SpaceX Challenges Louisiana Over $400M Fiber Funding vs Starlink
SpaceX has expressed concerns over Louisiana’s plans to allocate over $400 million for fiber installations, arguing that the funds could be better utilized for satellite-based services like Starlink. In a letter addressed to the Louisiana Office of Broadband Development and Connectivity, SpaceX stated that they had applied to serve nearly all households in the state for less than $100 million.
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. However, Louisiana has only chosen to use Starlink for a small fraction of the locations set to be covered by BEAD funding.
Starlink is anticipated to receive around $7.7 million, which equates to approximately $750 per location. In contrast, the state opted for fiber connections at an average cost of over $4,400 per location. The letter asserts that this decision results in excessive and unnecessary spending of taxpayer funds.
SpaceX claims that Louisiana’s proposal violates new rules established by the Commerce Department for the BEAD program, which emphasize technology neutrality and prioritize satellite internet for a larger share of funding. SpaceX also argues that the rules mandate states to award grants based on the lowest cost to the program.
The letter alleges that Louisiana did not engage in any technical discussions with SpaceX regarding their application. It also mentions a group of fiber lobbyists and other individuals who may stand to personally benefit from substantial taxpayer spending, without Louisiana sharing any justification for its determination concerning SpaceX’s application.
The letter demands either revisions to Louisiana’s BEAD proposal or intervention by the Commerce Department’s National Telecommunications and Information Administration.
SpaceX previously contested a similar proposal in Virginia, where Starlink is set to receive $3.2 million from the state’s $613 million fund, with nearly half a billion dollars allocated for fiber, capable of delivering gigabit speeds. The Louisiana document, spanning two pages, is shorter than the seven-page letter sent to Virginia. Both letters emphasize the need for Starlink to play a larger role in each state’s BEAD programs.
Neither Louisiana’s Office of Broadband Development and Connectivity nor SpaceX immediately responded to requests for comment. However, a state document indicates that Louisiana designed its BEAD proposal to minimize costs, maximize results, and prioritize projects with the capacity to support emerging needs and long-term demands.
The state also considered factors such as spectrum availability, tree canopy impact on service accessibility, high customer density, and potential demand when selecting ISP providers. Critics have questioned SpaceX’s attempts to divert BEAD subsidies from faster gigabit fiber installations, which typically cost less than Starlink’s $120 monthly fee.
In response to SpaceX protesting Virginia’s BEAD plan, Gigi Sohn, the former nominee for FCC commissioner, expressed concerns about SpaceX’s tactics: “My concern is that this filing is more about saber rattling and intimidating other states into granting the company more locations even if they can’t provide priority broadband service.”
While Starlink demonstrates effectiveness in providing broadband in rural and remote areas, it generally offers speeds of around 100Mbps to 200Mbps in the US. The satellite internet system is currently experiencing network congestion. Despite these challenges, SpaceX plans to upgrade Starlink with increased capacity and its own gigabit speeds, pending FCC approval and development of SpaceX’s Starship vehicle.
The Commerce Department has yet to comment on SpaceX’s protests. However, Louisiana’s BEAD proposal will require approval from the NTIA before funding can be awarded. Under the BEAD program, SpaceX is only obligated to provide a free Starlink dish to users in underserved areas and reserve network capacity. The revised BEAD program has also removed a state’s ability to set pricing for internet plans intended for low-income users.
