‘Insane’ — UK Tech reacts to Gov moves that might hand UK startups contract to Barclays Bank

Tech Nation is trailing in second place in the race to remain the UK’s government-backed ‘startup champion’ after the latter put the £12 million contract out to tender, according to TechCrunch’s sources. First in line at this point in time – in a decision which is due in December – is banking giant Barclays. Tech Nation’s existing government funding runs until March 2023.

But the prospect of a profitable, global bank taking over the contract has been branded “insane” and “mad” by some key UK industry players.

On the weekend, The Sunday Times reported that government officials have been concerned that Tech Nation was “breaching state aid rules because it had failed to become self-sufficient” which led officials to put the contract out to tender earlier this year.

However, although the Times reported that Tech Nation had lost the contract, TechCrunch understands that the final decision has yet to be made. Plus, it’s understood that Tech Nation is intending to carry on ‘as is’, even without the government subsidy, supported by fundraising from sponsors, subscriptions and partners.

Barclays had applied for the contract through its network of Eagle Labs incubators, some of which have physical locations, but most do not.

It’s thought this, if patchy, nationwide-presence is helping to woo the government in its so-called “levelling-up” agenda as it seeks to boost more start-ups outside London.

If successful, Barclays would also be able to administer the Home Office’s digital visa scheme, though it’s unlikely to have a monopoly on this.

Again, it’s been erroneously reported that Tech Nation would lose this capability. The £12m funding and the operation of the Visa scheme are in fact separate issues, and the final government decision will have no baring on Tech Nation’s role, designated by the Home Office, to endorse the Global Talent Visa.

Tech Nation has long been embedded in the UK tech startup scene. Tech City UK, its predecessor, was launched in 2011 by former prime minister David Cameron and concentrated largely on the London ecosystem until 2018 when it merged with Tech North (based in Manchester). It’s since gone on to run a myriad of programmes connecting tech startups and scale-up with each other and with investors in the UK and abroad.

The non-profit is chaired by Lord (Jo) Johnson (Boris Johnson’s brother) and chaired by former Sage boss Stephen Kelly.

Gerard Grech, chief executive of Tech Nation, said the body’s work represented a “£15 return on every £1 invested by the government.”

In a statement he told me: “We’ve supported over 4,000 tech companies from around the U.K. More than 30% of the UK’s 122 tech unicorns (eg Monzo, DarkTrace) have graduated from a Tech Nation programme (49 in total to date). Some 44% of the UK’s decacorns graduate from a TN non-dilutive accelerator growth programme (failure rate is less than 5% thus far).”

“Hundreds of tech firms have signed up to the Tech Zero pledge, co-founded with companies like Mozo and Olio, which commits tech companies to Net Zero. Our Libra growth programme shines a light on founders and leaders from under-represented sections of society as does the latest Diversity & Inclusion toolkit we recently launched for tech founders to help them develop a more diverse workforce,” he said.

“Today, Tech Nation’s work represents a £15 return on every £1 invested by the UK Government. This is one of the best ROIs for the taxpayer in the most strategic growth area of the economy,” he added.

Tech Nation’s recently published annual report said it could remain a going concern if government funding was withdrawn.

The industry has reacted, broadly speaking, with dismay that a massive global bank would be handed sole responsibility for supporting the UK’s tech startup ecosystem.

One source told City A.M. that the move was “like letting an arsonist teach kids about fire safety” given that the bank would have to support programmes for startups in the fintech space, putting it into a conflict of interest.

Another said the government has “effectively handed Barclays funds to acquire new customers” and was a “potential competitor or customer of the startups it’s meant to be supporting.”

Speaking to me on a condition of anonymity one investor called the government’s decision to put Tech Nation’s funding in doubt was “insane.”

“It’s mad. We need to shout this into oblivion. We can’t hand the support to the tech ecosystem to an incumbent bank! Everyone needs to know how mad this is,” he said.

Another VC told me the decision to put Barclays in the front-running for the contact was “like President Bush declaring ‘Mission Accomplished’ after the Gulf War, when the war was far from over. I don’t know what the government was thinking. I suspect this new government cares more about banking and financial services than tech.”

