Virginia Awards Most Broadband Funding to Fiber Internet, Leaving SpaceX’s Starlink and Amazon’s Project Kuiper with Limited Share
The Trump administration’s revised $42.5 billion federal fund for high-speed internet has opened an opportunity for satellite providers like SpaceX’s Starlink, and Amazon’s Project Kuiper, to potentially secure a larger share. This shift in policy is now being tested in Virginia, where both contenders are bidding for funding from the US’s Broadband Equity, Access, and Deployment (BEAD) program.
In a recent announcement, Virginia allocated $613 million from the BEAD program, with approximately 80% going towards fiber internet infrastructure, rather than satellite-based providers. The state plans to invest only $7.7 million in providing satellite connections to over 12,000 underserved locations out of a total of 133,000, with SpaceX’s Starlink receiving just under $3.3 million to serve approximately 5,579 locations, and Amazon’s Project Kuiper receiving $4.4 million for about 7,000 locations.
Despite the Commerce Department adopting “technology neutrality” in the revised BEAD program and aiming to place satellite technology on par with fiber installations, the majority of Virginia’s funding favors traditional fiber infrastructure. For instance, fiber provider All Points Broadband was awarded over $171 million to bring high-speed internet to 19,801 locations, translating to about $8,655 per site.
Drew Garner, a director at the Benton Institute for Broadband and Society, has expressed concern that the BEAD changes could disadvantage consumers. While fiber internet offers gigabit speeds, it is more expensive to install compared to satellite internet providers like Starlink. However, Starlink delivers slower broadband and faces capacity constraints if an area experiences high demand. In certain regions like the Pacific Northwest, Starlink has even imposed a $1,000 demand surcharge on new users to prevent overloading the satellite network.
Virginia’s bidding process prioritized “speed, latency, and scalability” in broadband deployments, considering factors such as the “ease of scalability to meet projected demand for current and future users” and even taking into account “tree coverage,” since Starlink can face interruptions when its view of the sky is obstructed. This might explain why SpaceX recently highlighted the company’s beam-switching technology, designed to help Starlink bypass tree obstructions.
Eligible Virginia users stand to receive a free Starlink dish during the 10-year service period, thanks to the BEAD funding. However, the revised program stripped away a state’s ability to set pricing for internet plans meant for low-income users. An ISP only needs to “offer at least one” affordable internet plan to eligible users, but it can be an existing one.
The BEAD program requires SpaceX to “reserve sufficient capacity,” ensuring it can deliver 100Mbps in downloads and 20Mbps in uploads to eligible users. However, questions remain about the value of the BEAD funding for SpaceX, as it already offers a $120-per-month plan that some critics view as expensive, particularly for communities struggling with affordability.
SpaceX and Amazon did not respond to requests for comment regarding their plans for pricing their BEAD-related initiatives. In the meantime, the Commerce Department is yet to approve how other US states will use their BEAD funding, with states having until Sept. 4 to submit their final proposals, although extensions are possible.
In Texas, SpaceX has been seen bidding alongside other ISPs to serve over 244,000 locations through the state’s BEAD program, while Project Kuiper has bid on over 160,000.
