- SpaceX has beef with how Louisiana and Virginia classified “priority broadband projects” for BEAD
- Starlink thus far was awarded roughly $16M in BEAD funds
- NTIA will probably try to coax states into giving “a bit more” money to satellite, said New Street Research’s Blair Levin
States are showing fiber is still king in their plans for the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program – much to the dismay of Starlink.
Starlink’s parent company SpaceX, which expected the lion’s share of BEAD money once the Trump administration axed the program’s fiber preference, has filed complaints against Louisiana and Virginia for awarding most of their funds to wireline providers. The company urged the states to re-evaluate, or it will ask NTIA to reject their final proposals.
Both Louisiana and Virginia intend to dole out roughly 80% of BEAD money to fiber broadband providers, 9-10% to low earth orbit (LEO) satellite with the remaining funds going to cable and fixed wireless access (FWA).
SpaceX is poised to receive a total of over $10 million ($7.7 million from LA and $3.2 million in VA) from the two states to cover underserved locations with satellite. But it claims Louisiana and Virginia violated the new BEAD rules with how they’ve interpreted the definition of a “priority broadband project.”
“Virginia indicates in the Final Proposal that it determined that 95%+ of SpaceX’s initial application did not qualify [as] ‘Priority Broadband,’” SpaceX wrote. “To date, Virginia has not provided SpaceX with any information, rationale, or justification to support this determination, and has not published any studies or technical requirements used to evaluate SpaceX’s application.”
As for Louisiana, SpaceX said the state “did not engage in a single technical discussion” with the company and alleged the broadband office’s guidelines intentionally excluded fixed wireless and LEO providers from winning more funds.
Gigi Sohn, executive director of the American Association for Public Broadband (AAPB), finds SpaceX’s argument that it should have won more BEAD locations “absurd.” She noted Louisiana considered conditions like tree canopies, buildings and customer density when determining a technology’s eligibility.
“Starlink argues that because Louisiana determined that its service was a ‘Priority Broadband Project’ for 10,000 Broadband Serviceable Locations (BSLs), it is obvious that it should have been designated a priority project for the other 117,515 locations in the state,” said Sohn. “But that is absurd. Not every BSL is identical.”
A priority broadband project, as defined by NTIA, refers to technology that provides speeds of at least 100 Mbps download and 20 Mbps upload, maintains latency of less than 100 milliseconds, can scale over time to meet growing connectivity needs as well as support deployment of 5G and other “successor wireless technologies.”
The last two points could give states some wiggle room to determine which tech is best suited for deployments. Thus far, everything’s coming up fiber.
West Virginia, the latest state to release its final proposal, indicated 94% of BEAD-eligible locations are slated to get fiber, with Frontier and local operator Citynet each snagging over $200 million.
SpaceX meanwhile is getting $6.4 million to cover about 6% of the state’s locations, which could mean West Virginia is up next to receive a challenge on its bidding process.
The ball lies in NTIA’s court
None of the states are obligated to respond to SpaceX’s comments – it will all come down to how NTIA reviews the proposals, said New Street Research Policy Analyst Blair Levin.
If NTIA agrees with SpaceX that a “fair technical evaluation” is required, it’s possible many states will have to redo their bidding rounds, delaying BEAD rollouts even further.
But if that were the case, “we think [NTIA] would have already prevented VA and LA from going down the path they did in terms of granting funds to wireline providers,” Levin said in a note to investors.
A more likely outcome is NTIA will try to compromise by telling the states while they “don’t have to give satellites everything, they must give them a bit more,” he said. That would align with the agency’s goal of returning “a substantial portion” of BEAD funds to the U.S. Treasury.
The challenge with satellite for BEAD
Politics aside, it’s hard to deny satellite has its fair share of connectivity shortfalls compared to fiber and other wired technologies. Bandwidth capacity – or lack thereof – still remains the biggest bottleneck for widespread satellite coverage.
According to the Vernonburg Group, which looked at public Starlink information and the FCC’s latest broadband location data, Starlink could reliably provide 100/20 Mbps service for nearly seven BSLs per square mile. At best, LEO satellite can serve up to 1.19 million (roughly 26%) of BEAD-eligible locations.
Starlink is currently set to cover approximately 10,300 Louisiana locations, 5,600 in Virginia and 4,200 in West Virginia.
“These are optimistic scenarios given other factors impacting service quality, such as the presence of higher tier customers competing for available network capacity, and factors impacting signal strength, such as physical structures and tree foliage,” Vernonburg Group’s study concluded.