licensed Ku-band spectrum) and its gateways (over its licensed Ka-band spectrum). Aggregate consumer data travels via terrestrial fiber from regional gateway sites to internet Points of Presence (“PoPs”) where traffic enters into the internet. Unlike traditional satellite broadband services, SpaceX designed every component of its network—the gateway antennas, the consumer premises equipment, the software, and even the satellites themselves—for upgradability and scalability. The Starlink constellation leverages beam-forming and beam-steering capabilities to direct Ku-band beams to specific ground locations in targeted geographic areas called “cells.” Because the satellite’s beam covers a much smaller geographic footprint than traditional satellite internet services, Applicant can allocate and manage capacity and throughput characteristics to a defined group of consumers in a more precise manner. Applicant’s ability to closely manage traffic resembles a terrestrial-deployed network. Applicant’s network architecture has no significant variations by state, region, or other criteria where it has gateway sites and PoPs already in place, beyond standard regional configurations for standalone voice services such as localized phone numbers and emergency service integrations. Applicant may also offer different language support dependent on the region served. SpaceX has also applied to the FCC to deploy a next- generation system that will meet future surges in broadband demand, which will similarly be available for Applicant’s use.

Nos. 19-126, 10-90, 35 FCC Rcd. 6077, ¶ 81 (June 9, 2020) (“RDOF Auction Procedures PN”); RDOF Winning Bidder PN para. 36. 3 RDOF Order, ¶45.

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III. APPLICABLE AUTHORITY Pursuant to Section 214(e)(2) of the 1996 Act, 47 U.S.C. §214(e)(2), state commissions are delegated the task of designating common carriers subject to their jurisdiction as eligible to receive federal USF support. Supported services, for the purposes of Lifeline, are defined in Section 54.400(n) of the Rules of the FCC. 47 C.F.R. §54.400(n). Voice Telephony services and broadband internet access services (“BIAS”) are supported services for the Lifeline program and defined as: “Broadband Internet access service” is defined as a mass- market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up service. 47 C.F.R. §54.400(l). Voice telephony service is defined as: “Voice telephony service” is defined as voice grade access to the public switched network or its functional equivalent; minutes of use for local service provided at no additional charge to end users; access to the emergency services provided by local government or other public safety organizations, such as 911 and enhanced 911, to the extent the local government in an eligible carrier’s service area has implemented 911 or enhanced 911 systems; and toll limitation services to qualifying low-income consumers as provided in subpart E of this part. 47 C.F.R. §54.400(m). Supported services for the purposes of the RDOF program are defined equivalently in Section 54.101 of the FCC rules. 47 C.F.R. §54.101. Section 54.401(b) of the FCC’s rules specifies how discounts may be applied, stating: Eligible telecommunications carriers may allow qualifying low- income consumers to apply Lifeline discounts to any residential service plan with the minimum service levels set forth in § 54.408 that includes fixed or mobile voice telephony service, broadband Internet access service, or a bundle of broadband Internet access service and fixed or mobile voice telephony service; and plans that include optional calling features such as, but not limited to, caller identification, call waiting, voicemail, and three-way calling. (1) Eligible telecommunications carriers may permit qualifying low-income consumers to apply their Lifeline discount to family shared data plans. (2) Eligible telecommunications carriers may allow qualifying low-income consumers to apply Lifeline discounts to any residential service plan that includes

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voice telephony service without qualifying broadband Internet access service prior to December 1, 2021. (3) Beginning December 1, 2016, eligible telecommunications carriers must provide the minimum service levels for each offering of mobile voice service as defined in § 54.408. (4) Beginning December 1, 2021, eligible telecommunications carriers must provide the minimum service levels for broadband Internet access service in every Lifeline offering. 47 C.F.R. §54.401(b). Sections 214(e)(1) and 214(e)(2) of the 1996 Act (47 U.S.C. §214(e)(1) and 47 U.S.C. §214(e)(2)) include requirements that carriers must meet in order to be designated as ETCs and statutory requirements state commissions must follow in designating carriers as ETCs. IV. APPLICANT POSITION A. Common Carrier Status At 47 U.S.C. §153(11), the 1996 Act defines “common carrier” as “any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy ... .” A common carrier for hire must: (1) hold itself out “to serve indifferently all potential users”; and (2) allow “customers to transmit intelligence of their own design and choosing.”4 Applicant will provide BIAS and standalone voice service to the public throughout the Service Area on a common carrier basis. Hence, Applicant concludes that it will be a common carrier for the purposes of being designated as an ETC and receiving RDOF Phase I support. B. Provision of Supported Services Pursuant to 47 C.F.R. § 54.201(d)(1), Applicant will satisfy the requirement for offering the services supported by RDOF throughout the Service Area using a combination of owned and leased facilities. As described above, SpaceX is a facilities- based satellite provider with its own fleet of satellites, Earth stations, gateways, switching facilities, and other associated facilities and, therefore, Applicant will offer the supported services using its own facilities or a combination of its own facilities and resale of another carrier’s service. Pursuant to 47 C.F.R. § 54.101(a), Applicant will provide voice-grade access to the public switched telephone network (“PSTN”) by providing interconnected VoIP. Applicant is exploring avenues for the provision of voice services consistent with the requirements and goals of RDOF, including using a white-label managed service provider (“MSP”) voice platform that Applicant has certified to meet quality and performance standards exceeding those required by RDOF. In this baseline plan, Applicant would provide telephone services connecting consumers to its MSP platform using its network capacity, which is available to consumers through their customer premises equipment.

