SpaceX Protests Virginia’s BEAD Plan, Claiming Favoritism Towards Expensive Fiber Over Starlink for High-Speed Internet
SpaceX has expressed dissatisfaction with Virginia’s $613 million plan to expand high-speed internet access, alleging the state intentionally excluded Starlink from receiving a larger share of subsidies.
In a seven-page letter released on Wednesday, the company accused Virginia of favoring expensive fiber installations over faster and more cost-effective alternatives like satellite broadband services such as Starlink. The dispute concerns $42.5 billion earmarked for high-speed internet in underserved areas through the Broadband Equity Access and Deployment (BEAD) program.
The recent changes to the BEAD program, implemented by the Trump administration in June, aimed to promote technology neutrality by shifting away from prioritizing fiber installations. This shift opened the door for satellite internet services and fixed wireless to receive more funding from each state’s BEAD program. However, Virginia’s proposed plan primarily relies on fiber, with Starlink receiving only $3.2 million or approximately $584 per site – a stark contrast compared to the significantly pricier fiber installations that can cost between $6,000 and $8,000 per site.
The letter from SpaceX suggests the company was prepared to offer high-speed broadband to virtually every BEAD-eligible household in Virginia for $60 million, immediately available to residents. In contrast, Virginia’s proposed plan would spend ten times that amount on connectivity that may not be deployed until four years later or potentially not at all.
SpaceX asserts that Virginia’s BEAD plan failed to adhere to technology neutrality and argues that Starlink could achieve the same results faster and at one-tenth of the cost. The company also accused Virginia of manipulating the competitive rules for its own benefit, potentially favoring specific companies at the expense of taxpayers.
Virginia’s BEAD program did not respond to a request for comment on the matter. However, according to state documents, Virginia took factors like “tree cover,” along with “speed, latency, and scalability” into account when contracting ISPs for each BEAD location. This approach might have led Virginia to prioritize more expensive fiber installations due to their ability to deliver gigabit internet speeds and function under heavy tree cover.
In comparison, Starlink can offer internet speeds ranging from 100Mbps to over 300Mbps. SpaceX has recently introduced an upgrade to help the satellite internet perform better even under tree coverage.
SpaceX’s letter encourages the Commerce Department’s National Telecommunications and Information Administration to reject Virginia’s final proposal unless revisions are made. The Commerce Department did not respond to a request for comment on this matter. However, the agency needs to approve Virginia’s BEAD proposal before funding can be awarded.
While the dispute could potentially delay Virginia’s BEAD program, SpaceX maintains that these efforts will not hinder connectivity for BEAD households but instead accelerate the program by prioritizing lower-cost awards to providers like SpaceX that are already deployed and ready to enroll customers immediately, rather than waiting years for terrestrial deployments to materialize.
SpaceX sent this letter after Louisiana’s government also awarded most of its BEAD funding to fiber providers over Starlink. The company did not respond to a request for comment regarding any potential challenges to Louisiana’s BEAD proposal.
Critics have denounced the Commerce Department for restructuring the BEAD program in a manner that could potentially divert funds from faster fiber installations. The Benton Institute for Broadband and Society has noted that, under the revised BEAD program, SpaceX is only required to provide a free Starlink dish for eligible locations and reserve internet capacity. Additionally, the revised program has revoked a state’s ability to set pricing for internet plans intended for low-income users.
