Starlink wants billions in grants, but state governments aren’t cooperating

SpaceX, the operator behind Starlink, is facing disappointment as its bid for broadband funding from state governments is falling short. Despite a recent overhaul of a $42 billion grant initiative by the Trump administration, states are still leaning towards deploying fiber broadband networks to reach underserved households rather than directing funds to Elon Musk’s satellite service. When the administration announced changes to the Broadband Equity, Access, and Deployment (BEAD) program in March, there were optimistic projections that SpaceX could secure between $10 billion and $20 billion. However, early indications show that states like Virginia and Louisiana are allocating the majority of their funding to fiber providers. In response, SpaceX has claimed that these states are violating the revised funding rules. If Virginia and Louisiana maintain their current plans, SpaceX is preparing to challenge their grant proposals. This situation could lead to similar objections being filed in other states as they unveil their own funding strategies. Recently, West Virginia outlined its broadband plan, which is likely to further frustrate SpaceX. An analysis from Broadband.io revealed that the state intends to devote 99 percent of its $624.7 million funding to fiber initiatives, leaving a mere $6.4 million for Starlink. This plan aims to provide fiber service to approximately 94 percent of the 73,701 locations eligible for grants, while Starlink would only be subsidized to serve the remaining 6 percent. Initially, West Virginia had proposed a more ambitious plan that would allocate $946 million in BEAD funding to expand fiber access to around 110,000 locations, but this was revised to comply with the administration’s cost-reduction mandates. Secretary of Commerce Howard Lutnick has urged states to adopt a technology-neutral stance when assessing internet providers, emphasizing the importance of offering the most affordable internet access. Despite fiber networks’ proven superiority in terms of speed and capacity, the recent program adjustments seem to create barriers for their funding justification.