Satellite Internet Everywhere: SpaceX Criticizes State Funding

At a glance

• Funding Discrepancy: SpaceX has criticized Louisiana for allocating $400 million to fiber while offering only $7.7 million for Starlink.
• Cost-Effective Solution: SpaceX claims it can connect nearly all underserved households for less than $100 million.
• Rural Internet Concerns: Advocates argue that satellite internet does not effectively bridge the gap between high-speed and low-speed areas.
• Policy Changes: The Trump administration’s new broadband policies shift funding priorities and restrict state governance over internet pricing.

SpaceX is again battling states over internet funding, as the company pushes a satellite-first agenda amid a growing need for direct internet connections.

In a filing submitted to the Louisiana Office of Broadband Development and Connectivity on August 15, the company accused the state of wasting taxpayer money and succumbing to pressure from so-called “fiber lobbyists” by dedicating $400 million to state fiber installations and only $7.7 million to Starlink deployment. SpaceX argues that it can connect “virtually all” in-need households for less than $100 million. Last week, SpaceX levied the same accusations against a Virginia funding proposal, which only gave $3.2 million to the telecom company.

Satellite internet companies like Elon Musk’s Starlink have pushed for more dedicated funding to Low Earth Orbit satellites (LEOs) and fixed wireless broadband, arguing that it is a more cost-effective option for mass internet deployment than dedicated fiber connections. The Trump administration has penned deals with Starlink, as well as an unsanctioned deployment of Starlink WiFi at the White House, and the company has pushed for greater federal support from agencies like the FCC.

But rural internet advocates don’t agree that satellite internet is a cure-all for disconnected Americans. While great options for areas encumbered by geographic hurdles and in emergency communications, satellite connections pose a scalability issue for universal coverage and do little to solve an increasing gap between high-speed and low-speed areas. Additionally, advocates have posed concerns about satellite network capacity and access to necessary spectrum bandwidth. LEOs are significantly less reliable than fiber, too, and they can’t offer the faster, gigabit speeds that fiber projects will enable.

Trump vs. broadband access

SpaceX’s stance reflects a shift in priorities for the new administration and FCC. Earlier this month, the Trump administration adjusted state internet grant requirements overseen by the National Telecommunications and Information Administration (NTIA). Spotted in a revised FAQ for grant proposals, states can now be shut out of federal broadband funding if they attempt to govern the base price of high-speed internet plans offered to low-income households. Such programs are mandated under the funding process for Broadband Equity, Access, and Deployment (BEAD) grants, which require ISPs to offer low-cost broadband service options for eligible subscribers if they get federal BEAD money to build out internet access – some states have stepped in to ensure those “lower” cost plans are actually affordable.

The NTIA has also restricted setting standards for what are known as “community anchor institutions,” a previously flexible designation that allows states to secure funds for institutions and organizations that provide community support – like libraries, hospitals, colleges, and other services that aren’t necessarily state-operated.

The Biden administration announced the $42 million BEAD program in 2023, following the history-making Tribal Connectivity Program (launched under the Affordability Connectivity Program) that sought to address a growing digital divide – it wasn’t just about access to the internet, but access to reliable, high-speed internet most often achieved through fiber connections. BEAD’s Middle Mile program dedicated funding to connecting rural, disconnected communities to high-speed broadband internet with new fiber infrastructure (a “Fiber First” stipulation). Broadband speed goals were then redefined by the FCC in 2024, considered a win among internet-for-all advocates.

But fiber deployment projects funded under BEAD have been torpedoed by the new administration under new “technology neutral” guidelines. Trump’s FCC chair, Brendan Carr, has scaled back previous broadband speed goals to make room for telecom and media allies in his fight to limit free speech protections.