4 United States Telecom Ass’n v. FCC, 295 F.3d 1326, 1329 (D.C. Cir. 2002) (determining “common carrier” status for USF eligibility under 47 U.S.C. § 254(h)(1)).

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Consumers will have the option of using a third-party, conventional phone connected to a Session Initiation Protocol standards-compliant analog terminal adaptor or a native-IP Phone selected from a list of certified models. The MSP solution represents Applicant’s baseline plan for a standalone voice service offering. Applicant continues to assess integrating alternative standalone voice applications into the Starlink network, including other third-party providers, or possibly developing its own proprietary solution. Applicant may adopt such approaches in the event that further testing demonstrates alternative solutions would provide a superior experience to the end customer, or, if Applicant determines the end user would benefit from the existence of multiple voice solutions to introduce competition and redundancy into the supply chain – all while fully complying with RDOF and ETC requirements. The FCC, in its USF/ICC Transformation Order, made clear that eligible voice telephony services under Section 54.101(a) include the provision of voice service “over any platform, including the PSTN and IP networks.”5 The FCC further explained that “a broadband provider may satisfy its voice obligation by offering voice service through an affiliate or by offering a managed voice solution (including VoIP) through a third-party vendor.”6 Applicant will provide interconnected VoIP throughout the Service Area, sufficient for voice-grade access to the PSTN pursuant to Section 54.101(a). As part of the voice-grade access to the PSTN, an ETC must provide minutes of local service at no additional charge to end-users. The FCC has not specified a minimum amount of local usage that an ETC must offer. Applicant will offer voice rate plans in the Service Area that include local calling at no additional charge and will comply with any and all minimum local usage requirements adopted by the FCC or states with jurisdiction over Applicant’s standalone voice service. In its Lifeline and Link Up Reform Order, the FCC explained that toll limitation would no longer be deemed a supported service as of 2014.7 Accordingly, Applicant will not seek reimbursement for toll limitation services. Applicant currently has no Lifeline customers because only carriers designated as an ETC can participate in the Lifeline program. Once designated as an ETC, however, Applicant will participate in Lifeline, as required by the FCC’s rules, and will provide toll blocking service in accordance with 47 C.F.R. §§ 54.500, et seq. Pursuant to 47 C.F.R. § 54.101(a)(2), Applicant will offer BIAS with the capability to transmit data to, and receive data by wire or radio from, all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up service. Applicant will offer broadband at rates that are reasonably comparable to rates offered in urban areas.

5 Connect America Fund et al., Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd. 17663, 17685, para. 78 (2011) (“USF/ICC Transformation Order”). 6 See WCB Reminds Connect America Fund Phase II Applicants of the Process for Obtaining Federal Designation as an Eligible Telecommunications Carrier, WC Docket Nos. 09-197, 10-90, Public Notice, DA 18-714, at 3-4 (rel. July 10, 2018) (“FCC ETC Procedures Notice”). 7 In the Matter of Lifeline and Link Up Reform and Modernization, et. al., WC Docket No. 11-42, Report and Order, FCC 12-11, para. 229 (Feb. 6, 2012).

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As required by 47 C.F.R. § 54.405, Applicant will provide Lifeline to qualifying low- income consumers and publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service. C. Service and Performance Quality Requirements Pursuant to 47 C.F.R. § 54.202(a)(1)(i), Applicant certifies that it will comply with the service and performance requirements applicable to the support that it receives, including the performance requirements and deployment milestones associated with RDOF support. Further, Applicant will comply with all applicable state and federal consumer protection and service quality standards associated with the receipt of RDOF support. As noted above, the FCC previously decided that similar service milestones and reporting requirements warranted waiver by the FCC of its five-year plan requirement in Section 54.202(a)(1)(ii) of its rules. For these same reasons, and the extent deemed applicable by the Commission, Applicant requests that the Commission waive any similar requirements relating to the submission of a five-year improvements and upgrades plans or other similar plans. D. Emergency Situation Functionality Pursuant to 47 C.F.R. § 54.202(a)(2), Applicant certifies that it will have sufficient back-up power to remain functional without an external power source in emergency situations, will be able to reroute traffic around damaged facilities, and will be able to manage traffic spikes resulting from emergency situations. At the user level, Applicant will offer a 24-hour battery back-up option for user equipment that will provide the ability to make phone calls in the event of a power outage. At the system level, Applicant is building redundancy into the network. For example, every user will have multiple satellites in view with which it can communicate. Additionally, every satellite will have multiple gateway sites in view with which it can communicate. The Starlink traffic routing system ensures that every user is served with bandwidth before users demanding more bandwidth get additional throughput assigned, which gives the Starlink network robustness in the event of emergencies requiring high throughput. In addition, ETCs are required to provide access to the emergency services provided by local government or other public safety organizations, such as 911 and enhanced 911, to the extent the local government in an ETC’s service area has implemented 911 or enhanced 911 systems. Applicant will satisfy this requirement by providing 911 and E911 for all of its customers, to the extent the local governments in its Service Area have implemented 911 and E911. E. Advertising As required by 47 U.S.C. § 214(e)(2) and 47 C.F.R. § 54.201(d), Applicant will advertise the availability and rates of each of the supported services and the availability of Lifeline benefits throughout its ETC Service Area by media of general distribution. Applicant agrees to comply with all advertising form and content requirements that are promulgated by the FCC or by the Commission, currently or in the future, and required of all similarly designated ETCs. F. Public Interest Whether Applicant’s proposal is consistent with the public interest is the one area of contention with Applicant’s ETC Application. Overall, Applicant maintains that its