Brent Hoberman, founder of LastMinute.com and now head of FirstMinute Capital commented on LinkedIn: “[I] Have been a fan of Tech Nation and the hard work and impact they have had and the creativity to expand their role. It’s a tough job and the scrutiny that rightly comes with government money makes it especially hard to experiment. Barclays will need to find leverage to have more impact and scale.”

Ian Merricks, Managing Partner at White Horse Capital and Chair at The Accelerator Network, and a rival bidder for the Tech Nation contract said it was “hard to be more incensed at this use of public business growth support funding. I imagine the ‘winners’ have a larger lobbying function than we do, as a private sector consortium.”

Tanya Suarez, Founder & CEO | IoT Tribe, commented: “Surely this provides an unfair advantage and could be used to influence the founders choice of banker at several stages of growth. I wouldn’t be happy if I were any other UK high street bank or other financial institution that has been supporting founders over the years. Let’s not forget Barclays had a net operating income of £22 billion in 2021 and profits of £7 billion. If they really wanted to do this, they should carved out a minute amount of that to cover the £5-6M a year that they will receive… I don’t believe they need grant money to do it.”

Nichola Bates, Head of Global Accelerators and Innovation Programs at Boeing, said: “I don’t see how this makes sense for Barclays, or the eco-system. At £12m it probably costs Barclays more to bid for it. But surely this is work they would (and should) be doing anyway – without the need for Govt money?”

Grech said the decision was in the hands of the DCMS.

A DCMS spokesperson said: “No final decisions have been made. The successful grant recipient will be announced in due course.”

‘Insane’ — UK Tech reacts to Gov moves that might hand UK startups contract to Barclays Bank by Mike Butcher originally published on TechCrunch

FTC sets its sights on ‘unfair, deceptive, and anticompetitive practices’ in gig economy

The Federal Trade Commission is looking into the complex and potentially unfair economics and policies of the gig economy for “deceptive, unfair, and otherwise unlawful acts and practices.” Whether it’s forced arbitration, labor misclassification, or algorithmic pay and job distribution, the agency says it will go after any dubious tactics that hurt workers.

To be clear, a “statement of policy” like that issued today is not a new rulemaking or law. It is what it sounds like, but you might think about it more as a statement of priorities. The FTC has been aware of and indeed working against unfair labor practices in the gig economy for years — the salad days of exploitation (as of so many things) was before the pandemic, even.

But today’s circumstances and the particular pro-labor interests of this administration, and FTC Chair Lina Khan, mean it has climbed up the old to-do list by a few notches. (I’ve asked the FTC for a little more information on how they might put it, and will update his post if they get back to me.)

The policy statement itself, which you can download here, is a very straightforward enumeration of the various pros, cons, and actual cons involved in the gig economy. It’s only 17 pages and very readable (this isn’t a legal document, though it is copiously footnoted), but I’ll just bullet the main complaints here:

  • Control without responsibility: roles are often defined to maximize risk on the worker and minimize responsibilities or expenses by the employer.
  • Diminished bargaining power: a lack of transparency and decentralized work environment, and legal recourse waivers limit the ability of workers to take action against employers.
  • Concentrated markets: network effects and subsidized costs can stifle competition and lock workers into a handful of platforms.
  • Deceptive or unfair pay practices: misleading claims about pay structures and policies may lure workers under false pretenses or prevent accurate comparisons between opportunities.
  • Undisclosed costs or terms of work: fees and expenses associated with the work are frequently elided or downplayed, inflating apparent net pay.
  • Unfair or deceptive practices by an automated boss: automated distribution of work and pervasive surveillance can be misleading or manipulative, changing pay, ratings, or giving employers opportunities to push out unwanted workers.
  • Unfair contractual terms and restrictions on mobility: contracts are hardly ever negotiable, often barring workers from using competitors, speaking out, or suing.
  • Wage-fixing and coordination: gig economy companies may purposely or as an effect of shared market power lead to wage fixing, benefit reduction, and other coordinated anti-worker behavior across employers.
  • Market consolidation and monopolization: lessened competition may lead to monopolies, monopsonies, predatory pricing, etc in violation of antitrust laws.

The FTC does not name names, though a few come up in the footnotes, but it’s hard not to think of certain service providers when you read about things like deceptive pay practices. How many times over the last few years have we seen wage theft, suppression of employee complaints, coverups of crimes, and so on by billion-dollar gig economy companies?

