When applying for RDOF you say what service tier you are targeting and instead of shooting for the minimum 25/3, Starlink applied for 100/20. When they didn't reach those speeds[1], they were ineligible but not just because they didn't hit the required speeds on their existing network. There are more details here[2] but the jist is that Starlink bid to supply 100/20 internet to over half a million subscribers and the FCC was required to assess if Starlink was reasonably, technically capable of supplying those speeds by 2025. Starlink reportedly argued that once they can properly launch Starship, they can surely hit the required speeds. As of yet Starship hasn't had a successful launch. On top of this, the statistics that were available at the time showed that Starlink transfer speeds were already trending down and the network is a lot less utilized than it would be in 2025. There are technical challenges that need to be solved before Starlink is remotely capable of meeting that obligation and the challenges don't appear to be resolved yet. Giving Starlink money is a gamble and the FCC would rather play it safe.
>RDOF rules set speeds of 25/3 Mbps as the minimum allowed for broadband service delivered by winners. However, participants were permitted to bid at four different performance tiers: 25/3 Mbps, 50/5 Mbps, 100/20 Mbps and 1 Gbps/500 Mbps. When the auction closed, the FCC noted 99.7% of locations were bid at 100/20 or higher, with 85% bid at the gigabit tier. That means Starlink will need to provide speeds of at least 100/20 in order to meet its obligations.
1. https://www.fiercetelecom.com/broadband/what-do-starlinks-la...