8 21-0005 designation as an ETC in the Service Area will serve the public interest by ensuring that Applicant is eligible to receive federal USF support, including the RDOF support won through Auction 904, and expand broadband coverage in and throughout the Service Area in Illinois. As described above, Applicant has been provisionally awarded $885 million in federal support over ten years in 35 states. In Illinois, Applicant has been provisionally awarded $8,325,104, which will benefit the citizens in the Service Area. The FCC has determined that the voice and broadband services Applicant will deploy through RDOF support will advance the goal of RDOF to “ensure continued and rapid deployment of broadband networks to unserved Americans.”8 RDOF support will allow Applicant to accelerate service for those who need it most and prioritize deployment to the underserved in the Service Area. Specifically, Applicant asserts that an ETC designation will benefit users in Illinois by enabling Applicant to utilize RDOF support to take the following actions: • Accelerate production of satellites and customer premises equipment. RDOF support will allow Applicant to accelerate production of its satellites and customer premises equipment. This additional production will result in an acceleration of capacity deployment and more terminals at lower cost for those living in underserved areas. • Target gateway deployment. Applicant is already deploying an extensive gateway infrastructure network designed to allow service in major markets across the country. Yet, the same market forces that drive the placement of these gateways also drive the deployment of purely terrestrial networks. With RDOF support, Applicant will be able to activate gateway sites in thinly populated areas of the country where their use could not otherwise be justified. This support would mean faster deployment and better service for people in otherwise underserved areas. • Dynamic allocation of capacity. RDOF support will allow Applicant to allocate dynamically deployable capacity to the underserved areas that need it most. Under the terms of the RDOF program, Applicant will hold back a portion of its system capacity that could otherwise be sold to locations outside of the RDOF program, so that high-quality internet service can be provisioned to supported locations in the Service Area that do not currently have access to 25/3 Mbps broadband service within ten days of receipt of any order. The specific area of contention relates to Staff’s opinion that Applicant’s contemplated charge for the customer premises equipment is simply too high for any consumer in the subject census blocks to afford. Applicant disagrees with Staff’s opinion and contends that its business plan is reasonable and not inconsistent with the public interest. Applicant refers to the customer premises equipment sent to customers as the Starlink Kit. The Starlink Kit includes the Starlink antenna, wi-fi router, power supply, cables, and mounting tripod. The Kit is sent directly to the consumer and is intentionally designed to be very easy to set up. Because customers set up Starlink Kits themselves, there is no installation charge. SpaceX currently charges each of its customers a single,

8 RDOF Auction Procedures PN, at ¶ 5.

9 21-0005 upfront cost of $499 for the equipment. The same equipment will enable Applicant’s customers to receive BIAS as well as VoIP telephone service on a bundled or standalone basis. There is no minimum service term. Customers can cancel service at any time. If a customer cancels service within 30 days of shipment of the Starlink Kit and returns it, they receive a full refund of the $499. Starlink Ex. 1.0 at 2-3. Through its beta offering of service, Applicant points out that SpaceX has been able to avoid long-term customer contracts with hidden fees and high early termination fees by charging this upfront equipment fee. SpaceX allows its customers to purchase its equipment outright, rather than imposing never-ending “lease fees” that can leave the customer paying more over time than the actual cost of the equipment. Starlink Ex. 1.0 at 3. Despite Applicant’s intention to minimize what customers pay for the Starlink Kit by simply charging once for the equipment at the time service is initiated, Staff opposes this plan based on the opinion that the planned charge is “prohibitively expensive.” Staff Ex. 1.0 at 22. Specifically, Staff points to the $499 charged by SpaceX for the Starlink Kit and opines that many customers, especially the low-income customers, will be unable to afford service from Applicant. Id. To address its concerns, Staff offers a primary recommendation and an alternative recommendation. Staff’s primary recommendation, as Applicant understands it, is to require Applicant to provide customers in the designated census block groups the option of leasing the Starlink Kit and to use RDOF funding to offset the cost of that leasing. Staff’s alternative recommendation is to prohibit Applicant from charging more than $240 for the Starlink Kit, use RDOF funding to offset the equipment cost, and provide customers an option to finance the $240 over 24 months by paying $10/month. Id. at 24-25. Applicant asserts that it and SpaceX are conscientious of the demands on individuals’ and families’ limited resources. Starlink Ex. 1.0 at 5. Applicant points out that the current equipment charge is significantly less than SpaceX’s actual cost of producing the equipment in the Starlink Kit. Id. at 3-4. The business decision to charge less than the production cost is in part due to concern over customers’ means. Moreover, the fact that during the beta offering of the service SpaceX has obtained thousands of customers across the United States charging $499 for the Starlink Kit contradicts Staff’s opinion that the equipment is prohibitively expensive for many customers. Application, ¶¶7, 9. Applicant contends that the lack of objective information supporting Staff’s affordability concerns makes it difficult to justify dictating how Applicant can assess equipment charges. Applicant points out that Staff offers no specific comparisons with other equipment or lease charges to demonstrate that Applicant’s equipment charge is extreme. Staff generally refers to the undefined cost of a modem from other bidders for the census blocks awarded (through SpaceX) to Applicant (Staff Ex. 1.0 at 23-24), but there is no discussion or comparison of the specific bids which resulted in Applicant’s selection by the FCC. Even if Staff did address specific modem costs, Applicant contends that comparing a simple modem to satellite terminal equipment to criticize the cost of the latter is an apples to oranges comparison and does not supply a reasonable basis to conclude that granting Starlink’s ETC designation as proposed would not be in the public interest.