One recent example Commissioner Rebecca Slaughter notes in a statement accompanying the policy:

In 2021, we brought suit against Amazon for allegedly keeping a portion of drivers’ tips. As alleged in the complaint, Amazon actively concealed its conduct and only stopped after becoming aware of the FTC’s investigation. The FTC recovered over $60 million from Amazon to pay back the more than 140,000 Amazon Flex drivers whose tips were withheld.

Amazon, (allegedly) exploiting their lowest tier of workers? Shocking! (Here’s some more details.)

It’s doubtful whether one of those “honest mistakes” or “accounting bugs” as they were no doubt spun at the time, would have led to any large charge or settlement. Sadly, due to the way these companies keep their policies and data proprietary, there is rarely much anyone can do beyond publicly shaming them to the point where consumers’ disgust overtakes their desire for grocery delivery.

Nevertheless, the FTC “will address any such harms through robust law enforcement, community outreach, and new initiatives to better understand and address the impact of emerging technologies in the gig economy and elsewhere on historically underserved communities.” It also just formalized a new partnership with the National Labor Relations Board, so this is a cross-agency effort.

Can you help? Why yes, you can: next time you see some weird practice, like “your tip has been rounded down and the remainder added to our slush fund!” you should report it here. The FTC is a reactive agency — its mission is to investigate complaints, and the more it has in a given area of the industry, the fatter the folder it has when it walks into the Justice Department lobby.

FTC sets its sights on ‘unfair, deceptive, and anticompetitive practices’ in gig economy by Devin Coldewey originally published on TechCrunch

Dear Sophie: Is there a way to keep working in the US after my J-1 visa expires?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

TechCrunch+ members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie,

I’m a Fulbright scholar on a J-1 visa. I’ve been told that after my J-1 ends, I’m required to return to my country for two years.

Is there a way I can stay in the U.S.? Can I apply for an O-1A or green card even if I have to go back to my country?

— Seeking to Stay

Dear Seeking,

Congrats on joining the ranks of the Fulbright scholars! This is a great accomplishment that will likely bolster an eventual green card application!

However, being a Fulbright scholar also comes with a cost: I have never seen a Fulbright Scholar get a 212(e) waiver for the J-1 two-year foreign residency requirement. (If you are a Fulbright scholar who got the waiver approved, please message me!)

I recently spoke with Anthony Pawelski, the senior international advisor at Mass General Brigham, which consists of 16 institutions including Harvard- and Tufts-affiliated teaching hospitals. In that role, Pawelski prepares thousands of J-1 and other non-immigrant visa applications each year, but he says he has only seen waivers granted to Fulbright scholars a few times. Even waiver requests for Fulbright scholars that were filed by NASA and the National Science Foundation have been denied.

Pawelski also notes that India will not support J-1 waivers for medical doctors educated in India, and that Thailand and the Philippines are very strict about supporting waivers.

Before I share more about your visa and green card options to work in the U.S. after your exchange visit ends, here’s a primer on the J-1 two-year home residency requirement, and the process to seek a waiver for those who are eligible. A word of caution: the J-1 is a non-immigrant intent visa, so people who intend to seek a green card or live permanently in the U.S. are denied J-1 visas.

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

Two-year home residency requirement

As you probably know, the J-1 educational and cultural exchange visa has several benefits, such as being open to individuals in a range of fields, and allowing a J-1 visa holder’s spouse to apply for a work permit. While its benefits can far outweigh the drawbacks, the biggest limitation of the J-1 is the one you’re facing: the two-year home residency requirement.

Dear Sophie: Is there a way to keep working in the US after my J-1 visa expires? by Ram Iyer originally published on TechCrunch

Dear Sophie: Can I start a company or a side hustle on a TN visa?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

TechCrunch+ members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

I’m a Canadian citizen working under a TN visa as a software engineer in the U.S. I want to start my own company or at least earn money through a side hustle. Is this possible on my TN, or is the only way I can do that via a green card? If so, is it possible to get permanent residence since the TN is for non-immigrant intent?

— Clever Canadian

Dear Clever,

There are many things that the modern U.S. immigration system was not designed for, including (but not limited to): the internet, e-filing and blockchain, working remotely, working from home, the modern gig economy, startups, flexible work arrangements, contractor work, and the gig economy.

