The Trump administration is eliminating a preference for fiber Internet in a $42.45 billion broadband deployment program, a change that is expected to reduce spending on the most advanced wired networks while directing more money to Elon Musk’s Starlink and other non-fiber Internet service providers. One report suggests Starlink could obtain $10 billion to $20 billion under the new rules.
Secretary of Commerce Howard Lutnick criticized the Biden administration’s handling of the Broadband Equity, Access, and Deployment (BEAD) program in a statement yesterday. Lutnick said that “because of the prior Administration’s woke mandates, favoritism towards certain technologies, and burdensome regulations, the program has not connected a single person to the Internet and is in dire need of a readjustment.”
The BEAD program was authorized by Congress in November 2021, and the US was finalizing plans to distribute funding before Trump’s inauguration. The National Telecommunications and Information Administration (NTIA), part of the Commerce Department, developed rules for the program in the Biden era and approved initial funding plans submitted by every state and territory.
The program has been on hold since the change in administration, with Senator Ted Cruz (R-Texas) and other Republicans seeking rule changes. In addition to demanding an end to the fiber preference, Cruz wants to kill a requirement that ISPs receiving network-construction subsidies provide cheap broadband to people with low incomes. Cruz also criticized “unionized workforce and DEI labor requirements; climate change assessments; excessive per-location costs; and other central planning mandates.”
Lutnick’s statement yesterday confirmed that the Trump administration will end the fiber preference and replace it with a “tech-neutral” set of rules, and explore additional changes. He said:
Under my leadership, the Commerce Department has launched a rigorous review of the BEAD program. The Department is ripping out the Biden Administration’s pointless requirements. It is revamping the BEAD program to take a tech-neutral approach that is rigorously driven by outcomes, so states can provide Internet access for the lowest cost. Additionally, the Department is 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.
Lutnick said the department’s goal is to “deliver high-speed Internet access… efficiently and effectively at the lowest cost to taxpayers.”
Democrat: “Musk is a grifter”
Plans to direct money to Starlink were criticized yesterday by House Commerce Committee Ranking Member Frank Pallone, Jr. (D-N.J.). “Musk is a grifter, and Republicans are going to just stand by and watch,” Pallone said. Pallone also criticized Republicans for delaying BEAD after the Biden-era NTIA “rose to the occasion to build and implement the largest and most sophisticated broadband program in our nation’s history… with independent planning and decision-making taking place in every single state and territory.”
“Committee Republicans have done nothing but undermine our efforts to deploy more reliable and affordable broadband,” and “the Trump Administration has not moved one state forward in the process” since taking over six weeks ago, he said.
The Biden NTIA decided that fiber architecture is the only technology that achieves the BEAD law’s goal of building future-proof networks. “End-to-end fiber networks can be updated by replacing equipment attached to the ends of the fiber-optic facilities, allowing for quick and relatively inexpensive network scaling as compared to other technologies. Moreover, new fiber deployments will facilitate the deployment and growth of 5G and other advanced wireless services, which rely extensively on fiber for essential backhaul,” the Biden NTIA said.
House Republicans yesterday held a hearing titled, “Fixing Biden’s Broadband Blunder.” A hearing memo said that BEAD should support fixed wireless and satellite broadband “in areas that are more remote or have terrain that makes deploying fiber or cable more difficult.”
The Biden NTIA’s rules did not prohibit the use of fixed wireless and satellite technologies, but defined “priority broadband projects” as those that use end-to-end fiber-optic architecture. The rules said states could choose a non-fiber provider if the cost of running fiber to a particular location is above the state’s “extremely high cost per location threshold,” or “for other valid reasons subject to approval” by the NTIA.
Don’t be “technology-blind,” broadband group says
The Benton Institute for Broadband & Society criticized what it called “Trump’s BEAD meddling,” saying it would “leave millions of Americans with broadband that is slower, less reliable, and more expensive.” The shift to a “technology-neutral” approach should not be “technology-blind,” the advocacy group said.
“Fiber broadband is widely understood to be better than other Internet options—like Starlink’s satellites—because it delivers significantly faster speeds, is more reliable due to its resistance to interference (from weather, foliage, terrain, etc), has higher bandwidth capacity, and offers symmetrical upload and download speeds, making it ideal for activities like telehealth, online learning, streaming, and gaming that require consistent high performance,” the group said.
It’s ultimately up to individual states to distribute funds to ISPs after getting their allocations from the US government, though the states have to follow rules issued by federal officials. No one knows exactly how much each Internet provider will receive, but a Wall Street Journal report this week said the new rules could help Starlink get nearly half of the available funding.
“Under the BEAD program’s original rules, Starlink was expected to get up to $4.1 billion, said people familiar with the matter. With Lutnick’s overhaul, Starlink, a unit of Musk’s SpaceX, could receive $10 billion to $20 billion, they said,” according to the WSJ report.
The end of BEAD’s fiber preference would also help cable and fixed wireless providers access grant funding. Lobby groups for those industries have been calling for rule changes to help their members obtain grants.
While the Commerce Department is moving ahead with BEAD changes on its own, Republicans are also proposing a rewrite of the law. House Communications and Technology Subcommittee Chairman Richard Hudson (R-N.C.) yesterday announced legislation that his office said would eliminate “burdensome conditions imposed by the Biden-Harris Administration, including those related to labor, climate change, and rate regulation, that made deployment more expensive and participation less attractive.”
Musk to benefit while DOGE cuts funding
Given Musk’s role in the Trump administration, he’s been expected to get more government money for SpaceX’s Starlink division even while his “Department of Government Efficiency” works on canceling contracts in order to reduce other federal spending. Recent reports suggest that Starlink could take over a $2 billion contract that Verizon has with the Federal Aviation Administration, though SpaceX has said it is not trying to take over an existing contract.
In a Bloomberg opinion piece on Musk’s conflicts of interest, columnist Thomas Black said that a “conflict too blatant to ignore has surfaced” with the FAA, which regulates SpaceX.
“Musk is pushing SpaceX’s satellite broadband product, Starlink, as a quick solution to the FAA’s antiquated air-traffic-control systems and is muscling in on a $2.4 billion contract already awarded to Verizon Communications Inc. to upgrade FAA’s operations,” Black wrote. “The move undercuts the whole argument that Musk has no need nor interest in taking advantage of his position as Trump’s right-hand man to further his business interests, and even fans of DOGE should urge Musk to back off.”
There are additional paths for Starlink to get federal broadband funding. The Federal Communications Commission isn’t involved in BEAD but could direct money to Starlink through universal service programs.
Near the end of Trump’s first term, the Ajit Pai-led FCC tentatively awarded Starlink $885.51 million in broadband funding from the Rural Digital Opportunity Fund (RDOF). But the Biden-era FCC decided not to distribute the funding in a ruling that said Starlink has “recognized capacity constraints” and may not be able to consistently provide low-latency service with the required download speeds of 100Mbps and upload speeds of 20Mbps.
The newly appointed FCC chairman, Brendan Carr, said in 2023 that Starlink’s canceled grant “fits the Biden Administration’s pattern of regulatory harassment.” Carr said the FCC was part of a “growing list of administrative agencies that are taking action against Elon Musk’s businesses,” and that the Biden administration was “choosing to prioritize its political and ideological goals at the expense of connecting Americans.” Now that he is chairman, Carr could ensure that Starlink obtains future grant awards.