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At the evidentiary hearing, Applicant observes, Staff characterized Applicant’s equipment charge as an “outlier among the several RDOF-related ETC dockets pending before the Commission. But again, Staff offered no specific evidence that Starlink’s one- time equipment charge rendered its ETC application against the public interest. Moreover, Applicant continues, when asked whether Staff had explicitly inquired into each ETC applicants’ equipment charges, Staff’s witness responded that he had not. Applicant recognizes that Staff’s outlier criticism may be related to its single service tier offering, as that was also raised at the evidentiary hearing. Tr., X. Based on SpaceX’s bids in the RDOF auction, Applicant’s RDOF supported service tier is 100 megabits per second download (“Mbps”) and 20 Mbps upload speed, which is termed by the FCC as the “Above Baseline” tier.9 Applicant relates that Auction 904 was structured to bring the highest-speed broadband to underserved areas and SpaceX offered to do that at the lowest amount of support in the areas that it won. Staff’s criticism of Applicant’s single high-speed, low-latency offering, however, suggests that low-income customers prefer or should only be offered lower service tiers. Applicant disagrees, which is why it will provide the same high-quality service to all customers. In addition, Applicant states that the Commission should recognize that lower service tiers are likely to become obsolete sooner as technology evolves. Applicant notes that Staff’s recommended solutions to its affordability concerns lack support as well. As explained in Starlink Exhibit 1.0 at 12, Applicant understands that Staff’s primary recommendation is to allow customers to lease the equipment for an unspecified amount apparently for as long as they take service. This is precisely the situation that Applicant says that it is trying to avoid and believes that it is in customers’ interests to do so. To demonstrate its point, Applicant states that many services, like cable television, charge customers a monthly equipment fee. That fee is charged every month no matter how long a customer takes service through that equipment. At some point, Applicant observes, the customer has paid the cost of the equipment but will nevertheless continue to pay that monthly equipment fee. But under Applicant’s plan, once the equipment is paid for, the customer stops paying for the equipment. Depending on the amount of the monthly lease fee, Applicant could collect more than $499 in a short span of time, which conflicts with Staff’s reasons for proposing the equipment loan. Applicant observes that Staff does not address the lease option’s inconsistency with its affordability concerns, how it will impact customers in the long term, or how it is in the public interest. Applicant asserts that Staff’s alternative recommendation suffers from a similar lack of support. While it is obvious that $240 is less than $499, Staff does not explain why $240 is an appropriate cap on the charge for the Starlink Kit, particularly in light of SpaceX’s production costs. From what Applicant can tell, Staff appears to believe that $240 is more consistent with the public interest simply because it is less than $499. Applicant notes that Staff offers no evidence that $240 is within the means of the low- income customers it is concerned about.

9 See https://auctiondata.fcc.gov/public/projects/auction904/reports/assigned_bids. The FCC defines the “Above Baseline” tier as speeds ≥ 100/20 Mbps. 47 CFR 54.805(b)(3); Rural Digital Opportunity Fund et al., WC Docket No. 19-126 et al., Report and Order, 35 FCC Rcd. 686, 696, para. 45 (2020).

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Both of Staff’s recommendations suffer from additional flaws, according to Applicant. The first flaw relates to Staff’s contention that all customers within the census blocks for which Starlink seeks an ETC designation should be able to lease the equipment or benefit from a $240 cap on the equipment charge. Tr. at X. In other words, Applicant understands that it is Staff’s opinion that a one-time charge of $499 for the Starlink Kit is simply too expensive for all customers and must be avoided. Applicant points out that Staff offered no evidence that all residents of the subject census blocks qualify as low- income or otherwise cannot afford a Starlink Kit. The second flaw relates to Staff’s opinion that Applicant should use RDOF support to offset the cost the Starlink Kit for customers. Applicant questions whether it is permissible to use RDOF support to offset the cost of customer premises equipment for customers of all income levels. Applicant contends that Staff has offered no authority indicating that RDOF support can be used in this manner. Applicant urges caution in this regard because it is concerned that such a condition could conflict with FCC RDOF program rules. In the situation at hand, Applicant asserts that Staff has provided nothing more than an opinion to justify its affordability concerns and proposes that the Commission, apparently for the first time, regulate the price for an unregulated optional equipment offering based only on opinion. Furthermore, under Section 10-201 of the Public Utilities Act, 220 ILCS 5/1-101 et seq., Applicant observes that the Commission’s decisions must include findings supported by substantial evidence. “Where the Commission fails to set out findings supporting its decision, or if the findings are not based upon evidence in the record, the order is to be set aside. Cerro Copper Prods. v. Ill. Commerce Comm'n, 83 Ill. 2d 364, 370 (1980). Because the record lacks any evidence supporting Staff’s opinion, Applicant contends that there is no evidence to support a finding that the one-time equipment charge is not in the public interest. Applicant recognizes that under Section 254(b)(3) of the 1996 Act and Section 54.805(a) of the FCC rules, it has an obligation to provide service and usage capacity that is reasonably comparable to comparable offerings in urban areas, at rates that are reasonably comparable to rates for comparable offerings in urban areas. Based on those requirements, Applicant commits to selling equipment to customers in Illinois at the same price, regardless of their location or whether they are Lifeline or non-Lifeline customers. Applicant submits that granting its ETC Application will: (1) promote the deployment of advanced services to unserved and underserved areas in Illinois in an efficient manner; (2) ensure that RDOF support is used efficiently and effectively with minimal impact to the size of the fund; and (3) provide customers in the designated area a choice of service that is currently not available and not likely to be available absent the grant of this Application. Even those customers who choose not take service from Applicant are apt to benefit from Applicant’s presence in the competitive market. The FCC required that bidders in Auction 904 demonstrate their ability to efficiently offer services through the competitive bidding process, while in their short and long form applications, bidders demonstrate their ability to meet their public interest obligations. Through this process, Applicant contends that the FCC conducted the cost benefit analysis for ETC designation. It is further notable, Applicant continues, that the RDOF is part of an ongoing effort to bridge the digital divide in the United States and focus limited universal service funds on underserved areas that need the most support. RDOF Phase