You may know that our current system of laws was generally created by the Immigration and Nationality Act in 1952, back when everything was much simpler The legal history at play here includes judges making decisions about tailors from China sailing to San Francisco to take measurements for suits that would be sewn months later when they returned home.

I’ll get straight to the point: you cannot do any work under your TN for anyone other than the employer that sponsored you for the TN. So, my educational message is this: no side hustles or founding of startups while on your TN.

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

Two TN visas at the same time?

Yes, it’s possible. Under immigration law, you can have two TN visas at the same time — one from your current employer and one from another employer, say, your startup. However, this is very difficult to achieve, and comes with two very important caveats:

Dear Sophie: Can I start a company or a side hustle on a TN visa? by Ram Iyer originally published on TechCrunch

How tech giants are responding to the growing green card backlog

In early August, Amazon’s SVP of human resources, Beth Galetti, penned a blog post urging the U.S. Department of Homeland Security to expedite the processing of employment-based green cards.

The plea was, of course, self-serving — Amazon topped the list of companies applying for green cards in 2019 with 1,500 applications, according to U.S. Department of Labor data. But it did serve to spotlight that U.S. Citizenship and Immigration Services (USCIS) — the agency responsible for issuing green cards — is barreling toward a failure to adjudicate tens of thousands of applications before a September 30 deadline.

Green cards are highly sought after. Unlike temporary work visas (e.g., H-1Bs), they allow workers to freely switch jobs without losing their immigration status. In response to demand (and political pressure), Congress allotted 281,000 employment-based green cards in 2022, up from 262,000 in 2021. (The typical cap is 140,000.) But the pandemic — and restrictive laws under the Trump administration — threw an additional wrench in the largely manual, paper-driven process.

U.S. embassies and consular offices were temporarily closed, creating a long queue of appointments to collect fingerprints and photographs. Annual per-country caps didn’t help matters — according to the Cato Institute, about 875,000 approved petitions for green cards were waitlisted in 2021 because of the limits.

This year, the USCIS claims to have taken steps to expedite adjudication, telling Bloomberg Law in July that it shifted staff resources to prioritize processing green cards and adopted a “risk-based approach” to waive interview requirements. But it’s unclear whether this will be sufficient to prevent tens of thousands of green cards from going unused. As of July 31, the USCIS reported that it had adjudicated around 210,000 applications, leaving over 70,000 to be processed.

German startups could use more venture capital, but Germany’s government has a plan

Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here.

Reading recently about Germany’s 30 billion plan for its startups, I was intrigued. Did the country start to envy La French Tech? Is it hoping to rival post-Brexit U.K.? Perhaps both, but it also has a national goal — making sure that profits from homegrown successes stay home. Let’s explore. — Anna

Second, third, or eighteenth?

European startups have been weathering the venture capital downturn quite well, and funding declined only slightly in the second quarter compared to the first three months of 2022.

German startups, however, had it worse: According to EY, they collectively attracted 20% less capital in the first half of 2022 than during the same period last year. This includes private equity, but venture capital declined even more sharply, from €4.44 billion to €2.89 billion (which is roughly the same amount in U.S. dollars.)

Is the future of the microchip industry going to be Made in America?

Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here.

With all eyes on Taiwan and worries mounting around semiconductor supply, the U.S. CHIPS Act is particularly timely. But it is not unique: Other countries similarly aspire to reduce their reliance on imported chips. Let’s explore.Anna

From cheap as chips to billion-dollar incentives

U.S. president Joe Biden signed the CHIPS and Science Act of 2022 into law earlier this week after the bill received broad bipartisan support in the House and Senate.

The H and I in CHIPS stand for “Helpful Incentives,” hinting at the main component of the initiative: $52.7 billion in public subsidies.

Biden described the new bill on Twitter as “a once-in-a-generation law that invests in America by supercharging our efforts to make semiconductors here at home.”

FTC sets the wheels in motion for a major data privacy ruling

The Federal Trade Commission is warming up for a major ruling on data privacy and digital surveillance, a domain it has long enforced case by case but which has reached a stage of crisis it believes must be addressed more comprehensively. The announcement today is only the very earliest step in what could be a multiyear process, but better now than never, which until recently seems to have been the preferred timeline.

