SpaceX is trying to block Louisiana’s plan to use over $400 million for fiber installations instead of allocating more money for satellite-based services like Starlink.
“SpaceX applied to serve virtually all BEAD households for less than $100 million,” the company wrote in a Friday letter to the Louisiana Office of Broadband Development and Connectivity.
The federal Broadband Equity, Access, and Deployment (BEAD) program is distributing $42.5 billion to help US states expand high-speed internet in underserved areas. Louisiana decided to use Starlink for just 10,327 of the 127,000+ locations set to be covered by BEAD funding.
Starlink is slated to receive about $7.7 million, or about $750 per location. In its letter, SpaceX says it applied to “serve virtually all” Louisiana locations for less than $100 million. But the state opted for fiber connections “at an average per-location cost of $4,449.”
“As such, Louisiana’s proposal includes over $400 million…in wasteful and unnecessary taxpayer spending,” the company wrote in the letter, which PCMag received through a FOIA request.
The letter accuses Louisiana of violating the Commerce Department’s new rules for the BEAD program, which was overhauled in June to prioritize “technology neutrality” and paved the way for satellite internet to receive more of the BEAD funding. SpaceX also argues the rules call for states “to award grants based on the lowest cost to the program.”
“Louisiana did not engage in a single technical discussion with SpaceX,” the letter says. “SpaceX is aware, however, of a legion of fiber lobbyists and other hangers-on seeking to personally benefit from massive taxpayer spending. Louisiana has not shared any analysis with SpaceX that could even conceivably justify its determination with respect to SpaceX’s application.”
(Credit: Ernest Ankomah/Bloomberg via Getty Images)
The letter demands that Louisiana revise its BEAD proposal or that the Commerce Department’s National Telecommunications and Information Administration intervene.
Gigabit or Bust
SpaceX protested a similar proposal in Virginia, where Starlink is set to get $3.2 million of that state’s $613 million fund; nearly $500 million will go to fiber, which can deliver gigabit speeds. At two pages, the Louisiana document is shorter than the seven-page letter to Virginia. But both demand that Starlink play a larger role in each state’s BEAD programs.
Louisiana’s Office of Broadband Development and Connectivity didn’t immediately respond to a request for comment. But in a state document, Louisiana says its BEAD proposal was designed “to minimize costs, maximize results, and prioritize projects that can be easily scaled with the necessary capacity to support real-time emerging needs and long-term demands.”
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The state also used factors such as “spectrum, the impact of tree canopy on service availability, high customer density, and potential demand” in determining the ISP providers.
Although SpaceX has argued that Starlink can be deployed immediately for lower costs, other critics have slammed the company for trying to take BEAD subsidies away from faster gigabit fiber installations, which can cost less than Starlink’s $120 monthly fee.
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In response to SpaceX protesting Virginia’s BEAD plan, Gigi Sohn, the Biden administration’s former pick for FCC commissioner, wrote: “My concern is that this filing is more about saber rattling and frightening other states into granting the company more locations even if they can’t provide priority broadband service.”
Although Starlink excels at providing broadband in rural and remote areas, it generally offers slower speeds, closer to 100Mbps to 200Mbps in the US, where the satellite internet system is also facing network congestion. Nevertheless, the company is preparing to upgrade Starlink with more capacity and its own gigabit speeds, pending FCC approval and development of SpaceX’s Starship vehicle.
The Commerce Department hasn’t commented on SpaceX’s protests. However, Louisiana’s BEAD proposal will need to receive approval from the NTIA before the funding can be awarded.
Under the BEAD program, SpaceX is only obligated to provide a free Starlink dish to users in the underserved areas and reserve network capacity. The revised BEAD program has also revoked a state’s ability to set the pricing for internet plans meant for low-income users.
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About Michael Kan
Senior Reporter
I’ve been working as a journalist for over 15 years—I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017.
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