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1 prioritized the areas of the United States where access to low latency high speed internet access is the most limited. This includes, Applicant asserts, the portion of Illinois that comprises the area at issue. Applicant notes that the FCC identified it as the winning bidder in the identified census blocks.10 Applicant states that the lack of conditions related to the Starlink Kit in other jurisdictions is also indicative of Applicant’s proposal being consistent with the public interest. The public interest requirement under the 1996 Act and the FCC’s rules is the same in each state. Applicant has applied either to the FCC11 or the relevant state commission12 for an ETC designation in 35 states. Starlink Ex. 1.0 at 8. Applicant plans to assess the same equipment charge in every state. Id. at 9. As of the April 26, 2021 evidentiary hearing in this matter, five states had voted to approve Applicant’s designation as an ETC: Colorado, Idaho, Kentucky, Maryland, and South Carolina. Id. at 9. Applicant has requested that the Commission take administrative notice of the fact that since the evidentiary hearing three additional states, New Jersey, Vermont, and Wyoming, have designated Applicant an ETC. Starlink Initial Brief (“IB”) at 14; Starlink RB at 5. In addition, in Utah and Nevada, Applicant reports that it has entered into stipulations resolving those proceedings without any conditions relating to equipment cost. Starlink Ex. 1.0 at 9. Applicant states that the FCC has not raised any issues related to the cost of customer premises equipment in connection with Applicant’s long-form application or application for ETC designation. Id. Although Staff contends that the Commission has discretion to determine what is consistent with the public interest in Illinois (Staff Exhibit 1.0 at 12-13), Applicant points out that Staff provides no evidence that what constitutes the public interest in Illinois is any different in any other state. Notably, when asked whether low-income customers in Illinois earn less than low-income customers in other states, Staff did not know. Tr. at X. Thus, Applicant contends that the record reflects nothing to justify treating Applicant differently in Illinois. Rather than the Starlink Kit equipment charge being an outlier, Applicant asserts that it is Staff’s position that is the outlier. Although Applicant believes its proposal is consistent with the public interest, it is willing to agree to conditions relating to the charge for the Starlink Kit. Specifically, to demonstrate that it does not intend to make a profit from the sale of its equipment to low- income customers, Applicant is willing to commit to selling the Starlink Kit to customers in Illinois who are qualified to participate in the Lifeline program at the lower of (1) the prevailing price charged to non-Lifeline customers or (2) an amount that is equal to

10 In addition, in its Report and Order in Docket No. 96-45, In the Matter of Federal-State Joint Board on Universal Service, 2005 WL 646635 (F.C.C. 05-46), the FCC stated in ¶59, “… the public interest analysis for ETC applications for areas served by rural carriers should be more rigorous than the analysis of applications for areas served by non-rural carriers.” Because the census blocks Applicant seeks to serve are in Cook, DuPage, and Lake counties, Applicant submits that a less rigorous public interest review is warranted. 11 Applicant has applied for an ETC designation from the FCC for census blocks in Alabama, Connecticut, Florida, New Hampshire, New York, North Carolina, Tennessee, Virginia, and West Virginia. 12 The states in which Applicant directly applied for an ETC designation are Arkansas, California, Colorado, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Jersey, New Mexico, Oregon, Pennsylvania, South Carolina, Utah, Vermont, Washington, and Wyoming.

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SpaceX’s cost to produce the equipment. Applicant is also willing to give Lifeline customers the option of paying this amount over a two-year period. For example, at the anticipated price of $499, Lifeline eligible customers would have the option of paying for the equipment over a 24-month period, at $20.80 per month. This proposal is similar to Staff’s alternative recommendation to allow customers to pay for the Starlink Kit at a fixed monthly payment over a 24-month period; the only difference is that the monthly charge is approximately $10 more. Starlink Ex. 1.0 at 10-11. Applicant cautions, however, that the relatively minor difference in cost between Applicant’s commitment and Staff’s condition should not be construed to suggest that Staff’s alternative $240 recommendation is reasonable. Rather, whereas Staff’s condition is based on an opinion without support, the $499 charge for the Starlink Kit is the result of a business decision that considered how much of SpaceX’s production costs it is willing to forego recovery of through unregulated sales of equipment facilitating a service geared toward unserved and underserved areas. Considering there are no minimum contract periods or termination fees, Applicant is taking an economic risk that customers will like the service and choose to continue to subscribe. Id. at 11. In light of Staff’s findings unrelated to equipment charges, the commitments Applicant is willing to make in relation to equipment charges, Applicant’s agreement to nine of the ten conditions Staff proposes, and the lack of any evidence supporting Staff’s remaining condition, Applicant respectfully requests that the Commission find that its ETC Application is consistent with the public interest and grant Applicant’s requested ETC designation. V. STAFF’S POSITION Staff notes that, while Starlink’s offering might well be described as innovative, as is often the case with innovations, it is expensive; as noted above, a customer cannot even obtain the service without first purchasing a device that costs almost $500. The price of the customer premises equipment is high, and likely prohibitively high for low-income customers. Staff Ex. 1.0 at 21. Further, Staff points out that the equipment is not a prudent expenditure of money because the value is less than its price. Id. Finally, Staff argues that designation of Starlink locks up funding for 10 years that may never result in a single customer subscribing with Starlink. Id. Of these concerns, the first is of the greatest importance in Staff’s view. Staff notes that the FCC regulates the maximum charges to customers of voice and broadband offered by ETCs. Staff Ex. 1.0 at 21. Staff further notes that the 1996 Act requires that these providers charge rates in rural areas that are reasonably comparable to those in urban areas. 47 U.S.C. §254. Staff points out that every year, the FCC calculates an urban rate survey which calculates the average rates for urban residential voice service. Staff Ex. 1.0 at 21. By rule, the FCC requires ETCs to charge no more than two standard deviations above that number. Id. For broadband providers, the Urban Rate Survey sets benchmarks for the maximum those providers may charge for various levels of service. Id. The cost of required customer equipment, while not to Staff’s knowledge a matter regarding which the FCC offers guidance with respect to ETC designation, is nonetheless an integral part of a customer’s ability and willingness to enroll for service. Staff Ex. 1.0