Today’s announcement is an “Advanced Notice of Proposed Rulemaking,” essentially the agency saying “we’re thinking about this seriously and are soliciting public input on the idea.” No actual rules are proposed; instead, there is an extensive list of questions that the agency hopes to answer in the process of writing the rules, and everyone from ordinary consumers to advocacy organizations like the EFF and ACLU are encouraged to weigh in.

Some questions may be more suited to legal experts (like what statute or mechanism to use in enforcement) while others need more anecdotal or grassroots-level responses, like whether children and teenagers are susceptible to and/or being targeted by certain manipulative data practices.

You can read the full list of questions here, any one of which is a veritable can of worms waiting to be opened up — part of the reason these rulemakings tend to take a long time.

One thing that doesn’t seem to be in question is the need for strong new rules. Chair Lina Khan summarizes the threat concisely (and with liberal use of em dashes — the mark of a refined mind) in her accompanying statement:

The data practices of today’s surveillance economy can create and exacerbate deep asymmetries of information — exacerbating, in turn, imbalances of power. And the expanding contexts in which users’ personal data is used — from health care and housing to employment and education — mean that what’s at stake with unlawful collection, use, retention, or disclosure is not just one’s subjective preference for privacy, but one’s access to opportunities in our economy and society, as well as core civil liberties and civil rights.

While the FTC already has authority to investigate and pursue companies and practices that break its more general rules, it must do so on a case-by-case basis, an approach that has borne some fruit but clearly has not dissuaded bolder actors from taking advantage of what must be considered a fairly lax regulatory environment.

But it is Commissioner Slaughter, who has pursued this idea for years now, who offers the most substantive justification for what the agency is attempting. The two Republican Commissioners both object to even beginning this proposed rulemaking process for the reason that they would prefer Congress pass a federal privacy rule (indeed it is considering yet another right now), and that the proposal is too broad.

“What we really need is strong federal privacy laws” has been the constant refrain of the status quo for years now whenever they oppose privacy laws at a smaller scope that might actually get passed, like the California Consumer Privacy Act. Yet even the most generous interpretation of this tactic, that they are letting the perfect be the enemy of the good, leads to a worse outcome for ordinary people. And a cynical interpretation of their motives (probably closer to the truth) suggests that, like broadband providers pushing back against net neutrality, their idealism is a facade for their self-interest.

Slaughter cuts right through this tangle of objections:

For years, Congress has nibbled around the edges of comprehensive federal privacy legislation; it is now engaged in the advanced stages of consideration of such legislation.

I not only welcome it — I prefer Congressional action to strengthen our authority. But I know from personal experience that the road for a bill to become a law is not a straight or easy one. In the absence of that legislation, and while Congress deliberates, we cannot sit idly by or press pause indefinitely on doing our jobs to the best of our ability.

The best time to initiate this lengthy process was years ago, but the second-best time is now. Effective nationwide rules governing the collection and use of data are long overdue. As the nation’s principal consumer-protection agency, we have a responsibility to act.

It seems from the context that the decisive and progressive leadership of Khan has provided an opportunity for Slaughter to pursue a years-long ambition to get started on these rules. And for those who say the FTC is biting off more than it can chew in attempting to regulate such a large, diverse, and fast-moving industry, she says this:

“Bigness,” if anything, should compel extra scrutiny of business practices on our part, not a free pass, kid gloves, or a punt to Congress.

The rules being mulled by the FTC may well end up being complementary or even superfluous to federal law, but that is only if by some miracle Congress can pass another major piece of legislation. But if this ends up being the case, consumers will simply be twice as safe.

What happens next is a lot of waiting and submitting of documents; the FTC put together a FAQ on the rulemaking process here, and on September 8 the agency will host a virtual public forum to discuss the proposal.

FCC denies Starlink’s application for $885M subsidy

The FCC has rejected the application of Starlink to provide broadband to rural America at a cost of $885 million over ten years, nullifying a tentative approval back in 2020. The agency said SpaceX, and another company initially awarded $1.3 billion, had “failed to demonstrate that the providers could deliver the promised service.”

