U.S. BEAD overhaul to benefit Starlink/SpaceX at the expense of fiber broadband providers
The U.S. The Commerce Department is examining changes to the NTIA’s $42.5 billion broadband funding bill (Broadband Equity Access and Deployment- BEAD), which endeavors to expand internet access in underserved/unserved areas. [BEAD was part of the 2021 Infrastructure Investment and Jobs Act (IIJA) during the Biden administration] The proposed new rules will make it much easier for Elon Musk owned Starlink satellite-internet service, to tap in to rural broadband funding, according to the Wall Street Journal.
Commerce Department Secretary Howard Lutnick said that BEAD will be revamped “to take a tech-neutral approach that is rigorously driven by outcomes, so states can provide internet access for the lowest cost.” The department is also “exploring ways to cut government red tape that slows down infrastructure construction. We will work with states and territories to quickly get rid of the delays and the waste. Thereafter, we will move quickly to implementation in order to get households connected. All Americans will receive the benefit of the bargain that Congress intended for BEAD. We’re going to deliver high-speed internet access, and we will do it efficiently and effectively at the lowest cost to taxpayers.”
By making the broadband the grant program “technology-neutral,” it will free up states to award more funds to satellite-internet providers such as Starlink, rather than mainly to companies that lay fiber-optic cables which connect the millions of U.S. households that lack high-speed internet service.
The potential new rules could greatly increase the share of funding available to Starlink. Under the BEAD program’s original rules, Starlink was expected to get up to $4.1 billion, said people familiar with the matter. With Commerce’s overhaul, Starlink, a unit of Musk’s SpaceX, could receive $10 billion to $20 billion.
“The Trump administration is committed to slashing government bureaucracy and harnessing cutting-edge technology to deliver real results for the American people, especially rural Americans who were left behind” under the Biden administration, White House spokesman Kush Desai said.
“Leave it alone; let the states do what they’ve done,” Missouri State Rep. Louis Riggs, a Republican, said in a recent interview. “The feds could not do what the states have done. In 10 or 15 years, all they basically did, they walked in and screwed everything up. God love them, they just keep throwing money at the problem, which is okay when you give it to the states and let us do our jobs, but trying to claw that funding back and stand up a new grant round is the worst idea I’ve heard in a very long time, and that’s saying a lot coming out of D.C.”
The overhaul could be announced as soon as this week, possibly without some details in place, the people said. Following any changes, states might have to rewrite their plans for how to spend their funding from the program, which could delay the implementation.
Lutnick told Commerce staff he plans to do away with other BEAD program rules, including some related to climate impact and sustainability, as well as provisions that encouraged states to fund companies with a racially diverse workforce or union participation, the people said. The program requires internet-service providers that receive funding to offer affordable plans for lower-income customers. Lutnick saids he is considering reducing those obligations.
Commerce Secretary Howard Lutnick at the White House last month. Photo: Francis Chung/Pool/Cnp/ZUMA Press
Many broadband providers worried the Musk-led Department of Government Efficiency (DOGE) would eliminate or reduce the program’s funding. Is that not a conflict of interest considering that Musk owns Starlink/SpaceX?
Given the overhaul, fiber broadband providers may not benefit from it as much as they expected because non-fiber technologies are poised to receive more funding than before.
Fiber Broadband Association CEO Gary Bolton said in a statement that all “Americans deserve fiber for their critical broadband infrastructure. Fiber provides significantly better performance on every metric, such as broadband speeds, capacity, lowest latency and jitter, highest resiliency, sustainability and provides the maximum benefit for economic development and is required for AI, Quantum Networking, smart grid modernization, public safety, 5G and the future of mobile wireless communications. We urge our policymakers to do what’s right for people and to not penalize Americans for where they live or their current income levels.”
Telecommunications and broadband consultant John Greene wrote that states that have started the sub-grantee selection process, such as Louisiana, “might be forced to rethink their process in light of potential new rules.” Other “states, like Texas, might be better served to pause their process until after Commerce has completed their review and made any necessary changes,” he said.
References:
Nokia will manufacture broadband network electronics in U.S. for BEAD program
New FCC Chairman Carr Seen Clarifying Space Rules and Streamlining Approvals Process
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