14 21-0005 at 22. First, Staff points out that Starlink’s service cannot be obtained or provisioned without the customer equipment. Id. Further, it seems to Staff likely that a customer will evaluate the service offering, including the need for and cost of any equipment, along with the prices charged on a monthly basis. Id. In Staff’s opinion, the primary point of the FCC’s pricing limits is to make communications services affordable for rural customers. Id. As Staff observes, Starlink proposes to charge its customers a $499 customer equipment charge before it will provide service to a customer. Staff Ex. 1.0 at 22. In Staff’s opinion, that will be prohibitively expensive for many customers, especially the low- income customers that Starlink is mandated to serve. Id. Staff witness Sackett adds that there is a direct connection between the number of people that sign up for RDOF-subsidized services and the public interest. Staff Ex. 1.0 at 22. Mr. Sackett observes that if consumers do not sign up, the public will realize little or no benefit from the service and from the publicly-funded high-cost subsidies the Company obtains from the RDOF. Id. at 23. Accordingly, in Mr. Sackett’s opinion, the public interest requires that the total offer price be sufficiently affordable that customers are willing to sign up for it. Id. Even if Starlink offers equipment at less than its ostensible cost, Staff considers this irrelevant to the extent that customers cannot afford the equipment. Id. at 24. Staff offers an illustration of the affordability issue with respect to low-income customers is as follows: the poverty level for a three-person household, as set by the U.S. Department of Health and Human Services for 2020, was $21,720.13 135% of this sum is $29,322 ($21,720 multiplied by 1.35). Thus, to obtain service from Starlink, Staff notes that the wealthiest three-person household eligible for Lifeline service under Section 54.409(a)(1) of the federal rules would be required to spend approximately 1.7% of its annual household income simply to obtain customer premises equipment from Starlink, before it could obtain any actual service, which would cost that low-income household even more. Staff considers this an unrealistic thing to expect of low-income customers – as Mr. Sackett observes, it is likely that low-income customers will have more pressing uses for that money such as medical care, food or a computer to use with the internet service. Staff Ex. 1.0 at 24. Staff points out that Starlink appears to have given the affordability issue for low- income customers little thought or consideration. Staff argues that this is only exemplified by the fact that Starlink has not conducted any studies or research regarding whether low-income customers are likely to purchase the customer premises equipment and sign up for service. Staff Cross Ex. 1.0 at 10. While it is prepared to offer rent-to-own financing of the equipment (Id. at 8) ownership of the equipment has no value without being able to purchase the service. In essence, Staff argues that Starlink proposes a Lifeline offering that is unaffordable to low-income customers, which in effects means that it is unprepared to offer a Lifeline service at all. As Starlink is required to do so by rule as a condition of ETC designation, see 47 C.F.R. §54.401. Staff argues that the Commission should not

13 https://aspe.hhs.gov/2020-poverty-guidelines (accessed April 28, 2021)

15 21-0005 designate it as an ETC, other than subject to certain conditions proposed by Staff, as follows: 1. As a condition of receiving ETC designation from the Commission, Starlink Services must either (1) provide customers residing in the unserved census block groups in which it is awarded funding in Auction 904 with the option of leasing Starlink Services’ customer premises equipment with the cost of that leasing offset by the RDOF funding or (2) limit the up-front price of the customer premises equipment to no more than $240 while offering a financing option with 24-monthly payments of $10, as directed by the Commission; 2. Starlink Services should comply with all applicable federal and state statutes and rules affecting Lifeline ETC status and obligations; 3. Starlink Services should comply with all commitments made in its Application, direct testimony and discovery; 4. Starlink Services’ designated ETC service area should include those census blocks identified in Exhibit 2 to Starlink Services’ Application; 5. Starlink Services should report, within this docket, all denials of Lifeline service requests from eligible customers in its designated ETC service area within thirty (30) days of such denial of service. The report should include the date of the denial of Lifeline service and the reason for the denial; 6. Starlink Services should report, within this docket, any changes in rates for its Lifeline offerings in Illinois. The report should include a description of the rate change; 7. Starlink Services should file, as reports within this docket on the dates it files such reports with the FCC, copies of any and all annual reports showing the number of subscribers de-enrolled for non- usage that it files with the FCC pursuant 47 C.F.R. § 54.405(e)(3); 8. Starlink Services should file, as reports within this docket on the dates it files such reports with the FCC, copies of any and all annual outage and general quality of service information that it files with the FCC pursuant 47 C.F.R. § 54.422(b); 9. Starlink Services should file, as reports within this docket on the dates its files such reports with the FCC, a copy of any and all audit reports filed with the FCC pursuant to 47 C.F.R. § 54.420(b); 10. Starlink Services should submit a notice within 30 days of the initiation of any ETC-related formal or informal investigation (including revocation or enforcement action) by the FCC, Universal Service Administrative Company (“USAC”), National Lifeline Accountability Database (“NLAD”), the National Verifier or any other regulatory body (including State Commissions) into the ETC or any affiliates (or immediately upon the ETC learning of the investigation