The Rural Digital Opportunity Fund is a $9.2 billion long-term effort to subsidize the rollout of internet service in places where private companies have previously decided it’s too expensive or distant to do so. It was one of the most cherished projects of former FCC Chairman Ajit Pai, who for all his flaws seemed genuinely concerned with the “digital divide.”

At the time, companies could apply for small or large amounts to provide local or expansive services, and among the big early winners were Starlink and LTD Broadband, which applied for $885 million and $1.3 billion respectively to provide connectivity to regions in multiple states. Thousands of other applicants made smaller applications to fund more limited operations.

Since then the FCC has been evaluating whether these companies could follow through. In an email to TechCrunch, an FCC spokesperson explained that there was a lot of due diligence that needed to happen on both sides.

There were many steps following the initial announcement of winning bidders and a final determination on long-form applications. Winning bidders were required to demonstrate their financial, legal and technical ability to provide broadband service, and to fulfill public service obligations. These steps were intended to ensure that winning providers could actually deliver the services they signed up to provide, and that consumers would benefit from this use of universal service dollars.

LTD Broadband, for instance, was “a relatively small fixed wireless provider before the auction,” and its plan to suddenly become a billion-dollar operation practically overnight didn’t pan out. It failed to get carrier status in seven of the 15 states it had promised to serve, and the FCC determined the company “was not reasonably capable of deploying a network of the scope, scale, and size required by LTD’s extensive winning bids.”

Sounds like LTD wasted everyone’s time — but at least they only wasted their own money; the auction rules prevent a single dime from going out the door until the applicants receive final approval.

Starlink received a slightly less acerbic rejection, but it’s hard to sugar coat losing the best part of a billion dollars.

“Starlink’s technology has real promise. But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032,” said Chairwoman Jessica Rosenworcel in a press release.

This rejection is somewhat late in the coming, as such large amounts and proposals require extra scrutiny. But hundreds of other providers have received some $5 billion to bring broadband to millions of locations across 47 states since the plan went live. Somewhere, Ajit Pai smiles and nods.

FCC denies Starlink’s application for $885M subsidy

The FCC has rejected the application of Starlink to provide broadband to rural America at a cost of $885 million over ten years, nullifying a tentative approval back in 2020. The agency said SpaceX, and another company initially awarded $1.3 billion, had “failed to demonstrate that the providers could deliver the promised service.”

The Rural Digital Opportunity Fund is a $9.2 billion long-term effort to subsidize the rollout of internet service in places where private companies have previously decided it’s too expensive or distant to do so. It was one of the most cherished projects of former FCC Chairman Ajit Pai, who for all his flaws seemed genuinely concerned with the “digital divide.”

At the time, companies could apply for small or large amounts to provide local or expansive services, and among the big early winners were Starlink and LTD Broadband, which applied for $885 million and $1.3 billion respectively to provide connectivity to regions in multiple states. Thousands of other applicants made smaller applications to fund more limited operations.

Since then the FCC has been evaluating whether these companies could follow through. In an email to TechCrunch, an FCC spokesperson explained that there was a lot of due diligence that needed to happen on both sides.

There were many steps following the initial announcement of winning bidders and a final determination on long-form applications. Winning bidders were required to demonstrate their financial, legal and technical ability to provide broadband service, and to fulfill public service obligations. These steps were intended to ensure that winning providers could actually deliver the services they signed up to provide, and that consumers would benefit from this use of universal service dollars.

LTD Broadband, for instance, was “a relatively small fixed wireless provider before the auction,” and its plan to suddenly become a billion-dollar operation practically overnight didn’t pan out. It failed to get carrier status in seven of the 15 states it had promised to serve, and the FCC determined the company “was not reasonably capable of deploying a network of the scope, scale, and size required by LTD’s extensive winning bids.”

Sounds like LTD wasted everyone’s time — but at least they only wasted their own money; the auction rules prevent a single dime from going out the door until the applicants receive final approval.

Starlink received a slightly less acerbic rejection, but it’s hard to sugar coat losing the best part of a billion dollars.

“Starlink’s technology has real promise. But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032,” said Chairwoman Jessica Rosenworcel in a press release.

This rejection is somewhat late in the coming, as such large amounts and proposals require extra scrutiny. But hundreds of other providers have received some $5 billion to bring broadband to millions of locations across 47 states since the plan went live. Somewhere, Ajit Pai smiles and nods.