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if more than 30 days since the initiation of that investigation). Starlink Services should commit to provide upon request by the Commission or its Staff any and all documents related to those investigations as well as quarterly updates to these reports. In Staff’s view, these conditions and reporting requirements will provide some assurance, and provide information to assist the Commission in verifying, that Starlink Services will offer Lifeline services in Illinois in a manner that is consistent with the public interest, necessity, and convenience. Staff Ex. 1.0 at 26-27. Staff understands Starlink to argue that it is “conscientious of the demands on individuals’ and families’ limited resources” (Starlink IB at 6), but Staff sees no evidence of this. Starlink appears to have given the affordability issue for low-income customers little consideration. Starlink again states that the business decision to charge less than production cost is in part due to the concern over what customers can afford and references that it has obtained thousands of customers across the United States at the $499 pricing for the equipment kit. Starlink IB at 6. However, Staff notes that Starlink offered no evidence that the thousands of customers that have signed up for service were low-income customers. In fact, Staff points out that Starlink has not shown evidence of a single low-income customer who signed up for service. Further, Staff again points out that neither SpaceX nor Starlink conducted any studies or research regarding whether low-income customers are likely to purchase the customer premises equipment and sign up for service. Staff Cross Ex. 1.0 at 10. In order to protect the public interest, Staff maintains that its primary recommendation to allow Starlink Services to operate but require it to provide customers with the option of leasing its customer equipment in the unserved census block groups in which it is awarded funding in Auction 904 and to use RDOF funding to offset the cost of that leasing is appropriate. Staff points out that this will enable more customers to be able to afford the service by eliminating the upfront payment barrier and to allow customers the option of not buying equipment that may not have long-term value to them. Staff Ex. 1.0 at 24-25. Unfortunately, Staff notes that Starlink has mischaracterized Staff’s primary recommendation by insinuating that under Staff’s proposal, Starlink would charge some monthly fee that could make customers pay more than the cost of the equipment; specifically, Starlink alleges that Staff’s recommendation allows for the customer to continue paying a monthly equipment fee even after the customer has paid the cost of the equipment. Starlink IB at 10. Contrary to Starlink’s assertion, Staff never proposed any monthly charge because its primary recommendation is to use RDOF funding to offset the cost of leasing the equipment. Therefore, Staff’s primary recommendation is more affordable in any term and thus, more in the public interest than Starlink’s recommendation. Staff’s alternative recommendation would be to limit the price that Starlink Services is allowed to charge to something less onerous and more affordable and use the RDOF funding to offset the cost of the equipment; Staff suggests a cost equipment cap of $240 while also requiring a financing option with a 24-month payment of $10 per month. Staff Ex. 1.0 at 25. However, Starlink also rejects Staff’s alternative recommendation based on a business decision that considered the Company’s production cost. While rejecting Staff’s alternative recommendation, Starlink recommends a fixed monthly payment at

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$20.80 per month, a difference of more than $10 above Staff’s recommendation. Starlink IB at 10. Starlink argues that this a ‘relatively minor difference in cost’ when comparing it to Staff’s alternative recommendation. Id. at 10. Starlink’s alternative proposal ultimately highlights that the cost to the business is more important than lowering the cost to low income consumers; to put it another way, Starlink deems that it is more significant that it receives the $10.80 per month from consumers, including low income customers, in addition to the $8.3 million it will receive in Illinois funding, rather than consumers paying $10.80 less per month. Lastly, Staff notes that Starlink raises a new issue in its Initial Brief related to Staff’s recommendation to use RDOF support to offset the cost of customer premise equipment. Starlink IB at 11. Specifically, Starlink “urges caution …because it is concerned that such a condition could conflict with FCC RDOF program rules.” Id. While Starlink did not raise this issue in its direct testimony, Staff notes that Starlink is absolutely required to deploy service at specified latencies and speeds in the areas in which it has obtained support. 47 U.S.C. §§54.802, 54.805, 54.806. Accordingly, Staff notes that Starlink is required to do something that cannot be accomplished without deployment of customer premises equipment, without which service cannot be obtained by any customer. Further, Starlink is not required to charge anything for customer premises equipment – it has elected to. VI. COMMISSION ANALYSIS AND CONCLUSION The FCC places the burden of proof on the ETC applicant to demonstrate that it has met all of the criteria that state commissions must consider when granting an ETC designation. With one exception, the Commission agrees with Staff’s recommendation that, subject to certain conditions described herein, Applicant has sufficiently demonstrated that it satisfies the federal and state requirements for designation as an ETC for the purpose of receiving USF support within Applicant’s proposed service area. In particular, Applicant has committed to the service requirements set forth in Section 54.101 of the FCC’s rules, which include offering voice-grade access to the PSTN, minutes of use for local service provided at no additional charge, emergency telephone network service (9-1-1) to the extent available, toll-limitation services to qualifying low-income consumers, Lifeline, and BIAS. Applicant will offer the supported services using its own facilities or a combination of its own facilities and resale of another carrier’s service. In light of these facts, the Commission finds that Applicant satisfies the requirements of Section 214(e)(1)(A) of the 1996 Act. Regarding functionality in emergency situations, at the user level, Applicant will offer a 24-hour battery back-up option for user equipment that will provide the ability to make phone calls in the event of a power outage. At the system level, Applicant is building redundancy into the network such that every user will have multiple satellites in view with which it can communicate. Additionally, every satellite will have multiple gateway sites in view with which it can communicate. The Starlink traffic routing system ensures that every user is served with bandwidth before users demanding more bandwidth get additional throughput assigned, which gives the Starlink network robustness in the event of emergencies requiring high throughput. The Commission is satisfied that Applicant’s network will continue to function in emergency situations.

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As for the service area to be covered by any ETC designation, the FCC relies on census block geography to define USF supported areas. Exhibit 2 attached to the Application identifies the census block groups for which Applicant seeks an ETC designation in this docket. The Commission supports the use of the listed census block groups as the designated ETC service area. Applicant has committed to advertise the supported services and to comply with all form and content requirements promulgated by the FCC or the Commission throughout the ETC census blocks. The Commission finds that these commitments satisfy the FCC’s advertising requirement. Finally, the Commission considers whether designation of Applicant as an ETC is in the public interest. The Commission takes note that the FCC determined that the benefits of increased consumer choice, the increased access, and the unique advantages of the applicant’s service offering are components of a public interest analysis. In this proceeding, Staff has also raised the affordability of Applicant’s service as a component of its public interest analysis. Specifically, Staff questions the affordability of Applicant’s one-time charge of $499 for the customer premises equipment necessary to take service from Applicant. Staff proposes a primary and alternative condition to address what it considers a prohibitively expensive charge for the Starlink Kit. Staff’s primary proposal is to allow customers in census block groups the option of leasing the Starlink Kit and to use RDOF funding to offset the cost of leasing. Staff’s alternative proposal is to charge the customers no more than $240 for the Starlink Kit and to allow the customer an option to finance the $240 over 24 months by paying $10 a month. Applicant objects to both of Staff’s solutions and proposes its own commitment to address Staff’s concerns. Staff, however, does not consider Applicant’s commitment sufficient. The Commission has considered the positions of Applicant and Staff on this single contested issue in this docket and will not repeat the arguments here. The Commission appreciates Staff’s concern for the plight of low-income consumers as well as for the affordability of the Starlink Kit for all consumers. The purpose of the Lifeline program is to provide service to low income consumers. However, Staff provided no basis for its position that all customers should receive the lease option or for the $240 price of the Starlink Kit that it recommended. Staff suggested that the $240 price is less onerous and more affordable and that Starlink should use the RDOF funds to offset the cost of the equipment The Commission finds that Staff’s option of the charge of $240 for the Starlink Kit is based on speculation and is not supported by the evidence in the record. While the Commission does express concern about the equipment costs, it will not adopt Staff’s recommendation concerning the charge for the Starlink Kit. However, most low-income customers would find it difficult to afford the equipment costs as part of receiving this service. Thus, the Commission partially agrees with Staff and finds that customers in Illinois who are qualified to participate in the Lifeline program should be allowed the option of leasing the equipment and that the Applicant should use RDOF funding to offset the cost of leasing. The Commission considers this reasonable and will require Applicant to abide by it as a condition for an ETC designation in place of that proposed by Staff. Based on the record, the Commission finds that Applicant has shown that its plans are consistent with the public interest. Overall, the Commission finds that Starlink’s ETC

19 21-0005 designation request should be granted, subject to Applicant’s commitment to the conditions described in the preceding paragraph as well as conditions 2 through 10 in Section V of this Order. Staff proposed conditions 2 through 10 and Starlink has agreed to abide by them as conditions to an ETC designation. VII. FINDINGS AND ORDERING PARAGRAPHS Having reviewed the entire record and being fully advised in the premises, the Commission is of the opinion and finds that: (1) Starlink is a Delaware limited liability company seeking an ETC designation covering certain census blocks within three counties in Illinois; (2) the Commission has jurisdiction over the subject matter herein; (3) the recitals of fact set forth in the prefatory portion of this Order are supported by the record and are hereby adopted as findings of fact; (4) Starlink has identified its intended service area for the desired ETC designation; (5) Starlink has demonstrated that it has the ability to provide service throughout its requested service area; (6) Starlink has demonstrated its ability to advertise throughout its requested service area; (7) Starlink has demonstrated its ability to remain functional in emergency situations; (8) Starlink has demonstrated its ability to satisfy applicable service quality standards; (9) Starlink has demonstrated that it will comply with applicable USF requirements; (10) Starlink has demonstrated that a grant of the requested ETC designation would be in the public interest; (11) the evidence in the record is sufficient to support the requested ETC designation; (12) Starlink’s Application for ETC designation is granted subject to Staff’s recommended conditions 2 through 10 as discussed in Section V herein and the condition described in Section VI herein; and (13) the request for ETC designation should be granted. IT IS THEREFORE ORDERED by the Illinois Commerce Commission that the Application of Starlink Services, LLC, requesting designation as an eligible telecommunications carrier for the purpose of obtaining Universal Service Fund support within the census block groups set forth in Exhibit 2 to the Application, is granted. IT IS FURTHER ORDERED that Starlink Services, LLC shall comply with the conditions described in the prefatory portion of this Order and referenced in Finding (12).

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IT IS FURTHER ORDERED that pursuant to Section 10-113(a) of the Public Utilities Act and 83 Ill. Adm. Code 200.880, any application for rehearing shall be filed within 30 days after service of the Order on the party. IT IS FURTHER ORDERED that subject to the provisions of Section 10-113 of the Public Utilities Act and 83 Ill. Adm. Code 200.880, this Order is final; it is not subject to the Administrative Review Law.

DATED: May 7, 2021 BRIEFS ON EXCEPTIONS DUE: May 12, 2021

Glennon P. Dolan, Administrative Law Judge

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